December 28, 2000, E.C.B. Control No.
71/00/194 (71 LCR 241)
I. Walls, Vice Chair|
Heringa, P.Eng., For The Claimant|
Guy E. McDannold, Counsel For The Respondent
REASONS FOR DECISION
This is an application by the respondent, the City of Nanaimo, for an order that
the Application for Determination of Compensation filed by the claimant, Rascal
Trucking Ltd. ("Rascal"), be dismissed on the grounds that the Expropriation
Compensation Board does not have jurisdiction. I heard this application in my
capacity as vice-chair of the board and in exercising the powers and jurisdiction
of the board under section 26(5) of the Expropriation Act, R.S.B.C. 1996,
c. 125 ("the Act").
 The facts giving rise
to this application may be briefly summarized. Rascal occupied land owned by Kismet
Enterprises Inc. located at 6231 Hammond Bay Road in Nanaimo. The claim involves
15,000 cubic metres (approximately 529,720 cubic feet) of topsoil that Rascal
trucked onto the property in June 1996. Nanaimo ultimately passed two resolutions
ordering Kismet and Rascal to remove the topsoil under section 936 of the Municipal
Act R.S.B.C. 1979, c. 290 on the grounds that the topsoil was a nuisance.
When the topsoil was not removed Nanaimo attended at the Hammond Bay Road property
to remove the topsoil but was prevented by Kismet and Rascal from doing so. On
application by Nanaimo, Maczko J. of the British Columbia Supreme Court declared
that Nanaimo had the jurisdiction to declare the topsoil a nuisance and order
its removal. Subsequently, a second application was brought and Rowan J. granted
a declaration that Rascal and Kismet were in breach of Nanaimo's order to remove
the topsoil and that Nanaimo was authorized to remove the topsoil if Rascal and
Kismet refused to do so. Rowan J. also dismissed a petition brought by Rascal
and Kismet seeking that Nanaimo's resolutions to remove the topsoil as a nuisance
be quashed on the basis that Nanaimo lacked the requisite jurisdiction. After
providing various options to Kismet and Rascal in terms of removing the topsoil
or directing Nanaimo as to where they wanted the topsoil delivered, acting on
this Order, Nanaimo removed the topsoil on November 6, 1996 and placed it in Beban
Park. Nanaimo has made some efforts to sell the topsoil but has so far been unsuccessful.
Rascal appealed the Orders of Maczko J. and Rowan J. and on May 20, 1998, the
British Columbia Court of Appeal allowed the appeal and quashed Nanaimo's resolutions.
See Nanaimo (City) v. Rascal Trucking Ltd. (1998), 49 B.C.L.R. (3d) 164.
Nanaimo appealed the Court of Appeal's Order and on March 2, 2000, the Supreme
Court of Canada allowed the City's appeal and reinstated the orders of Maczko
J. and Rowan J as well as Nanaimo's resolutions. See  1 S.C.R. 342.
On October 4, 2000, Rascal filed a Form A, or Application for Determination of
Compensation. In the Form A Rascal seeks compensation for the market value of
the topsoil that was removed from the property on Hammond Bay Road under sections
31, 40, and 41 of the Act as well as under sections 544 and 557 of the Municipal
Act, R.S.B.C. 1996, c. 323. Rascal is also claiming various disturbance damages,
frustration of an option to purchase the land, interest and costs.
Nanaimo filed a Form B Reply and brought this application. The bases for the application
that the board lacks jurisdiction are twofold:
actions in removing the topsoil were the exercise of a statutory remedy which
has been approved by the Courts and which does not include any right to compensation.|
topsoil is personal property and not land or real property.|
This board only has jurisdiction if there has been an expropriation of Rascal's
interest or, in the alternative, if there has been injurious affection of Rascal's
interest with no land taken under section 41 of the Act. In the case of McEachern
v. British Columbia Hydro and Power Authority (1997), 60 L.C.R. 186 (B.C.E.C.B.)
this board decided that it had jurisdiction to determine whether there has been
an expropriation or other circumstances that gave it jurisdiction.
there been an expropriation
or government regulation?
 The definition
of "expropriate" in section 1 of the Act is:
means the taking of land by an expropriating authority under an enactment without
the consent of the owner, but does not include the exercise by the government
of any interest, right, privilege or title referred to in section 50 of the Land
 Although not cited by either
party, E.C.E. Todd's comments in The Law of Expropriation and Compensation
in Canada, 2nd ed. (Carswell Co. Ltd., Toronto, 1992) are of assistance in
distinguishing the concept of the taking of property which is an expropriation
from other legal concepts of taking such as government regulation. At p. 24 he
In some situations it may not be easy
to determine whether the exercise of a power affecting property rights constitutes
expropriation and/or injurious affection for which legislation usually provides
compensation or whether the exercise constitutes regulation and/or damage for
which there is usually no compensation entitlement.
Todd provides an example of a situation where the court found that what had occurred
was not an expropriation: the English decision of France Fenwick and Co. v.
R.,  1 K.B. 458. The court held at p. 467 that even if the Crown had
no right at common law to expropriate without compensation:
rule can only apply (if it does apply) to a case where property is actually taken
possession of or used by the Government, or where, by the order of a competent
authority, it is placed at the disposal of the Government. A mere negative prohibition,
though it involves interference with an owner's enjoyment of property, does not,
I think, merely because it is obeyed, carry with it at common law any right to
compensation. A subject cannot at common law claim compensation merely because
he obeys a lawful order of the State. (emphasis added)
By contrast, Todd cites two decisions of the Supreme Court of Canada that did
decide that a particular form of government regulation was an expropriation that
required compensation, although the takings, on their face, did not appear to
be an expropriation. In The Queen in Right of British Columbia v. Tener
(1985), 32 L.C.R. 340 the claimant owned mineral claims that were situated in
a park. The Province ultimately passed legislation prohibiting any extraction
of minerals in a park. The majority of the Court held that this situation entitled
Tener to compensation for the expropriation of its interest in the mineral claims.
In Manitoba Fisheries Ltd. v. Her Majesty the Queen,  1 S.C.R. 101
the claimant had its business of exporting fish from Manitoba shut down as a result
of the Freshwater Fish Marketing Act, R.S.C. 1970, c. F-13. This statute
created a Crown corporation with a commercial monopoly for the export of fish
from participating provinces, including Manitoba. It was accepted that the claimant's
goodwill had been extinguished by this legislation. The Court held that it was
a taking for which compensation should be paid on "the recognized rule that
unless the words of the statute clearly so demand a statute is not to be construed
so as to take away the property of a subject without compensation".
In this case section 936 of the Municipal Act states:
The council may declare a building structure or erection of any kind, ....in or
on private land or a highway, ... a nuisance, and may direct and order that it
be removed ... or otherwise dealt with by its owner, agent, lessee or occupier,
as the council may determine and within the time after service of the order that
may be named in it.
(3) The council may further order
that, in case of default by the owner, agent, lessee or occupier to comply with
the order within the period named in it, the municipality ... may enter and effect
the removal ... at the expense of the person defaulting, and may further order
that the charges for doing so, ... if unpaid on December 31 in any year, shall
be added to and form part of the taxes payable on that land or real property as
taxes in arrear.
 The Supreme Court of
Canada in its ruling has upheld Nanaimo's right to remove the topsoil under section
936 and to pass resolutions declaring the topsoil a nuisance and ordering its
removal. Section 936 specifically provides that if the owner, agent, or occupier
fails to comply with the order to remove the nuisance, the municipality in this
case can enter and remove the topsoil and charge the person who has defaulted.
If these costs are not paid section 936 provides that they can be added to the
taxes of the land. Nanaimo submits that there cannot be an implied right to compensation
arising from a statutory provision that creates a penalty that can be attached
as a charge on property arising from the failure of a person to obey Nanaimo's
order to remove the nuisance. Compensation to Rascal for the removal of the nuisance
would defeat the intention and wording of section 936.
Rascal submitted that Nanaimo had granted Rascal a permit to bring the topsoil
onto the property, and then after Rascal had expended money in bringing the topsoil
onto the property, Nanaimo refused to grant it the necessary business license
to sell the topsoil from the property. Rascal was left with orders to remove the
topsoil but no place from which it could sell the topsoil. Rascal claimed that
in these circumstances it had no option but to refuse to move the soil which would
have meant incurring further costs and no clear means to recover the costs.
I see the facts in this situation as quite distinct from those in either Tener
or Manitoba Fisheries. While Rascal had a permit to bring topsoil onto
the Hammond Bay Road property, it had an obligation to do so without creating
a nuisance. By creating a nuisance it has attracted the regulatory procedures
set out in section 936. This includes the penalty of either having to incur the
costs to remove the nuisance or, in the alternative, to pay the costs of Nanaimo
removing the nuisance. This is to be contrasted with the circumstances in both
Tener and Manitoba Fisheries where the claimants had done nothing
to trigger the legislation. The claimants' property interests were taken away
as an incidental by-product of legislation whose purpose was to create a park
that had no mining activity and to create a new Crown agency for the inter-provincial
trade in fish. In the present circumstances, it appears to me that this is a case
that falls into the category of government regulation where no compensation is
contemplated rather than one of expropriation.
I turn now to the question of whether the requirements for an expropriation under
the Act are present. There have been no procedural steps taken by Nanaimo under
the Act. However, this in itself is not determinative. A government cannot claim
its own failure to follow the formalities set out in the Act as a reason to deny
the claimant compensation under the Act. See McEachern v. British Columbia
Hydro and Power Authority.
 If there has been an
expropriation of Rascal's interest, Rascal would have a claim pursuant to either
section 31 or 40 of the Act. These sections provide:
board must award as compensation to an owner the market value of the owner's estate
or interest in the expropriated land plus reasonable damages for disturbance but,
if the market value is based on a use of the land other than its use at the date
of expropriation, the compensation payable is the greater of|
market value of the land based on its use at the date of expropriation plus reasonable
damages under section 34, and|
market value of the land based on its highest and best use at the date of expropriation
(1) ||Subject to section
44, if part of the land of an owner is expropriated, he or she is entitled to
market value of the owner's estate or interest in the expropriated land, and|
following if and to the extent they are directly attributable to the taking or
result from the construction or use of the works for which the land is acquired:|
the reduction in the market value of the remaining land;|
reasonable personal and business losses.|
In order to find an expropriation there are a number of elements that must be
present. See Vancouver Marina (1971) Ltd. v. British Columbia (Minister of
Transportation and Highways) (2000), 70 L.C.R. 137 (B.C.E.C.B.).
i a taking of land
Reading the definition of "expropriate" and sections 31 and 40 of the
Act together makes clear that an expropriation under the Act requires a taking
of land or, at a minimum, a partial taking of an owner's interest in land. In
this case there is no question that there has been a taking of topsoil that was
brought onto the Hammond Bay Road property. Rascal submits that the topsoil is
land by definition. Rascal also refers to various documents issued by Nanaimo
council, and various decisions of the courts in this matter that Rascal suggests
treat the topsoil as land or real property.
relied on the case of Guiliano Construction Co. v. Simmons (1960), 147
Conn 441 (Supreme Court of Connecticut) as authority for the principle that when
topsoil is severed from its original position and brought onto different land
it becomes personal property. The topsoil might become a fixture if its new position
on the land was intended to be permanent. But in Guiliano Construction
the Court held that since the size of the pile of topsoil was the height of a
two-storey house, this was sufficient basis for a determination that the topsoil
was personal property and not a fixture on the land.
In this case Rascal brought a very large pile of topsoil onto the land in order
to sell it. Photos showed that this pile, like the one in Guiliano, was
as tall as a house. It is common ground that the topsoil was not intended to stay
on the property on Hammond Bay Road as a permanent fixture. In these circumstances
I accept the principle that the topsoil is personal property and not land. The
fact that the topsoil is personal property is not contradictory to the Supreme
Court of Canada finding that the topsoil fell within the phrase "building,
structure or erection" in section 936 of the Municipal Act. The topsoil
is a temporary "building, structure or erection" that is personal property.
I do not agree with Rascal's submission that the various documents produced by
Nanaimo with respect to the topsoil do refer to the topsoil itself as real property
and even if they did, a description in a document cannot transform the nature
of the topsoil into real property.
the consent of the owner
 Part of
the definition of expropriation is that the taking of land is done without the
consent of the owner. Rascal has not co-operated in nor consented to the taking
of the topsoil. However, that is not necessarily conclusive. In certain circumstances
an owner can be said to have consented to the taking of some part of his or her
property even though there has been no express consent. Professor Todd discusses
at p. 21 how in making an original grant of land, the Crown may reserve the right
to take back or "resume" some part of the land for a public purpose,
such as road-making. In such circumstances the owner in effect consented to the
Crown's subsequent taking by virtue of accepting the land under the terms of the
reservation in the grant.
 Similarly, in Vancouver
Marina, this Board held that the claimant had consented to the taking of property
where the claimant had entered into a lease with the North Fraser Harbour Commission
("NFHC"). The lease permitted the NFHC to resume the land at any time
if in the NFHC's opinion the land was required for government or public purpose.
The claimant alleged that it had never consented to the taking of its property
by NFHC. However, the claimant had entered into a lease that in effect gave consent
in certain circumstances.
 In the present case, the
Supreme Court of Canada has upheld Nanaimo's ability under section 936 of the
Municipal Act to declare the topsoil a nuisance, to make an order that
Rascal remove the topsoil, to remove the topsoil if Rascal refused to do so, and
finally to add the charges to remove the topsoil to the taxes of the real property
on which the nuisance was situated. Rascal's lack of consent to the taking of
the topsoil has been overridden by the fact that it created a nuisance and brought
into play regulatory procedures under a statute that have been confirmed by the
Supreme Court of Canada.
 In Mariner Real Estate
Ltd. v. Nova Scotia (Attorney General) (1999) 68 L.C.R. 1 (N.S.C.A.) the Court
was also considering the question of whether an expropriation had occurred. I
find Cromwell J.A.'s comments at p. 25 to be relevant:
the term "land" must be given a broad and liberal interpretation, the
interpretation must also respect the legislative context and purpose. As I will
develop below, the Expropriation Act draws a line, on policy grounds, between
the sorts of interference with the ownership of land that are compensable under
the Act and those which are not. That line, in general, is drawn where
land is taken. In interpreting where this line falls, the Court must give the
term a meaning which is both consistent with the Act's remedial nature
but also with appropriate regard to the legal context in which the term was adopted.
It is not the court's function, as it would be if applying a constitutional guarantee
of rights of private property, to evaluate the legality or fairness of where the
legislature has drawn the line, but to interpret and apply it.
I conclude that Nanaimo's removal of the topsoil was not an expropriation under
the Act with a right of compensation under either section 31 or 40.
affection with no land taken
 If there has been
no expropriation then the only other means by which the board could have jurisdiction
is if there has been injurious affection with no land taken within the meaning
of section 41 of the Act which provides:
In this section, "injurious affection" means injurious affection caused
by an expropriating authority in respect of a work or project for which the expropriating
authority had the power to expropriate land.
(2) The repeal
of the Expropriation Act, R.S.B.C. 1979, c. 117, and the amendments and
repeals in sections 56 to 128 of the Expropriation Act, S.B.C. 1987, c.
23, are deemed not to change the law respecting injurious affection if no land
of an owner is expropriated, and an owner whose land is not taken or acquired
is, despite those amendments or repeals, entitled to compensation to the same
extent, if any, that the owner would have been entitled to had those enactments
not been amended or repealed.
 Some of
the same difficulties in finding an expropriation apply to this section. Section
41 provides for compensation for injurious affection to an owner's interest in
land in circumstances where none of that owner's land has been taken. In order
to qualify for any compensation under section 41, a claimant must meet the four
common law tests for injurious affection set out by the Supreme Court of Canada
in R. v. Loiselle,  S.C.R. 624, at p. 627. Rascal faces difficulty
in meeting the third test, the "Nature of the Damage Rule". It is established
law that for a claimant to be entitled to compensation for injurious affection
where no land has been taken, the damage must be an injury to the land itself
and not an injury to business or trade. In this case, Rascal's primary claim is
for the business loss of not being able to sell this topsoil. It is not clear
that there is any injurious affection to an interest in land of Rascal's that
has arisen as a result of the topsoil being removed.
In any event, Rascal has other difficulties in meeting the common law tests for
injurious affection. Another requirement is that there must be statutory authority
for the activity that caused the injurious affection and any compensation is as
provided for in that legislation. Rascal relies on sections 544 and 557 of the
Municipal Act. Section 544 provides for the municipality to provide compensation
to owners or occupiers of real property for injurious affection necessarily resulting
from the municipality exercising any of its powers. Section 557 provides that
the municipality may enter onto land which may be injuriously affected by the
exercising of any of its powers for the purpose of mitigating any injury. Section
936 of the Municipal Act authorized the removal of the topsoil as a nuisance.
When this section is read together with sections 544 and 577 of the Municipal
Act there can be no finding of injurious affection for which compensation
is payable to Rascal arising from the taking of the topsoil under section 936.
I conclude that Rascal does not have a claim for injurious affection with no land
taken under section 41 of the Act.
Since Rascal does not have a claim for expropriation or injurious affection then
the Board has no jurisdiction with respect to Rascal's claim. As a result Rascal's
compensation claim is dismissed.