June 30, 1997, E.C.B. Control No. 45/94/144 (61 L.C.R. 275)

Between:Francis George Tucker and
Launa Elaine Inkster
Claimant
And:Her Majesty the Queen in Right of the Province of
British Columbia as represented by the Minister of
Transportation and Highways
Respondent
Before:Susan E. Ross, Presiding Member
Julian K. Greenwood, Board Member
Sharon I. Walls, Board Member
Appearances:Robert S. Cosburn, for the Claimants
Robert Musto, for the Respondent

 

REASONS FOR DECISION

1. INTRODUCTION

The present hearing is on liability only. By agreement, the parties ask the board only to consider whether the respondent Ministry of Transportation and Highways ("MoTH") can be liable to the claimants for an expropriation of part of their lands for a highway. If the answer is "yes", then evidence on quantum will be led.

The case involves a road which has been in public use since 1953 or before, and which lies on part of the claimants' land. The road was the subject of a Gazette notice in 1976, purporting to establish it as a public highway under the Highway Act of the day. Because of some procedural events, which will be discussed in more detail, no reference to the road appeared on the specific title to the property when the claimants bought it in 1992. In 1993, the Registrar of the Land Title Office ("LTO") placed a notice of the existence of the road on the subject property's title, using as authority certain Land Title Act provisions dealing with "corrections" of title. In 1996, MoTH filed a statutory right of way plan against the subject title. The claimants now say that the sequence of steps in 1993 and 1996 must amount to an expropriation, since they no longer have a portion of the land which they thought they had acquired.

In their pleading, the claimants also advanced an alternative argument that they have suffered injurious affection, even if no land has been taken from them, relying on s. 40 (3) of the Expropriation Act, S.B.C. 1987 c. 23, now s. 41 (3) of the Expropriation Act, R.S.B.C. 1996, c. 125 ("the Act"). This claim was abandoned at the hearing.

 

2. BACKGROUND

The subject property is legally described as the south 200 ft. of the southwest 1/4 of Section 12, Township 78, Range 15, West of the 6th Meridian, Peace River District, PID: 016-033-825. It is a rectangle, 200 ft. (about 61 m.) in the north-south direction by about 2636 ft. (804 m.) in the east-west direction. Its area is about 12.1 acres, or 4.9 ha.

The quarter-section of which the subject property was a part is referred to as "the SW1/4" of Section 12. The road in question runs east-west along the southerly edge of Section 12, and therefore of the subject property. The road separates Section 12 from Section 1 of the township, and its centreline is along the original boundary between these sections. It connects Dawson Creek, B.C. to Pouce Coupe, Alberta. On later plans the road is described as "Highway 2 -- Dawson Creek to Alberta Boundary". Here, it is simply referred to as "the highway".

The highway is shown on a 1953 plan. According to notations on that plan, it was created for filing in the Land Title Office, but there is no other evidence that the plan was in fact filed.

The SW1/4 was sold by the Director, Veterans' Land Act, to a Regina lawyer called Donald MacPherson on June 5, 1953 for $6,200. There was no indication on the deed of a road allowance affecting the SW1/4.

Mr. MacPherson sold the SW1/4, less the south 200 ft., to the Village of Dawson Creek on September 11, 1957. Dawson Creek obtained a new certificate of title for that portion on January 27, 1958. MacPherson kept the south 200 ft. on which part of the road in fact lay. This south 200 ft. of the SW1/4 is the subject property in this proceeding. No new title was issued for the subject property until 1990.

Dawson Creek also acquired the SE1/4, just to the east of the Lands. It sold its northern portion of the SW1/4, together with the SE1/4, to the federal Crown on April 3, 1962.

On March 18, 1976, the Department of Highways and Public Works ("DHPW"), MoTH's predecessor, published a Gazette notice of a plan held in its offices, which had the purported effect of establishing the highway as a 66 ft. right of way along the southern boundary of the SW1/4. According to this plan, which was dated January 14, 1976, the right of way took an east-west strip with a depth of 66 ft. from the southern edge of the SW1/4. There was no indication on this 1976 plan that the SW1/4 had been previously subdivided, and that the 66 ft. would actually come out of the 200 ft. wide subject property, rather than out of the whole SW1/4. The road had been drawn on a background showing relevant quarter sections, but not showing any subsequent subdivisions of those quarter sections. This feature of the 1976 plan seems to have been the source of the subsequent problems experienced by the claimants. It was described by the claimants' counsel as an error or omission for which MoTH should be held responsible.

A copy of the Gazette notice was forwarded to the Land Registry Office ("LRO") and received by it on March 22, 1976. Three days later the LRO received the plan itself, with a notice prepared by DHPW under the Highways (Notices) Regulation (B.C. Reg. 171/68). This latter notice, together with the plan, was filed by the LRO under number L7246. The notice contained a schedule of properties which would be affected by the plan, the objective of which was to permit the Registrar to make notations of the existence of the highway against affected certificates of title.

However (as previously observed), DHPW had drawn the highway plan on an out-of-date background, which did not show the existence of the subject title. The schedule of affected properties also failed to make specific mention of the subject title. The only relevant reference in the schedule (reorganizing the words somewhat) is that the highway affects "those portions of SW1/4 Section 12-78-15 W6M, and containing 4.0 acres more or less, as shown outlined in red on the attached sketch or plan".

No reference to this 1976 highway establishment found its way onto the subject title. It seems likely that the manner of expression in the schedule and the lack of detail in the supporting plan were the reasons why the Registrar failed to make a note of the 1976 plan on the subject property's title. It appears from handwritten notations on the schedule that efforts were made by someone to relate the schedule to particular title numbers, and it is clear that the subject title number was not found in that process.

Many years later -- on March 23, 1990 -- MacPherson sold the subject property to Burkay Properties Ltd. of Regina. Burkay in turn sold it to the claimants, Tucker and Inkster, who registered their title on October 5, 1992, without any reference to a road right of way. It is conceded for the purpose of this hearing that the claimants are "bona fide purchasers for value" who had no actual notice or knowledge of the existence of the highway on their property. The subsequent discovery that there was a road allowance made a very significant difference to what they thought they had bought. It reduced the total area of the property by about 1/3, from about 12 acres to 8 acres.

After the claimants acquired the subject property, steps were taken to note the existence of the highway against its title. The first step, taken by the Registrar of what had by then become the LTO, was to add specific reference on the title, of the 1976 notice under the Highway (Notices) Regulation. This was done on February 23, 1993. The authority claimed for this was s. 311 and s. 312 of the Land Title Act, R.S.B.C. 1979, c. 219, which permit the Registrar to make certain types of corrections to titles, so long as they do not affect the rights of bona fide purchasers for value. It does not appear that the claimants were notified of the Registrar's intention to make such a "correction", so as to give them an opportunity to dispute. The evidence shows that the claimants' lawyer asked the Registrar for an explanation in April 1994, and was only then advised of the reason for the new notation. This correspondence also shows that the claimants' lawyer asked the Registrar to reconsider, and place a caveat on the title showing the dispute. The Registrar refused.

Later, and perhaps in light of observations about the limits of the Registrar's power to "correct" titles under s. 311 or s. 312, the LTO accepted MoTH's application under s. 115 (2) of the Land Title Act for the deposit of a "statutory right of way plan" against the title to the subject property. A look at the plan itself (PGP39865, March 21, 1996) suggests that it was also used to support a number of similar applications for other properties affected by the same highway. Where this plan affects the subject property, it covers the same land area as in the 1976 plan.

Section 115 appears to provide for the registration of old highway acquisitions against titles in a more modern and satisfactory manner. The section requires that MoTH certify, in prescribed form, that it has acquired a property and that the title has vested in the Crown under Highway Act provisions. This is what MoTH did -- certifying that the highway had been established across the subject property by the Gazette notice of March 18, 1976. The new statutory right of way filing is then stated to "supersede" the older filing.

 

3. THE CLAIM

MoTH's claim for a legal interest in the highway dates from its Gazette notice of March 18, 1976. Yet neither MoTH nor its predecessor, DHPW, did anything in the LRO (now the LTO) which was effective to give owners of the subject property specific notice of its interest until February 23, 1993. Thus the claimants say they acquired the property in October 1992 without reference to MoTH's interest.

The claimants assumed they were buying 200 ft. from the road boundary. In fact they were only getting 200 minus 66, or 134 ft. Instead of getting 12+ acres, they were getting about 8 acres -- 1/3 less. Because this was rural acreage, with more rural acreage to the north, there were no physical markings (such as fencing) which made it obvious on visual inspection that the property was much less than 200 ft. deep. The claimants would have had to hire a surveyor to find that out. They should be entitled, they say, to rely on the description in the LTO. That description, at the time they bought, contained no reference to a road allowance on their property.

The claim is that MoTH's actions in 1993, 1996, or both, amounted to an expropriation, and hence the claimants are entitled to (a) the value of the 4 acres taken, (b) an amount for injurious affection to the remainder, and (c) added expense in developing the land -- either disturbance damages or personal or business losses.

The claimants say that they bought the full 200 ft. depth, because, in their view, the 1976 Gazette notice was flawed. Thus, they argue, MoTH did not acquire the south 66 ft. until it registered its interest at the LTO either in 1993 or 1996. Whichever event the board finds to have the effect of an expropriation provides the date of that expropriation.

Various arguments were advanced by the claimants as to why the 1976 Gazette notice was invalid:

(a) They argued there must have been a duty on DHPW or MoTH to act in such a way as to effect a registration of the 1976 Gazette notice against particular titles. Until that was done, the Crown's title would remain incomplete or "inchoate". The case of Madalozzo v. Abbotsford and the Registrar of Land Titles Office, New Westminster, B.C. (1985), 64 B.C.L.R. 359 (S.C.) was relied upon. When the title was finally "completed" by some form of registration, then the expropriation would be effective.
(b) Alternatively, if there was no duty on MoTH or its predecessor to register anything against the title, DHPW did embark on a process designed to result in such notations on title. Unfortunately it did it badly, and its negligence resulted in loss to the claimants. Had it properly described the state of subdivision in its 1976 plan and schedule, there would have been a notation on title, and the claimants would have noticed the road allowance when bidding for the property.
(c) In the further alternative, even if DHPW had validly expropriated the land in 1976, nevertheless MoTH's subsequent actions in 1993 or 1996 were inconsistent, and it should not be allowed to rely on those recent filings while at the same time claiming a pre-existing valid interest. MoTH could perhaps elect between alternative legal theories and remedies, but could not rely on both.

This argument was made most strongly in respect of the 1996 filing. If MoTH already had title, according to claimants' counsel, it would not have needed to file a statutory right of way plan in 1996. Its action in filing a plan, he claimed, triggered s. 107 of the Land Title Act, which most clearly takes title away from the present owners and vests it in the Crown. This would be inconsistent with the theory that the Crown had already held that title for 20 years, and MoTH should not be permitted to assert such a thing.

(d)Although the previous argument seemed to the board to be an estoppel argument, claimants' counsel also argued estoppel in a slightly different form. He said that the claimants were entitled to rely on the assumption that MoTH (or DHPW) would have registered its interests against relevant titles. Since it had not, and the claimants had suffered loss, it would be unfair for the claimants to suffer the consequences. In effect, MoTH should be estopped from asserting its title ahead of that of the claimants.

 

4. MoTH'S RESPONSE

Fundamentally, MoTH's position was that it obtained its interest over the entire 66 ft. of the subject property in 1976, by the valid process of "gazetting". Having done so, it cannot be said to have later expropriated the same interest merely because it recorded it in the LTO.

MoTH pointed out that so-called "indefeasible" titles are in fact always subject to certain kinds of unregistered interests, and that one of these is the existence of an established highway. Section 23 (1) (e) of the Land Title Act expressly says that indefeasible titles are subject to "a highway or public right of way, watercourse, right of water or other public easement." In light of this, it is not relevant whether MoTH's interest is registered against the subject title. As long as the highway and the Crown's title to the highway were validly established under prevailing law, the claimants did not acquire title to that area of land. Since the claimants never acquired it, they could not lose it. Thus there can be no expropriation now when the Crown is simply asserting its existing rights.

MoTH then argued that the provisions of the Highway Act in 1976 permitted the establishment of a highway, and the vesting of title in the Crown, by the simple means of publishing a notice in the Gazette setting out "the direction and extent" of the highway. MoTH says that this was done and there was no requirement that this step be followed by any filing at all in the LRO. Thus the statutory regime simply did not require that there be a notification on title for the highway to exist. The Crown's title is established by the gazetting, and thenceforward takes precedence even over that of a bona fide purchaser for value.

MoTH also suggested an alternative argument about the establishment of the highway which would only arise if the board was to find that the 1976 Gazette notice was invalid. The road appears to have been constructed in the 1950's without even the formality of a gazetting. It is, of course, possible to establish a public highway by other means -- and one of them is by the simple expenditure of public money on a travelled road. (This is known today as a "section 4" highway, referring to s. 4 of the Highway Act as it exists today. The equivalent section in the 1950's would have been s. 6.)

MoTH showed that its predecessor paid compensation to the owners of the day. The SW1/4 had been occupied under the Veterans' Land Act by a veteran called Cleese. The land was sold to McPherson in 1953, and although compensation was paid shortly after that, it was actually paid to the Director, Veterans' Land Act, on behalf of Cleese. The compensation was not for the land, since DHPW asserted its right under the Highway Act to resume up to 1/20th of the land for highways without compensation. Thus the Director, (or Cleese), received $40 for the loss of some crops in the year of construction. Although the amount of money was small, this was apparently a pattern of action consistent with a creation of a highway back in the 1950's. The area of the highway at that time would be less than the area claimed today. It would be the travelled or constructed width of some 15 ft. on each side, as opposed to the 66 ft. per side established by the 1976 Gazette notice.

 

5. DISCUSSION

The reason why the 1976 Gazette notice did not find its way onto the subject title was discussed above. Had DHPW used an up-to-date subdivision plan of the area on which to draw its road plan, it seems likely that there would, in fact, have been a notation against the subject title. The claimants see this as significant, and say that it is evidence of carelessness on the part of DHPW for which they should not suffer.

However, there was no requirement that the gazetted announcement be registered against specific titles. The highway was legally established merely by the gazetting. This was the effect of s. 8 of the Highway Act, R.S.B.C. 1960, c. 172, which used to read as follows:

8. (1)

The Minister in his absolute discretion may

(a)

make public highways of any width; and

...
(d)declare the same by a notice in the Gazette setting forth the direction and extent of such highway.

The board is bolstered in its conclusion that no particular filing against title was necessary by the wording of the Highways (Notices) Regulation which was in effect in 1976 (B.C. Reg. 171/68). This Regulation made it optional, but not mandatory, for a notice to be filed with the LRO. Section 1.01 of the Regulation provided:

1.01 Where the Minister of Highways exercises any of his powers under the Highway Act or the Department of Highways Act in respect of any land for which a certificate of title has been issued, he may cause notice thereof to be presented for filing with the Registrar of the land registration district in which the land is situated. [emphasis added]

The Regulation went on to say that the Registrar was to file the notice and note it both in the numerical index and in "the proper register against the title to which the notice relates". However, it further stated at s. 3.01 (2) that:

(2) The absence of any notation as aforesaid does not imply that the land described in the certificate of title is not affected by any exercise of a power under the Highway Act or the Department of Highways Act.

The board is forced to conclude from these words that there was no requirement to file anything with the LRO, and, moreover, that no person using the land registry was entitled to rely on it as confirming the absence of a highway.

These conclusions are further confirmed by s. 23 (1) (e) of the Land Title Act, R.S.B.C. 1979, c. 219. Patently, this provision would be unnecessary if all highways had to be registered against title to be validly established. A bona fide purchaser of land has no defence of lack of notice against any of the matters in (a) to (k) of s. 23 (1). If there are unpaid taxes of which the purchaser has no notice, those taxes still charge his or her interest in the land.

All these provisions demonstrate a legislative intent that highways could be established, and that the Crown's title to those highways could still continue to be asserted, without any recording against the land titles which they affect.

The claimants referred to the Madalozzo case for the principle that the title of the Crown remained "inchoate" until it was registered against the affected title. However, Madalozzo involved the different context of a resumption, at the instance of a municipality, of a road allowance reserved in the original Crown grant. The procedure was governed by the 1924 Municipal Act and the Land Registration Act. A bylaw and a plan prepared by a B.C. Land Surveyor had to be filed in the LRO. The latter statute specified that the plan had to show every affected parcel. Subsequently an application had to be made to "raise" the title of each affected parcel (i.e. revest the title to the highway area in the Crown). It was in this legislative context that the Court found the Crown's title would remain "inchoate" until the application to raise title was made and accepted. In the present case, the statutory requirements sufficient to vest title in the Crown were considerably simpler. The board finds the governing legislation to be sufficiently different that Madalozzo does not assist the claimants in the present case.

The sufficiency of gazetting by reference to a plan held in the MoTH offices was confirmed in Place Inns v. MoTH (1985), 33 L.C.R. 382 (B.C.S.C.). Now the claimants point out that Place Inns can be distinguished, because the Gazette notice in that case made reference to the specific lot which was under consideration, and because there was no question that the petitioner had actual notice of the plan (a copy had been given to it). The argument in Place Inns was strictly a technical one -- whether the form of the Gazette notice was adequate. The Court found that it was, when considered together with the referenced plan.

The claimants say that the Gazette notice in this case must be considered inadequate if it does not identify the particular lot, or if because of its manner of expression the existence of the highway does not in fact become noted on the subject title. However that is plainly not the requirement of the statute, which is simply that the notice must set forth the "direction and extent" of the highway.

It is true that a bald statement of direction and extent might not be sufficient to identify the location of the highway with any assurance. For example, a Gazette notice that simply defined the highway as running "east-west for 50 miles", but did not say where in British Columbia, would be inadequate. But where, as in this case, the description and plan give sufficient detail that a surveyor could lay out the highway with precision, the board feels that s. 8 of the Highway Act must have been satisfied.

The board recognizes that this statutory situation can operate harshly, but it is not in a position to rewrite the law. No doubt this was one consideration which led to the abandonment of the entire process of establishment of highways by Gazette notice. In 1987, those provisions were repealed. From then on, MoTH has been required to expropriate under the Act.

The result of these observations is that the Crown has a valid title to the area of land described in the 1976 plan and Gazette notice, and that the highway has indeed existed to its full 66 ft. width over the subject property since that year. It follows that there was no new expropriation in 1993, 1996, or at any other time.

The 1993 "correction" to title appears to the board to make no difference to the argument one way or the other. Sections 311 and 312 of the Land Title Act do not authorize the Registrar to make a correction to the detriment of the interests of a bona fide purchaser for value, so if the claimants had an interest, it would not have been affected. However the board has found that the claimants had never acquired an interest in the highway lands.

The 1996 filing of a statutory right of way plan is more significant, but not for the reasons asserted by the claimants. They argued that this was an unequivocal "taking", and gave two reasons. Their counsel first pointed to s. 107 of the Land Title Act as authority that the deposit of a plan of a highway operates as an "immediate and conclusive dedication by the owner to the public of that portion of land shown as a highway", and that it acts "to extinguish the owner's common law property" in that portion of land. He then argued that MoTH could not be allowed to take two inconsistent positions: to assert on the one hand a process that was clearly a recent expropriation, while at the same time insisting that it already held the title by an earlier process.

The flaw in this argument is that s. 107 is not, in the board's view, applicable. By its terms it is applicable only to the deposit of a "subdivision, reference, or explanatory plan" (which shows a portion of the land as becoming a highway or other public use). Each of these types of plans is a distinct creature under the Land Title Act, and all of them are different from a statutory right of way plan. The relevant provision is s. 115 of the Land Title Act. This is the authority for the filing of the application known as "Form 12", which was the application filed by MoTH in 1996. Section 115 is expressly designed to allow MoTH to deposit plans against titles of highways created by Highway Act procedures. It is not inconsistent with prior ownership, as the claimants suggest. Therefore the claimants cannot succeed on their argument that MoTH's use of s. 115 is inconsistent with its assertion of prior title.

The board has concluded that the 1976 Gazette notice and plan did establish the highway at that date on the subject property, and that the highway continued to exist notwithstanding subsequent steps taken at the LTO in the 1990s. The claimants have argued forcefully that this situation is unfair, and demands a remedy. The scheme of the Land Title Act is that people should not have to search beyond the certificate of title to discover "clouds" on title.

As much as the board sympathizes with this point, the truth is that there are some clouds that have to be the concern of purchasers. They are found in s. 23 of the Land Title Act. Where, as in this case, the property is a rural acreage, a survey may be necessary to discover the presence of a highway.

The claimants go too far in their search for a remedy when they seek to convert a delayed registration (even if the delay was unintended) into an expropriation. All that MoTH did was point out to the Registrar that there is a highway in existence, and that its valid existing interest in property was not recorded on title.

 

6. CONCLUSION

The board must dismiss the application.

The matter of costs should be considered. Since there has been no expropriation, s. 45 (3) of the Act does not apply to entitle the claimants to their costs. Since the claim for relief under s. 41 (3), although made, was withdrawn at the start of the hearing, the board does not feel inclined to award costs to either party with respect to that issue. The board has no other statutory jurisdiction under which to base an award of costs, and so makes no award.

 

 

Government of British Columbia