October 30, 1995, E.C.B. Control No.: 38/94/99 (57 L.C.R. 280)

Between:Linear Construction Corp.
Claimant
And:Her Majesty The Queen in Right of the Province of
British Columbia as represented by the Minister of
Transportation and Highways and 459453 B.C. Ltd.
Respondents
Before:Fiona M. St. Clair, Vice-Chair
Sharon I. Walls, Board Member
Susan E. Ross, Board Member
Appearances:Ronald F. Hunte for the Claimant
Sarah I. Macdonald for the Respondent Ministry
C. Edward Hanman for the Respondent, 459453 B.C. Ltd.

 

1. APPLICATION

The claimant, Linear Construction Corp. ("Linear"), was actively engaged as a general contractor in the construction of an eight townhouse development, when the land on which the units were being built was expropriated by the respondent, Her Majesty the Queen in Right of the Province of British Columbia ("the province"). As a result, the construction was brought to a halt and never completed. The registered owner of the land was the other respondent, 459453 British Columbia Limited ("the numbered company").

In this application, Linear seeks a determination of its status as an "owner" under the Expropriation Act, S.B.C. 1987, c. 23 ("the Act"), in the context of this expropriation.

On June 17, 1994 the province filed an expropriation notice against the title to the land in the land title office in Victoria. On June 21 Linear submitted a claim of lien under the Builders Lien Act, R.S.B.C. 1979, c. 40, for registration at the same land title office. The land title office gave the claim of lien a pending number, but ultimately rejected it for registration because of the prior filing of the expropriation notice.

On July 6, 1994 the province filed an amended expropriation notice at the land title office, to correct its previous omission of a mortgagee registered on title. On July 28 it filed a vesting notice at the Land Title Office, whereupon the title to the land vested in the province.

Linear argued that the board should find it to be an "owner" as defined by the Act. "Owner" is defined in s. 1 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,

(b) a committee appointed under the Patients Property Act and a guardian, executor, administrator or trustee in whom land is vested, or

(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;

Linear put forward the following three bases upon which it maintained the board could make the determination of its status as owner.

1. The board should view Linear as being "a person who holds a subsisting judgment or builder's lien" as set out in subparagraph (a) of the definition of "owner". A lien under the Builders Lien Act is created as the work is done and takes effect from the time when the work is done rather than from when the claim of lien is filed. Although s. 7 of the Act prevented the registration of the claim of builder's lien at the land title office, that section is merely procedural, and should not be interpreted so as to exclude any substantive legal rights.

2. The registration of the first expropriation notice occurred before the application for registration of the claim of builder's lien. This therefore prevented the registration of the claim of builder's lien. However, the first expropriation notice was a nullity because it failed to list a mortgagee as an owner. It is the second, amended expropriation notice which is therefore the only effective one, and it was registered after the application for registration of the claim of builder's lien. The claim of builder's lien should therefore be regarded as a valid and subsisting one, entitling Linear to status as an owner under subparagraph (a) of the definition of "owner".

3. Under the terms of its contract with the numbered company, Linear was granted possession of the land during the period of construction. It therefore is an owner by virtue of being "a person who is in legal possession or occupation of land" as set out in subparagraph (c) of the definition of "owner".

 

2. STATUS OF AN UNREGISTERED CLAIM OF BUILDER'S LIEN UNDER SUBSECTION (A) OF THE DEFINITION OF OWNER

2.1. The Legislative Background

The process for filing and enforcing a claim of builder's lien is set out in the Builders Lien Act. The relevant sections of that act, for the purposes of this application, are s. 4, s. 11, and s. 22 (1) and (4). These sections provide as follows:

Section 4:

Subject to this Act, a worker, material man, contractor or subcontractor who does or causes to be done any work on, or supplies material, or does both work and supplies material, to or for an improvement, for an owner, contractor or subcontractor, has a lien for wages or for the price of the work or material, or both or any of them, or for so much of it as remains owing to him, on the interest of the owner in the improvement, on the improvement itself, on the material delivered to or placed on the land on which the improvement is situate, and on the land.

Section 11:

Subject to this Act, when a claim of lien has been filed in the land title office or gold commissioner's office where applicable, it takes effect from the date of commencement of the work or when the first materials are furnished or placed for which the lien is claimed, and it takes priority over all judgments, executions, attachments and receiving orders recovered, issued or made after the lien takes effect.

Subsection 22 (1):

A claim of lien of a contractor or subcontractor may be filed as provided in this Act at any time after the contract or subcontract has been made, but not later than 31 days after the contract of the contractor has been completed, abandoned or otherwise determined.

Subsection 22 (4):

Every lien for which a claim of lien is not filed as provided in this Act shall absolutely cease to exist on the expiration of the time limited for its filing.

David A. Coulson, in his Guide to Builders' Liens in British Columbia (1994, Carswell) discusses the legal framework for builders' liens:

The right to a lien is a direct right which is enforced against the owner's property where the construction occurred. It is a right in rem, that is, against the world at large attaching to the land and the improvement. To qualify for a lien, claimants must meet all the requirements of the Act, since there is no common law right to a lien for materials and services. All the rights to a lien arise from the statute, and accordingly the right to a lien must be found in the legislation …

The lien is created as the work is done and, by s. 11 of the Act, takes effect from the time when the work or materials are supplied, not when the lien is filed. However, the lien must be registered for the claimant to exert his claim of lien. If he fails to register, the claimant may still have rights pursuant to the s. 2 trust … (p. 1)

Under s. 25 of the Builders Lien Act, a lien claimant must commence a court action in the Supreme Court of British Columbia to enforce the lien within one year from the filing of the claim for lien in the land title office. The jurisdiction to test the validity of a claim of lien and to grant a declaration of lien is given under the statute to the Supreme Court. Unless the court action is commenced within the required time, s. 26 provides that the lien "absolutely ceases to exist".

At the trial of an action to enforce a claim of lien, the court may declare that the claimant is entitled to a lien for the amount found to be due and may direct the sale of the land if that amount is not paid. The court may also give personal judgment against a party as debtor for the sum actually due.

Coulson, in his chapter entitled "Enforcement of the Lien" states that:

[a]fter the claimant has enforced his lien by obtaining a judgment and declaration of lien, he becomes a lien holder. He or she can then take the necessary steps to execute upon his judgment against the land, including obtaining an order of sale, and pursuing any other remedies granted by the court and the court's rules. (p. 97)

In his chapter entitled "Judgment", Coulson explains the difference between the personal judgment that may be granted against specific persons and in specific amounts, and the declaration of entitlement to a claim of lien against specific lands, by making this statement about the latter:

In finding a claimant to be entitled to a lien the court does not order an amount to be paid; rather the judgment is declaratory because the action is against the land, in rem. (p. 119)

2.2. Linear's Position

Linear maintained that it qualifies as an "owner" under subsection (a) of the definition, as "a person who holds a subsisting judgment or builder's lien." Linear viewed itself as being the holder of a "substantive" builder's lien, even though its claim of lien had not been successfully registered. It argued that s. 7 of the Act is a procedural section only, which does not in any way affect or extinguish any substantive rights created by the Builders Lien Act.

Section 7 of the Act provides in part as follows:

Land title office filing and registration

7. (2) After the filing of an order or notice under subsection (1), the registrar shall not

(a) register another instrument affecting the land covered by the order or notice other than

(i) a court order affecting the land,

(ii) a judgment for the payment of money,

(iii) a notice filed under section 49 of the Family Relations Act,

(iv) an entry under section 2 (1) of the Land (Spouse Protection) Act,

(v) a caveat or a lis pendens,

(vi) a builder's lien or other instrument the application for registration of which was made before the order or notice was filed,

(vii) an easement, restrictive covenant or statutory right of way that does not affect any part of the land being expropriated, or

(viii) any other instrument that may be prescribed …

It was because of the operation of s. 7 (2) (a) that the claim of builder's lien filed by Linear was not accepted for registration by the land title office.

Linear argued that s. 7 contains no language that purports to extinguish rights under the Builders Lien Act by the prior filing of a s. 6 expropriation notice. It submitted that specific legislation would be required to enable an expropriating authority to override what it characterized as the substantive protection of the Builders Lien Act. Linear should therefore be considered to have had an existing claim of lien at all material times and thereby qualify as an "owner" under the Act. Finally, it submitted that any conflict between the provisions of the two statutes should be resolved in favour of Linear as claimant, because it is not disputed that Linear is prima facie entitled to compensation "in some form from some party". The numbered company supported Linear in these submissions.

2.3. The Province's Position

The province argued that the board should distinguish between a claim of builder's lien and a builder's lien, as the two concepts are discrete in the Builders Lien Act. The successful prosecution of a Supreme Court action to enforce a claim of lien is the way in which a lien claimant becomes a lien holder. The province pointed out that the precise term used in the Act is "builder's lien", and that in the definition of "owner", the Act refers to a "holder" of a "builder's lien". The province went on to maintain that even the holder of a validly filed claim of builder's lien does not have an interest in land as referred to in subparagraph (a) of the definition of "owner". It argued that only the holder of a valid builder's lien, as declared by the Court at the conclusion of a builder's lien action, holds an interest in land. The claim of lien, it maintained, is in the nature of a notice, and does not grant any substantive rights. The determination of substantive rights is in the exclusive domain of the Supreme Court, and this board is not the appropriate forum for determining the validity of a claim of builder's lien.

2.4. Discussion

The question we must address, then, is what does it mean to be "a person who holds a subsisting judgment or builder's lien" as set out in subsection (a) of the ownership definition in s. 1 of the Act?

There are only three references in the Act to builders' liens. They occur in subsection (a) of the s. 1 definition of "owner" just quoted, in the definition of "security interest" in s. 1, and in subsection 7 (2) (a) dealing with land title office filing and registration. The latter reference comes in subsection (2) (a) (vi), which stipulates that "a builder's lien or other instrument the application for registration of which was made before the order [under s. 5] or [expropriation] notice was filed" may be registered after the filing of such an order or notice.

The principle of uniformity of expression holds that each term in a statute should have one and only one meaning, wherever it appears in the statute, and that an idea should be expressed in the same words throughout the enactment. Applied to this situation, this principle of statutory drafting and interpretation suggests that the expression "builder's lien" is intended to bear the same meaning in s. 1 and in s. 7 (2) (a). Subsection 7 (2) (a) (vi) uses the term "builder's lien" in the context of an instrument for which application for registration at a land title office has been made. The only documents registerable at the land title office, and that might be characterized as a "builder's lien" and therefore referred to by this reference, are a claim of builder's lien and a lien declared by the Supreme Court. Applying a consistent meaning to "builder's lien" throughout the Act would require the references in s. 1 also to be limited to a claim of builder's lien and a court declaration of builder's lien. This would, then, exclude the conceptual or substantive lien theorized by the claimant -- that is, the lien that arises upon the commencement of the work and that ceases to exist if certain time restrictions in the Builders Lien Act are not complied with.

Another relevant principle of statutory interpretation is internal coherence. This tells us to consider words within a statute in light of the rest of that statute, "so that there may be no repugnancy or inconsistency between its portions or members" (R. v. Assessor of the Town of Sunny Brae, [1952] 2 S.C.R. 76, 97). Applied to this statute, the principle of internal coherence suggests that the words "builder's lien" in s. 1 should be interpreted consistently with the other provisions of the Act.

The only other use of the term "builder's lien" in the Act other than in the s. 1 definitions appears in s. 7. Among the instruments that this section lists as being permitted registration after the registration of an expropriation notice is "a court order affecting the land" in subsection (2) (a) (i). If we were to interpret the words "builder's lien" in subsection (2) (a) (vi) as confined to meaning a builder's lien declared by the Supreme Court, we would render them meaningless and unnecessary, because a declaration of builder's lien is already included as "a court order affecting the land" under (2) (a) (vi).

In addition, the province's view of "builder's lien" in subsection (2) (a) (vi) as referring only to a lien declared by the Supreme Court, would create a much more onerous threshold for s. 7 registration of claims based on the builder's lien scheme, than for the registration of other types of interests. This is because a number of the instruments permitted registration under s. 7 are in the nature of mere notices of claims. Under the province's interpretation, the only workers, suppliers, and contractors who could put forward an expropriation claim would be those who had already filed a claim of lien and concluded a Supreme Court trial successfully by the time the expropriation notice was filed. By contrast, subsection 7 (2) (v), for example, would permit an individual with a personal claim against the owner of land in a matter unconnected with the land itself, and who had not yet proceeded to a trial, to file a lis pendens after the registration of an expropriation notice. A lis pendens is not a judgment; it is rather merely a notice that litigation has been commenced. Reading s. 7 (2) (a) as a whole does not, therefore, support the province's proposed reading of the term "builder's lien".

We agree with the province that this board is not the proper forum for determining the validity of a claim of builder's lien, since the Builders Lien Act grants jurisdiction in this to the Supreme Court. We do not, however, see this as a bar to a registered lien claimant having status as an owner under the Act. The determination of whether a person is an owner and the determination of whether they are entitled to any compensation under the Act are distinct and thus separable for the purposes of a hearing. If a lien claimant's only status as an owner under the Act arises through their registered claim of lien, then until they prove their claim before the Supreme Court, their compensation claim would be unquantifiable by the board. If they fail to prove their lien claim before the Supreme Court, then there would be no need for a compensation hearing before the board, as their lien claim would be worthless. A lien claimant's compensation hearing before the board might, therefore, have to be delayed until the successful completion of their civil lien trial. This is no reason to deny a lien claimant status under the Act.

A third relevant principle of statutory interpretation is the principle of coherence between statutes. As much as possible, enactments of the same legislature should be interpreted as part of a coherent system, so as not to result in inconsistencies between the workings of any enactments.

Let us turn to a review of the facts in this case as they relate to the registration provisions contained in the expropriation statute and in the Builders Lien Act. At the time the province filed the first expropriation notice, Linear was in a position to register a claim of builder's lien, since its lien, according to s. 4 of the Builders Lien Act, arose from the time its work on the site commenced. It did not, however, submit its claim of builder's lien for registration until 4 days after the first expropriation notice was registered. The land title office properly, in compliance with s. 7 of the Act, refused to complete the registration of the claim of builder's lien because of the prior registration of the expropriation notice.

Linear placed great emphasis on s. 11 of the Builders Lien Act in support of its submission that we should view its "substantive" lien (that is, the lien that arose from the time the work was undertaken by operation of the Builders Lien Act) as qualifying it under subsection (a) of the definition of "owner" in s. 1 of the Act. Section 11, however, merely grants a claim of lien that has been filed in the land title office priority over "all judgments, executions, attachments and receiving orders" from the date the work was undertaken, even if those instruments were registered before the claim of builder's lien. Section 11 does not accord any legal rights to a party who has the right to file a claim of lien but does not do so. To quote Coulson again, the lien

takes effect from the time when the work or materials are supplied, not when the lien is filed. However, the lien must be registered for the claimant to exert his claim of lien. (p. 1)

We take "filed" in s. 11 to mean not merely submitted for registration but also registered. In this case, although the claim of lien was submitted for filing, its registration was never completed because of the prior registration of the expropriation notice.

It is significant, too, that s. 11 does not purport to grant priority to a claim of lien over a registered expropriation notice. The instruments over which it grants a claim of lien priority are listed specifically, and do not include an expropriation notice. This is consistent with the fact that the listed instruments are all in the nature of charges on the land that do not affect the fee simple ownership.

It does not follow, then, that because a lien arises from the commencement of the work to which it relates, it continues in existence despite the operation of the registration requirements in the Builders Lien Act. Subsection 22 (4) of the Builders Lien Act expressly provides that "[e]very lien for which a claim of lien is not filed as provided in this Act shall absolutely cease to exist on the expiration of the time limited for its filing." Linear attempted to meet this problem by arguing that it was not the provisions of the Builders Lien Act that prevented the registration of the claim of lien in this case, but rather the operation of s. 7 of the Expropriation Act. Section 7, it submitted, is merely procedural and does not purport to extinguish what Linear referred to as "substantive rights created pursuant to the Builders Lien Act." According to Linear, there is no language, express or implied, that purports to say that a person's rights under the Builders Lien Act are extinguished by the prior filing of a s. 6 expropriation notice. Finally, it submitted that specific legislation would be necessary to enable the expropriating authority to override the "substantive protections of the Builders Lien Act."

We disagree with Linear's position on this point. Section 7 makes specific reference to builders' liens. It provides an exception, in subsection (2) (a) (vi), to the general rule disallowing subsequent registration of documents, for "a builder's lien or other instrument the application for registration of which was made before the order or notice was filed." The drafters of the Act obviously did turn their minds to the effect of the registration of an expropriation notice on builders' liens, and determined that only those persons whose applications for registration of a "builder's lien" were submitted prior to the date the expropriation notice was filed, should continue to be able to exercise their rights under the Builders Lien Act against the land being expropriated. We have already highlighted the reference in subsection (2) (a) (i) to a "court order affecting land." Since a court declaration of a builder's lien is also a "court order affecting land", it follows that the limiting words in subsection (2) (a) (vi) are intended to refer to a different instrument; that is, to a claim of builder's lien.

Based on all of the above considerations, we conclude that the term "builder's lien" in subsection (a) of the definition of "owner" in s. 1 of the Act refers to a claim of builder's lien, and that the term "subsisting" in that subsection means registered. This is consistent both with our interpretation of s. 7 of the Expropriation Act and s. 11 of the Builders Lien Act, and with the decision of the board in Re Coates and Rainbow Country Estates Ltd., (1991), 46 L.C.R. 249 dealing with "subsisting judgments".

In this case, the claim of builder's lien was not submitted until after the registration of the first expropriation notice, and therefore was properly rejected for registration by the land title office. The result is that although Linear had a lien by virtue of having commenced work on the building project, once the expropriation notice was registered Linear was only the holder of an unregistered claim of builder's lien. Under s. 22 (4) of the Builder's Lien Act, its lien is deemed to cease to exist on the expiry of the time limited in that Act for filing a claim of lien.

It is apparent that s. 7 of the Act can operate to exclude persons like Linear from exercising their in rem rights in the context of either an expropriation compensation claim or a builder's lien action. Fee simple owners and other potential statutory "owners", however, often have some advance notice that an expropriation is in the works. This would provide a party in Linear's position with sufficient time to ensure that their claim of lien is filed at the land title office before the filing of an expropriation notice. In this case, Linear did not have enough advance notice of the impending expropriation to permit it to file its claim of lien in time to qualify for the s. 7 (2) (a) (vi) exception. Under such circumstances, s. 7 may work a hardship against a person in Linear's position. However, it would require a legislative change to s. 7 (2) (a) (vi) to alter this situation. We are required to apply the section as it is presently worded, and in our view the effect of its wording is clear.

2.5 Conclusion

Since Linear is not the holder of a registered claim of builder's lien, we conclude that it cannot be an "owner" under subsection (a) of the definition in s. 1 of the Act based only on the fact that it was in a position to file a claim of lien prior to the registration of the expropriation notice.

 

3. CONSEQUENCES OF INVALID FIRST EXPROPRIATION NOTICE TO CLAIMANT'S STATUS UNDER SUBSECTION (A) OF THE DEFINITION OF OWNER

Linear says that the first expropriation notice was a nullity due to the province's failure to list a mortgagee of the property. If we regard the second, amended expropriation notice as being the only effective registered notice, then Linear says that its application for registration of its claim of builder's lien predates the registration of the expropriation notice as required by s. 7 (2) (a) (vi). This means, in Linear's view, that it should be treated as being the holder of a registered claim of lien and therefore an owner under subsection (a) of the definition of "owner" in the Act.

Linear's ability either to enforce its lien under the Builders Lien Act or to claim status as the holder of a subsisting builder's lien under the Act depends upon its having a registered claim of lien. It does not now have, nor has it ever had, a registered claim of lien over this property.

Even if we were to make a determination as to the validity of the first expropriation notice, our decision on that point could not provide Linear with the ability to register a claim of lien now, nor could it confer registered status on its original application for registration. If Linear believed, at the time its registration was denied by the land title office, that the expropriation notice was invalid, then it could at that time have made application to the Supreme Court for an order requiring the local registrar of land titles to effect the registration of the claim of lien on the basis of the alleged invalidity of the expropriation notice. This, in our view, is the only way that the purported invalidity of the initially registered expropriation notice might have any effect on Linear's ownership status under the Act.

Linear submitted that it "should be considered to have been on title in priority to the Expropriation Notice". In our view, registration is a question of fact, and there is no status we could confer on the claimant's lien along the lines of "equivalent to registered". We therefore conclude that it is unecessary at this juncture for us to consider the validity or invalidity of the first expropriation notice, since any decision we might make on that issue could not result in Linear acquiring ownership status under subsection (a) of the definition of "owner" in the Act.

 

4. STATUS UNDER SUBSECTION (C) OF THE DEFINITION OF OWNER

4.1. Linear's Position

Linear argued that it is an "owner" under subsection (c) of the definition, because it was "a person who is in legal possession or occupation of land." Linear took the position that it was the sole occupier of the lands under the terms of the written construction contract between it and the numbered company. It maintained that the contract granted it legal possession of the lands during the period governed by the contract, which of course was ongoing at the time the expropriation notice was filed.

Linear relied in particular on clauses 5.5, 20, and 25 of the contract in support of this position. The relevant portions of these clauses read as follows:

Clause 5.5:

If the Owner terminates the Contractor's right to continue with the Work under the conditions set out in the General Condition, he shall:

a) be entitled to take possession of the premises and products and utilize the construction machinery and equipment the whole subject to the rights of third parties, and finish the work by whatever method he may consider expedient but without undue delay or expense …

Clause 20:

… the Contractor shall provide, maintain and pay for the insurance coverage listed in this General Condition unless otherwise stipulated:

a) General Liability Insurance:

General liability insurance shall be in the joint names of the Contractor, the Owner, and the Consultant with limits of not less than one million dollars inclusive per occurrence for bodily injury, death, and damage to property including loss of use thereof, with a property damage deductible of five hundred dollars …

Clause 25:

25.1

The Contractor shall have complete control of the Work and shall effectively direct an [sic] supervise the work so as to ensure conformance with the Contract Documents. He shall be solely responsible for construction means, methods, techniques, sequences and procedures and for co-ordinating the various parts of the Work under the Contract.

Finally, Linear maintained that "occupation" is a question of fact, and that it is found only where there is a sufficient measure of control to prevent strangers from interfering with the land, and where something is actually done on the land. Linear cited Newcastle City Council v. Royal Newcastle City Hospital, [1959] 1 All E.R. 734 in support of this position. It maintained that since it fits both of these requirements, it was in "legal … occupation of land" under subsection (c).

4.2. The Numbered Company's Position

The numbered company supported Linear's position regarding legal possession or occupation. Noting that the Act contains no definition of "occupier" or "occupation", it referred the panel to the following definition of "occupier" in the Occupiers' Liability Act, R.S.B.C. c. 303:

"occupier" means a person who

(a) is in physical possession of premises; or

(b) has responsibility for, and control over, the condition of premises, the activities conducted on those premises and the persons allowed to enter those premises.

The numbered company maintained that the law regarding occupiers in construction sites is clear. The owner of the property, the engineering consulting firm, the general contractor, and the construction supervisor all exercise control of the premises and can all be held liable as occupiers for the purposes of the Occupiers' Liability Act. An occupier is not required to have exclusive possession or control of the premises, and persons sharing possession and control may all be occupiers under that Act.

The numbered company also pointed to the terms of its construction contract with Linear, to support Linear's contention that it was in possession and occupation. The numbered company highlighted the clause that makes denial of site access to the contractor by the owner a repudiation of the contract, and the clause that indicates the owner will retake possession of the works and the site upon its termination of the contract.

Finally, the numbered company referred to the decision of the Supreme Court of British Columbia, in W.A. Stevenson Construction (Western) Limited v. Metro Canada Limited (1987), 27 C.L.R. 113. In that case, the construction company's contract with the owner did not contain a specific clause dealing with possession of the property on which the work was to be completed. Locke J. held that even with no contractual provision granting occupation or possession,

… the owner has an obligation, in the absence of clear qualifications in the contract, to deliver to the contractor on the day the contract is signed entire and exclusive possession of the work site as designated in the contract. (p. 133)

4.3. The Province's Position

The province argued that subsection (c) of the definition of "owner" refers to those persons who have a connection with land which is "in the nature of an interest in land but is not recognized as such". It maintained that Linear is not such a person, because subsection (c) of the definition of "owner" only refers to certain tenancy interests, such as tenancies under leases of more than 3 years' duration that are not registered in the land title office, and residential tenancies of more than 1 year's duration. Since Linear does not have a tenancy interest, the province said it does not fit within subsection (c) of the definition.

The province also argued that subsection (c) does not include interests in the nature of a licence. It maintained that "possession" and "occupation" mean more than mere licence or permission; they indicate the exercise of a right of control over land to the exclusion of others. The province relied on the British Columbia Court of Appeal's decision in Douglas Lake Cattle Co. Ltd. v. The Queen (1990), 44 L.C.R. 260. It argued that there is nothing in the contract between Linear and the numbered company that confers on Linear a right of legal possession or occupation.

The province referred the panel to clauses 3.4, 3.8, 3.12, 9, and 20.1 (c) (3) of the contract. The relevant portions of these clauses read as follows:

Clause 3.4:

The Consultant [defined earlier in this clause as the owner's representative during construction, and in the definitions section as an architect or an engineer of the owner's designation] will visit the site at intervals appropriate to the progress of construction to familiarize himself with the progress and progress [sic] and quality of the Work and to determine in general if the Work is proceeding in accordance with the contract [sic] Documents. However, the Consultant will not make exhaustive or continuous on-site inspections to check the quality or quantity of the Work.

Clause 3.8:

The Consultant will have authority to reject work which in his opinion does not conform to the requirements of the Contract Documents. Whenever he considers it necessary or advisable he will have authority to require special inspection or testing of work whether or not such work be then fabricated, installed or completed. However, neither the Consultant's authority to act nor any decision made b [sic] him either to exercise or not to exercise such authority shall give rise to any duty or responsibility of the consultant [sic] to the Contractor, his Subcontractors, or their agents, employees or other persons performing any of the Work.

Clause 3.12:

If the Owner and the Consultant agree the consultant [sic] will provide at the site one or more project representatives to assist the Consultant in carrying out his responsibilities. The duties, responsibilities and limitations of authority of such project representatives shall be as set forth in writing to the Contractor.

Clause 9:

9.1 The Owner reserves the right to let separate contracts in connection with the Project of which the work is a part, or do certain work by his own forces.

9.2 When separate contracts are awarded for different parts of the Project, or work is performed by the Owner's own forces, the Owner shall:

a) provide for the co-ordination of the work of his own forces and of each separate contract with the Work of this contract …

9.3 The Contractor shall co-ordinate the Work of this contract with the work of Other [sic] contractors and connect as specified or shown in the contract [sic] Documents …

Clause 20.1 (c) (3):

Should the Owner with[sic] to use or occupy pat[sic] or all of the work he shall give thirty (30) days written notice to the Contractor of the intended purpose and extend [sic] of such use or occupancy. Prior to such use or occupancy the contractor [sic] shall notify the Owner in writing of the additional premium cost, if any to maintain property and boiler insurance, which shall be at the Owner's expense …

The province cited these clauses as evidence that Linear did not have the right to exclude others from the property, because the owner, the owner's representative consultant, and even other contractors and subcontractors of the owner had the right under the contract to be present on the premises during construction.

4.4 Discussion

The Act does not define "possession" or "occupation", and to date there has been only one reported decision of the board in which the meaning of these terms has been considered. That decision, Read Marketing Inc. v. The Queen, was published on April 5, 1995, and is not yet reported. Since this application was heard prior to its publication, it was not referred to in the arguments of counsel.

In Read Marketing, the claimant operated a gas station and convenience store before the acquisition of the premises. The board decided that the claimant's contractual relationship with Esso, the lessee of the property, amounted to a licence and not a lease. It went on to hold that the claimant, as a licensee, did not have "an estate, interest, right or title in or to the land" and was not an "owner" for the purposes of subsection (a) of the definition in the Act.

Having reached this conclusion, the board then turned to the issue of whether the claimant was in legal possession or occupation and therefore an "owner" pursuant to subsection (c) of the definition. After reviewing the 1971 Report on Expropriation of the Law Reform Commission and its references to lessees and to s. 37 (2) of the Act, the board concluded that subsection (c) was "not intended to apply to a person in the claimant's position."

It is apparent from the decision that the board's finding on subsection (c) is consistent with the precise nature of the claimant's position as determined in the careful analysis of the terms of the contractual arrangements with Esso in the portion of the decision dealing with subsection (a) of the ownership definition. Those contractual arrangements did not provide Read Marketing Inc. with sufficient indicia of legal occupation and possession to enable the board to make a finding in its favour on that point. For example, Esso retained "the right at all reasonable times to enter the premises and fully appraise or inspect …"(p. 16) The board found that "the control exercisable by Esso over the claimant's operations at Monte Creek Esso under the agency agreement [wa]s pervasive." (p. 15)

We have also found it useful to consider the decision of our Court of Appeal in Douglas Lake Cattle Co. Ltd., supra, cited to us by the province. The issue in that case did not concern an expropriation; rather, it was whether the activities of the crown amounted to a trespass, and what type of possession is required to support an action in trespass. The plaintiff in that case held a licence, the terms of which included provisions granting the owner the right to use parts of the licence area itself, and to grant concurrent grazing rights to others. The Court of Appeal considered that the licence would not permit the plaintiff to prevent strangers from using the grazing lands for non-grazing purposes. These limitations led the Court of Appeal to conclude that the plaintiff's right under its licence was to have its livestock graze for a specified number of unit months upon the lands of the licence, but that it was not a right of occupation or possession.

In our view, the existence of possession or occupation of land is a question of fact to be determined here by reference to the construction contract between Linear and the numbered company. We have reviewed the authorities cited to us by Linear, and agree that some of the indicia of legal occupation include the degree of control over the property in such matters as ejecting trespassers, and the actual use of the land for a specific purpose. Linear would have satisfied both of these requirements while carrying out its work as general contractor on the property.

By contrast with the facts in both Read Marketing and Douglas Lake, the contract between Linear and the numbered company is not as restrictive of Linear's rights on the property. Clause 5.5 provides that if the owner terminates the contract, then it shall "be entitled to take possession of the premises". A logical reading of this clause is supportive of the position that it was the contractor who had possession prior to any termination. The contractor's obligation to insure the premises for various purposes, as set out in clause 20, also supports Linear's position that it was in "legal possession or occupation" of the land at the time of the expropriation.

We consider that the clauses cited by the province as being indicative of Linear's lack of possession or occupation actually indicate the opposite. Clause 3.4, which deals with the rights of the consultant, provides that the consultant may "visit" the site, but that he or she "will not make exhaustive or continuous on-site inspections". The consultant is only permitted to have project representatives assist him or her at the site "if the Owner and the Consultant agree", pursuant to clause 3.12. And while clause 9.1 does allow the owner "the right to let separate contracts in connection with the Project of which the work is a part", clause 9.3 goes on to provide that if that occurs, "[t]he Contractor shall co-ordinate the work of this contract with the work of Other contractors." Finally, clause 20.1 (c) (3) provides that if the owner wishes to "use or occupy" part or all of the work, then it is required to give thirty days' written notice of its intention in that regard to the contractor. Like clause 5.5 that deals with the retaking of possession, this clause clearly implies that the contractor is in occupation of the premises in the first place, in order for the owner to be able to re-occupy under this clause.

We do not agree with the province's contention that exclusive possession or occupation must be demonstrated to qualify under subsection (c). The word "exclusive" does not appear as a modifier in the subsection itself, and we find nothing in the Act or in the law regarding statutory interpretation that would require us to deviate from a plain reading of the words of the subsection so as to insert in every case a requirement of exclusiveness as a prerequisite to a finding of legal possession or occupation.

We also do not agree that the only type of interest that could ever be caught by subsection (c) would be a leasehold interest. Again, the plain wording of the statute does not require such an interpretation, and we do not believe Read Marketing stands for that proposition either.

4.5 Conclusion

The board therefore finds that Linear is not an owner under subsection (a) of the definition of "owner" because it does not hold a "subsisting judgment or builder's lien," but Linear is an "owner" under subsection (c) of that definition because it was "in legal possession or occupation of [the] land" at the time of the expropriation.

 

Government of British Columbia