January 13, 1997, E.C.B. Control No. 01/94/131 (60 L.C.R. 186)

 

Between: Dale Todd McEachern
Claimant
And: British Columbia Hydro and Power Authority
Respondent
Before: Robert W. Shorthouse, Chair
Fiona M. St. Clair, Vice Chair
Susan E. Ross, Board Member
Appearances: Robert S. Cosburn, for the Claimant
Aki Lintunen, for the Respondent

 

1.0 INTRODUCTION

This is a determination of a preliminary point of law: whether there is jurisdiction under the Expropriation Act, S.B.C. 1987, c. 23 (the "Act") for the claimant, Mr. McEachern, to bring a compensation claim for the presence on his land of a hydro pole and lines of the British Columbia Hydro and Power Authority ("Hydro"). For this decision, the board considered the pleadings, which consist of McEachern's compensation claim form and Hydro's reply, and written submissions from both parties. We have assumed that the facts in the compensation claim can be established and have not found it necessary to weigh or resolve contested facts.

The compensation claim was filed on April 28, 1994, and amended on June 3, 1994. McEachern seeks compensation for the value of land taken or occupied, injurious affection to the remainder of his land, disturbance damages, costs and interest.

 

2.0 FACTS

McEachern is the registered owner of land in the City of Nanaimo. He purchased his property in July 1993 and shortly thereafter his title was registered in the Land Title Office. A power pole belonging to Hydro, with hydro lines running to and from it, was already on the land at the time of McEachern's purchase. McEachern says that he has never consented to or been paid any compensation for the presence of Hydro's works on his land, and that they interfere with its use and development capability and reduce its value.

Hydro admits, for this decision only, that though its works (the pole and lines) have been on the claimant's land for many years, it has never had any registered interest in the land. There is no evidence that Hydro ever paid compensation to anyone in respect of the works, or complied with statutory procedures or formalities for interference with or taking of this land. Indeed, Hydro has pled and argues, without contest from the claimant, that despite the presence of its works on the land it has never intended, or undertaken by its actions, to exercise any statutory machinery or powers for compulsory taking or interference with the land.

 

3.0 STATUTORY FRAMEWORK OF COMPENSATION CLAIM

McEachern claims that land belonging to him has been de facto expropriated, or alternatively entered upon, possessed and used, by Hydro under s. 16 (1) (a), (b), (c), 16 (2), 16 (8) and 16 (9) of the Hydro and Power Authority Act, R.S.B.C. 1979, c. 188 (the "Hydro Act"). Section 16 of the Hydro Act is set out in full below:

16. (1) The authority may, for any purpose related to the exercise of its powers,

(a) expropriate any property, power site, power project or power plant,

(b) enter, remain on, take possession of and use any property,

(c) on the land that it expropriates,

(i) erect, make or place on the land any structure, installation, excavation or power plant, and

(ii) flood and overflow the land and accumulate and store water on it, and

(d) require and compel any person who generates or supplies power to enter into an agreement to supply to the authority so much of it as the authority requires.

(2) Where land is expropriated under subsection (1), the Expropriation Act applies.

(3) Where the authority exercises a power under subsection (1) that does not constitute the expropriation of land requiring approval under the Expropriation Act, it shall obtain the approval of the minister before the power is exercised.

(4) Where the authority expropriates property under subsection (1) other than land, the authority shall notify the Attorney General and, where required by the Attorney General, file a notice describing the property at a place designated by the Attorney General.

(5) Notwithstanding any other Act, the property referred to in subsection (3) that is expropriated vests in the authority free and clear of all encumbrances

(a) on filing the notice under subsection (4), or

(b) where no filing is requested, on receipt by the Attorney General of the notification under subsection (4).

(6) After property vests under subsection (5), the authority shall serve on the owner of the property a notice containing a description of the property sufficient to identify it, together with a declaration of readiness to pay compensation in an amount to be agreed on or determined under subsection (9).

(7) Where an owner is absent from the Province or is unknown or cannot be served, the Supreme Court may, on an application of the authority, order that the notice under subsection (6) be published in a manner and for a time that the court thinks proper, and, on publication, the owner shall be deemed to have been served with the notice.

(8) Where the authority exercises its powers under subsection (1), other than in relation to the expropriation of land, it shall pay compensation for

(a) the interest, property, matter or thing expropriated, entered on or used, and

(b) damages to any property that directly result from the expropriation, entry or use.

(9) Where the authority and a person entitled to compensation fail to agree on the amount of compensation payable under subsection (8), it shall be determined by the Expropriation Compensation Board established under the Expropriation Act.

Under s. 1 of the Act: 'expropriate' means the taking of land by an expropriating authority under an enactment without the consent of the owner ... " and "'expropriating authority' means a person ... empowered under an enactment to expropriate land". It is not contested that Hydro is an expropriating authority by reason of its powers under s. 16 of the Hydro Act.

Jurisdiction conferring provisions of the Act relevant to this decision are:

25. (1) The board shall determine

(b) compensation to be paid under sections 8 (3), 18 (4), 29 and 39,

(c) compensation to be paid, or any other matter to be determined, where jurisdiction is given under any other enactment, ...

29. (1) Where land is expropriated, every owner on the land is entitled to compensation, to be determined in accordance with this Act.

Section 2 (2) (d) of the Act provides that it does not apply to an entry under s. 41 (1) of the Hydro Act. The power of entry given in s. 41 (1) is a limited one for purposes of construction, maintenance and repair of Hydro works and facilities. Though, by reason of s. 2 (2) (d) of the Act, the expropriation procedures in the Act do not apply to entries under s. 41 (1), s. 41 (2) of the Hydro Act expressly confers jurisdiction on the board to determine compensation for damages arising out of entries under that section. The claimant has not sought to rely on s. 41.

 

4.0 ISSUES

The following issues present themselves for resolution by the board:

(a) Can the board examine the limits of its own jurisdiction to hear a compensation claim founded on an alleged de facto expropriation or interference?

(b) If so, can the board hear such a claim in circumstances where:

(i) the expropriating authority says the facts alleged would found a trespass action;

(ii) the claimant has not pursued legal remedies for a trespass claim;

(iii) the expropriating authority has never complied with, or purported to comply with, statutory procedural requirements for compulsory taking or interference with the claimant's land or other property;

(iv) the claimant is purporting to waive the procedural non-compliance of the expropriating authority;

(v) third parties have not been joined in the compensation claim proceedings under the Act;

(vi) there is uncertainty as to the exact physical dimensions of any taking or interference?

(c) If the above questions are answered in the claimant's favour, could the facts pled in the compensation claim establish:

(i) a de facto expropriation under s. 16 (1) (a) and (c) of the Hydro Act, or

(ii) a de facto interference under s. 16 (1) (b), (8) and (9) of the Hydro Act, so as to give the board jurisdiction to determine compensation under s. 25 (1) (b) or (c) of the Act and s. 16 (2) or (8) of the Hydro Act?

 

5.0 PARTIES' POSITION

5.1 Position of Hydro

Hydro says that the board is without jurisdiction to determine this claim because, despite the presence of its works on the land, there has been no expropriation or compulsory statutory entry, possession or use of the land. Hydro's point is that it has never exercised or purported to exercise any powers under the Act or under s. 16 of the Hydro Act in relation to the hydro pole and lines. Hydro maintains that such powers cannot be exercised inadvertently or without compliance with mandatory statutory preconditions, and in its reply pleading also relies upon rights it may have to maintain and operate these works on the claimant's land under "contract law, quasi-contract law, property law, common law or equity, ... by licence or proprietary estoppel." According to Hydro, rather than being compensation issues, these are civil and property rights issues which affect third parties and can be determined only by a court, not the board.

Hydro has referred us to numerous authorities in support of the proposition that because the board's authority flows strictly from legislation, we may only determine compensation claims and make compensation orders over the matters and within the limits of that statutory jurisdiction: McKinnon v. City of Duncan (1992), 47 L.C.R. 47 (B.C.E.C.B); Coates and Waque, The New Law of Expropriation, Vol. 1 (Toronto: Carswell, 1993) at 35-52; E.C.E. Todd, The Law of Expropriation and Compensation in Canada, 2d. ed. (Toronto: Carswell, 1992) at 541; Country Style Holdings Inc. v. Ministry of Transportation and Highways (1993), 51 L.C.R. 1 (B.C.E.C.B.), and Sara Blake, Administrative Law in Canada, (Toronto: Butterworths, 1992) at 104.

Hydro emphasizes that unless authority to do so is given in a statute, the board has no jurisdiction to determine common law claims for trespass or nuisance or to make awards for punitive damages: Hruschak Estates v. Vernon (City) (1993), 51 L.C.R. 81 (B.C.C.A.) per Toy J.A. and Jesperson's Brake and Muffler Ltd. v. Chilliwack (District) (1994), 54 L.C.R. 95 (B.C.C.A.) per Finch J.A. The board's jurisdiction under s. 40 of the Act to hear and determine injurious affection claims is submitted as an example of board statutory authority over an otherwise common law claim.

On the issue of whether there was a "taking of land" under s. 16 (1) (a) of the Hydro Act and, if so, whether it was "under an enactment without the consent of the owner", Hydro distinguishes the entry, possession and use of land from the expropriation of land Re B.C. Electric Company Limited v. Hoppe (1955), 18 W.W.R. 238 (B.C.S.C.), and says that the presence of Hydro works on McEachern's land is simply not a taking or expropriation.

Hydro then responds to the issue of whether the presence of its works is an occupation of McEachern's land under s. 16 (1) (b) of the Hydro Act, so that the board has jurisdiction under s. 16 (9) of the Hydro Act to determine the compensation payable for that occupation, by saying that the various approvals required from the relevant Minister or the Attorney General in connection with the exercise of powers under s. 16 of the Hydro Act are mandatory conditions precedent to the exercise of those powers which it has never even purported to seek or get. According to Hydro, the presence of its works, in the absence of the exercise of s. 16 (1) (b) powers, could give rise to a trespass action between these parties, which would be brought and determined in the Supreme Court, but because there has never been a valid exercise of s. 16 (1) (b) powers there is no basis under the Act or the Hydro Act for the board to "take jurisdiction" of a compensation claim under that heading. This part of Hydro's submission seems to suggest that the board may have an option about assuming jurisdiction over this case, and that the appropriateness or effectiveness of the claimant's remedial avenues in the courts should be a consideration for the board in that regard.

Hydro also says that its works are authorized by rights other than those given in s. 16 of the Hydro Act, which rights involve third parties and are not determinable in a proceeding before the board.

In its reply submission to the board, Hydro summarized its position this way:

... Where there has been no compliance with a statutory condition precedent (such as getting the approving authority approval for an expropriation or the minister's approval for an entry, possession and use under s. 16 (1) (b) of the Hydro Act) the Claimant cannot waive these and claim he has a right to compensation. This is because there has been no expropriation, or exercise of the powers of entry, possession and use.

It is submitted that the appropriate view of the division of jurisdiction is as follows:

(a) If the authority has validly expropriated land, or exercised a right of entry, possession and use then the Board has jurisdiction to determine compensation in accordance with the relevant statutory provisions. There may be some limited procedural irregularities the landowner can waive, however, these cannot amount to a condition precedent or a mandatory provision found in the statute: see Costello cited in the Respondent's earlier submission, Horton and the discussion below.

(b) If there has been no valid expropriation, then the Board has no jurisdiction to deal with claims of compensation: see the McKinnon case. The same is true in relation to an exercise of a power of entry, possession or use for which the Board has jurisdiction to determine compensation in the appropriate circumstances.

For the purposes of this proceeding the Respondent concedes that the Board (but not the Chair or Vice-Chair on their own) can in the first instance determine whether or not an expropriation has taken place, or whether or not an entry, possession and use has occurred in accordance with section 16 (1) (b), 16 (3), 16 (8) and 16 (9) of the Hydro Act. A court of competent jurisdiction would have concurrent jurisdiction for this matter as well.

 

5.2 Position of the Claimant

The claimant argues that when the Act came into force in 1987, the board became the sole adjudicator of compensation claims for losses from authorities taking or occupying land without an owner's consent. The only exception is where the activity is specifically excluded under s. 2 (2) of the Act. A number of cases are cited: McKinnon, White v. City of Prince George (1993), 50 L.C.R. 260 (B.C.E.C.B.), B.C. Gas Inc. v. Lansdall (1992) 48 L.C.R. 209 (B.C.E.C.B) and Petro Canada Inc. and Gulf Canada Ltd. v. The City of Vancouver (1992), 47 L.C.R. 154 (B.C.E.C.B.). McEachern asks us to conclude from these authorities that the board has an obligation to determine its jurisdiction over this compensation claim, which he says means deciding:

(a) whether, despite Hydro's non-compliance with expropriation formalities under the Act or s. 16 of the Hydro Act, the presence of Hydro's works is an expropriation of McEachern's land (what the claimant calls a de facto expropriation), giving the board jurisdiction to determine compensation under ss. 1, 25 (1) (b), and 29 (1) of the Act and ss. 16 (1) (a) and (b) and 16 (2) of the Hydro Act;

(b) alternatively, whether, despite Hydro's non-compliance with formalities for exercising its statutory powers of compulsory interference with land, there has been de facto interference, short of expropriation, giving the board jurisdiction to determine the claim under s. 25 (1) (c) of the Act and ss. 16 (1) (b), 16 (8) and 16 (9) of the Hydro Act.

According to McEachern, the circumstances are wide under which the Act intends an expropriating authority to pay compensation assessed by the board. They exist when the authority follows formal procedures in the Act or the Hydro Act. They also exist when the authority engages in activities which have the same effect on an owner as an expropriation or other compulsory taking, regardless of compliance with statutory procedural requirements. The claimant says that a remedy in tort would only lie against persons "not occupying pursuant to statutory authority, or without expropriation powers", and because Hydro clearly has powers of both expropriation and occupation and its works are installed on his land, the compensation forum must be before the board, not the courts.

 

6.0 ANALYSIS

6.1 The Board's Determination of its Jurisdiction

A jurisdictional issue is one that relates to the interpretation of a statutory provision which confers, describes, or limits the powers of a statutory tribunal: Syndicat des employees de production de Quebec at de l'Acadie v. C.L.R.B., [1984] 2 S.C.R. 413 at pp. 420-421 and U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048 at p. 1085. The board is called upon, not infrequently, to address threshold questions such as whether an expropriation has occurred. In White, the board discussed numerous authorities before concluding as follows at pp. 270-271:

Section 25 of the Act makes it clear that the jurisdiction of the board is directed to determination of compensation. That is not to say that simply because a claimant asserts that an expropriation has occurred, the board will determine compensation. The board must be satisfied that an expropriation in some form has occurred. If there is non-compliance with procedures under the Act, criteria must be met to establish that actions taken by an authority are tantamount to land being taken against an owner's will. Likewise, the fact that an authority and a claimant come before the board seeking to have compensation determined does not necessarily mean the jurisdiction exists for the board to make such a determination. Again it may well be necessary for the board to ensure that an expropriation has occurred and that the matter is a proper one to be considered under the provisions of the legislation. These questions are collateral to the claimant's request for compensation and as such are within the jurisdiction of the board. Such was the case in McKinnon v. Duncan (City) (1992), 47 L.C.R. 47, where the parties came before the board with the sole purpose of having compensation determined. The board, in that instance, was unable to assist as a result of the ambiguity of the by-law. Neither party sought to have the by-law or the expropriation declared invalid and it was a matter of the substance of the by-law, not the process creating the by-law, which precluded the board from its determination of compensation. What is of critical importance in a compensation claim, is the unconditional assertion by a claimant that there has been a taking and that compensation is to be determined by the board.

After White, the ability of a tribunal to explore the limits of its own jurisdiction was again addressed by the Supreme Court of Canada in Matsqui Indian Band v. Canadian Pacific Limited, [1995] 1 S.C.R. 3, a real property tax assessment case about whether a jurisdictional issue had to be taken to an appeal tribunal first before a remedy could be sought from the Federal Court of Canada. Though L'Heureux-Dube, Sopinka, Gonthier and Iacobucci J.J. dissented in the final result, the judgment of Lamer C.J. was concurred in by a majority of the members of the Court (L'Heureux-Dube, La Forest, Sopinka, Gonthier, Cory and Iacobucci JJ.) on the question of an administrative tribunal's ability to determine jurisdictional issues. At pp. 25-26, Lamer, C.J. stated:

It is now settled that while the decisions of administrative tribunals lack the force of res judicata, nevertheless tribunals may embark upon an examination of the boundaries of their jurisdiction. Of course, they must be correct in any determination they make, and courts will generally afford such determinations little deference.

At pp. 26-28, Lamer C.J. went on to note the approach of the court in two previous cases, Abel Skiver Farm Corp. v. Town of St. Foy, [1983] 1 S.C.R. 403, another property tax assessment case, and Terrasses Zarolega Inc. v. Regie des installations olympiques, [1981] 1 S.C.R. 94, an expropriation case, before concluding that Indian Act appeal tribunals could decide the jurisdictional question of whether land was taxable under that statute:

A purposive analysis leads me to favour the "process approach". Parliament clearly intended bands to assume control over the assessment process on the reserves, since the entire scheme would be pointless if assessors were unable to engage in the preliminary determination of whether land should be classified as taxable and thereby placed on the taxation rolls. Given this, I see no reason to interpret s. 83 (3) of the Indian Act as authorizing appeal procedures related only to the valuation step of the assessment process. Such a narrow supervisory control would be inconsistent with Parliament's purpose in authorizing Bands to value and classify property for taxation.

McEachern's compensation claim is premised on his contention that Hydro has either expropriated, entered, possessed or used his land and that the board has jurisdiction over the claim under s. 25 of the Act and s. 16 of the Hydro Act. Hydro takes an opposite position. In light of our review of the foregoing authorities and in keeping with the wording of ss. 25 (1) (b) and (c) of the Act, we conclude that the board has jurisdiction in the course of the process leading to an assessment of compensation to determine whether there has been an expropriation of land under s. 29 of the Act or whether the board has been given authority under another enactment, in this case the Hydro Act, to otherwise determine compensation or any other matter.

 

6.2 Exhaustion of Remedies

The issue before the board is not one of exhaustion of remedies. The board has supervisory control over its process for hearing compensation claims, but this is quite different from an ability to decline or choose to exercise jurisdiction over a claim. That is, a court on judicial review has discretion to decline to grant relief if it perceives that the applicant has not exhausted adequate available alternative remedies. This discretionary nature of prerogative writs exists even in cases involving lack of jurisdiction: see Matsqui Indian Band v. Canadian Pacific Limited, at pp. 29-30 citing Harelkin v. University of Regina, [1979] 2 S.C.R. 561, and Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources), [1989] 2 S.C.R. 49. But we do not apprehend the board to have that kind of discretion in a matter of this nature. If we find that the board has jurisdiction to determine this claim, we have no authority to decline to hear the matter. On the contrary, the board would have to allow the claim to move forward for determination on its merits, subject, of course, to any stay or reversal on a jurisdictional issue by a supervisory or appellate court.

6.3 Availability of Remedies for Trespass or Nuisance

McEachern argues that the board is the sole available forum for its compensation claim, whereas Hydro argues that the courts are the sole available forum for what it says should be a tort action by McEachern. We reject the categorical terms in which both these positions were argued to us.

We agree with Hydro that the board cannot make a declaration of trespass, order the payment of exemplary or punitive damages or otherwise adjudicate a common law cause of action such as nuisance. But those remedies have not been requested in the claimant's Form A or written submissions. Part II of the Form A describes the alleged impact of Hydro's works:

a. the location of the Respondent's works on the lands of the Claimant interfere with the Claimant's use of his property, are unsightly, and hazardous, and reduce the value of the lands owned by the Claimant;

b. access to and across the frontage portions of the lands of the Claimant is restricted by the existence of the Respondent's works, with overhead wires running in north-south and east-west directions;

c. the Claimant's ability to develop and use his lands is severely impeded and restricted by the existence of the Respondent's works, which are located on the most usable, frontage portions of the Claimant's property;

d. the Respondent has at no time paid any rent or other consideration to the Claimant with respect to the unauthorized occupation by the Respondent of the Claimant's lands;

e. the works of the Respondent are permanent, and were installed without the consent of the Claimant;

f. the Claimant says it is entitled to compensation from the Respondent for all heads of claim provided by the Expropriation Act of British Columbia as if the Respondent had properly and lawfully expropriated the land occupied and used by it.

The claim in this case, apart from costs and interest, is for the value of McEachern's land taken or occupied by Hydro, for injurious affection to the remainder of his land and for disturbance damages.

Furthermore, the Hruschak Estates case relied upon by Hydro addressed whether the substance of certain claims were for disturbance damages under the Act, not whether the same facts could be relevant to separate tort and compensation claims. In Hruschak, the Court of Appeal accepted Professor Todd's definition of disturbance damages as "economic loss suffered by an owner by reason of having to vacate expropriated property". The claim was for a wide variety of pre-expropriation activities by Vernon, including a spraying program and construction on neighbouring land, rezoning of the subject land, and refusing to provide or allow the claimant to install a water line to serve the land. The City of Vernon argued that none of those claims was for disturbance damages, and some were for nuisance and other torts. Though the Court of Appeal held that the claims did not constitute disturbance damages, it did not say that conduct relevant to a tort claim, such as one in nuisance or trespass, could not also be relevant to a compensation claim under the Act.

We also reject the claimant's position that a remedy in tort could not lie in the face of Hydro's statutory powers to occupy or take land, because that argument ignores both whether Hydro's impugned actions were taken pursuant to its statutory powers and case law where expropriating authorities have been successfully sued in trespass. One of those cases is Horton v. British Columbia (Ministry of Transportation and Highways) (1991), 45 L.C.R. 171 (B.C.S.C.). Another is Maeckelburg v. Radium Waterworks District (1982), 24 L.C.R. 286 (B.C.S.C.), aff'd. (1983), 28 L.C.R. 257 (B.C.C.A.). Maeckelburg has some similarity to this case in that it involved a water main and sewer line located by an authority on the plaintiff's land without the benefit of registered easements, which easements were only expropriated some years later by the authority's successor, the Regional District of East Kootenay. At trial, Mr. Justice MacKenzie said at 24 L.C.R. 300:

The original trespass was not ended by the expropriation. That being the case the proper forum to determine the damages flowing from the defendant's trespass is this forum, because it is in this forum that the plaintiffs are asserting that those rights which were specifically reserved in the easement were violated. They were denied the right to enter upon the easement area to evacuate for the motel and to put a road over the pipes according to their plans - plans which the district never challenged. It is therefore not appropriate for any body appointed consequent upon the fact of expropriation to adjudicate those damages.

The critical difference between this case and Maeckelburg is, of course, that McEachern's claim is for statutory taking or other interference, not for damages for trespass, whereas Maeckelburg's claim was for damages for the trespass, not for compensation for the subsequent expropriation of the easement.

We think that the central issue before us is whether the non-consensual, ongoing presence of Hydro's works on McEachern's land, without compliance with any statutory formalities for Hydro's taking or interfering with land, is an exercise of its powers under s. 16 (1) of the Hydro Act. It is most compatible with the mandate of the board and the central issue we have identified, that our focus should remain fixed on whether the board has jurisdiction to determine the claim rather than engaging in too close a critique of other remedies McEachern might have pursued. This remains the only question that we must, and are qualified to, answer even if the conduct alleged against Hydro in the Form A might found or be relevant to a trespass action by McEachern against Hydro.

Before answering that central question, however, we will examine and reject four other preliminary branches of attack advanced by Hydro: non-compliance with procedural requirements, waiver, implications for third parties and uncertainty. We will then analyze the allegations in the Form A with reference to the powers in s. 16 (1) of the Hydro Act and the heads of compensation contemplated in s. 16 (8) of the Hydro Act and ss. 30, 33 and 39 of the Act. Finally, our analysis will address the hurdle of whether a de facto taking or other interference compensable under the Hydro Act and the Act could be established on the pleadings in this case. If we accept that it could, then the claim before us will be determinable by the board as a compensation claim for taking or occupation, disturbance damages and injurious affection.

 

6.4 Non-compliance with Procedural Requirements

Hydro emphasizes that expropriating authorities are required to comply strictly when exercising powers of expropriation. It reasons that because the procedural requirements in expropriation legislation are mandatory, there can be no expropriation or other compulsory interference in the absence of procedural compliance. We believe this argument misses the mark in the context of this case by placing undue emphasis on the duty of an expropriating authority to comply with procedural requirements, over the underlying purpose of those requirements which is to protect the rights of those affected by the actions of the expropriating authority. This imbalance becomes apparent when one notes that the decisions relied upon by Hydro all involved actions or appeals by citizens who sought to defeat expropriations. In each case, the reliance on strict statutory interpretation or strict compliance with procedural requirements emanated from a citizen who sought to escape an expropriation or to enforce a greater claim for compensation for expropriation, not from an expropriating authority which sought to escape the procedures for, or consequences of, its own acts of expropriation: Blue Haven Motel Ltd. v. Burnaby (District) (1965), 52 D.L.R. (2d) 464 (B.C.C.A.), The Corporation of the City of New Westminster v. Manuella Brighouse (1982), 20 S.C.R. 520, Costello v. City of Calgary, [1983] 1 S.C.R. 14 and Louise Frechette (School Commission) v. Breton, [1977] 2 S.C.R. 1025.

Only in the case of Purchase v. Terrace (City) (1995), 26 M.P.L.R. (2d) 126 (B.C.S.C.) did a citizen seek strict interpretation of and compliance with expropriation legislation against the expropriating authority in order to uphold and enforce an expropriation of their land, rather than to escape an expropriation. And in that case the court declined to apply the strict compliance principle for that purpose.

We think there is more to be said for the view, expressed in obiter dicta by the Alberta Court of Appeal in Minute Muffler Installations Ltd. v. Minister of Housing and Public Works (1983), 30 L.C.R. 125, that because the procedural formalities of expropriation legislation are enacted for the benefit of the citizen, not a malefacting government, it is questionable whether the board could refuse to take up a claimant's case on the ground of the expropriating authority's non-compliance with a procedural formality in the empowering legislation. To accept Hydro's reasoning would allow Hydro to use its own malfeasance as a springboard out of statutory remedies which are provided for the benefit of claimants.

We do not accept, therefore, that just because Hydro may have a duty of strict compliance when exercising powers under s. 16 of the Hydro Act, its own non-compliance in that regard would bar McEachern from a right he might otherwise have to bring a compensation claim to the board. Still, the qualification that the claimant must be shown to have a right to bring a compensation claim to the board should not be underestimated and takes us back to the heart of the issue in this case: did Hydro exercise its statutory powers under s. 16 of the Hydro Act to take or interfere with the claimant's land, or did Hydro merely act without validly or properly exercising any statutory power to do so? The board does not exist to remedy all legal wrongs or wrongs at large. If we cannot conclude that the facts pled could establish, in law, an expropriation or other statutorily authorized compensable interference, then, even though the claimant may have been wronged by Hydro, the wrong will not be one which we can right, and indeed may only be capable of being remedied by a court.

 

6.5 Waiver

In its written submissions, Hydro has also argued that procedural requirements, except minor technical requirements, cannot be waived by a claimant:

... Where there has been no compliance with a statutory condition precedent (such as getting the approving authority approval for an expropriation or the minister's approval for an entry, possession and use under section 16 (1) (b) of the Hydro Act) the Claimant cannot waive these and claim that he has a right to compensation. This is because there has been no expropriation, or exercise of the powers of entry, possession and use.

The Frechette case underscores that the approach to be taken to procedural formalities must be principled, not merely technical. In Frechette, the claimant had not been formally joined in or notified of the expropriation. Even though the Supreme Court of Canada found for the claimant in holding that by the tendering of payment to her husband the expropriating authority had failed to pay her what she had a right to receive, the court did not find that the expropriation was invalid. Because the claimant in Frechette had been fully informed and involved in the expropriation proceedings, the validity of the expropriation was upheld and objections she might have raised were found to have been waived by her. In light of Frechette, we reject the breadth of Hydro's position on this point, and again prefer to focus on the question of whether Hydro exercised its statutory powers under s. 16 of the Hydro Act to take or interfere with the claimant's land, or merely acted without validly or properly exercising any statutory power to do so.

 

6.6 Implications for Third Parties

Hydro has alluded to a need to join third parties (the claimant's predecessors in title and neighbouring land owners) in a proceeding to establish or its rights to have works on McEachern's land. It has argued that this is one more reason why the board either cannot have jurisdiction over this claim, or should somehow decline jurisdiction over the claim in favour of requiring the parties to resolve their differences in a court action. We note, however, that in Frechette the court was alive to the fact that its ruling had implications for the relationship between the expropriating authority and the claimant's husband to whom the claimant's share of the compensation had been incorrectly paid. The court stated that though the expropriating authority was now bound to make the correct payment to the claimant, it would have a right of action against the husband to recover the payment incorrectly made to him. Applying that reasoning to this case, the fact that Hydro might have private law rights over against third parties would not oust the jurisdiction of the board over a compensation claim between these two parties.

 

6.7 Question of Uncertainty

The McKinnon decision is relied upon by Hydro for the proposition that there can be no compensation awarded in this case because we do not know the exact dimensions of Hydro's intervention with McEachern's land. In McKinnon there was a longstanding dispute between the claimant and the City of Duncan. The City had installed a sewer along the boundary of the claimant's land without his consent and without asking for or obtaining a right of way. An access agreement was subsequently entered into, then allegedly breached by the City. The claimant commenced proceedings in the Supreme Court which resulted in an order restraining the City from entering the land except on terms. The City responded with an expropriation bylaw and the claimant further responded with a compensation claim to the board. It became apparent to the board that the nature and extent of the City's taking had to be determined before there could be an assessment of compensation. After observing that the wording of the expropriation bylaw suffered from serious ambiguities, the board concluded as follows at pp. 53-54:

We must now consider whether the rights of way extend over the whole of Mr. McKinnon's property, or only part of his property. If the extent of the by-law is unclear, and Mr. McKinnon is unable to determine which portions of his property are subject to the by-law, and which portions are not subject to the by-law, then the by-law must be void for uncertainty.

***

If the Expropriation By-law is void for uncertainty then there has been no expropriation and we have no jurisdiction to determine this claim for compensation. The question of validity is therefore fundamental to our jurisdiction to hear the claim for compensation and we clearly have the power to rule on that issue.

... We must be reminded, however, that the parties cannot by consent confer jurisdiction on this board where no jurisdiction exists ... .

***

... From a plain reading of the by-law it is impossible for the owner to identify which of his remaining lands are subject to the right of way.

As we have found the Expropriation By-law is void for uncertainty, we must conclude that there has been no expropriation and, therefore, we are without jurisdiction to award costs.

We do not agree that the finding in McKinnon that there was no jurisdiction because the expropriation bylaw was void for uncertainty, compels a conclusion in this case that because we do not know, at least from the pleadings, the exact dimensions of Hydro's occupancy of McEachern's land, then there can be no taking or occupancy which is compensable under the Act or the Hydro Act. McKinnon dealt with defining an acknowledged intent to exercise powers of expropriation. The board found that it was not possible to establish the extent of the taking from the wording of the instrument of expropriation. This vagueness was held to be fatal to the validity of the instrument and the ability of the board to assess compensation. This case, on the other hand, deals not with interpretation of a statutory instrument, but rather with an alleged de facto taking or occupancy, in circumstances where the physical presence of Hydro's works on McEachern's land is acknowledged and the issue is the legal characterization of their presence. We do not find the aspect of the McKinnon decision relied upon by Hydro to be particularly pertinent to the issue before the board, because at this stage it is enough that Hydro's works are acknowledged to be on the land, without assessing the physical dimensions of the works.

 

6.8 De facto Expropriation or Interference

6.8.1 Section 16 of the Hydro and Power Authority Act

Section 16 (1) explicitly only operates for purposes related to the exercise of Hydro's powers. Hydro's powers are described in s. 12 (1) of the Hydro Act. They are subject to the approval of the Lieutenant Governor in Council and include, in paragraph (a), the power to "distribute and supply power". Hydro does not dispute that its works are on McEachern's property. Since it seems obvious that the line and pole are part of Hydro's power distribution and supply system, we are satisfied that they exist for a purpose related to the exercise of Hydro's s. 12 powers.

The balance of s. 16 provides a context for construing what constitutes an exercise of the powers given in subsection (1). Section 16 (3) requires that "[w]here the authority exercises a power under subsection (1) that does not constitute the expropriation of land requiring approval under the Expropriation Act, it shall obtain the approval of the minister before the power is exercised." McEachern has argued that s. 16 (3) only applies to an exercise of power under s. 16 (1) (d): compelling a person to enter into an agreement to generate or supply power. We do not agree. In our view, Hydro's powers under subsection (1) to take personal property and to interfere with land or personal property in a manner short of expropriation also do not constitute an expropriation of land requiring approval under the Act, and therefore are also intended to require the approval of the minister under subsection (3).

With respect to the power to take personal property, s. 16 (4) creates an additional requirement for Hydro to notify the attorney general, and subsections (5), (6) and (7) dictate a mechanism for vesting of the property taken. The power to take personal property need not be considered further because only powers to expropriate or interfere with land are in issue in this case.

Subsection (8) creates rights of compensation for the exercise of powers under subsection (1) other than in relation to the expropriation of land. Included is a right to compensation for "damages to any property that directly result from the expropriation, entry or use". Subsection (9) provides that, failing agreement, the compensation payable shall be determined by the board.

The distinction between paragraphs (a) and (b) of s. 16 (1) is that the power to expropriate given in paragraph (a) is both an absolute and permanent taking of rights, whereas the power given in paragraph (b) to "enter, remain on, take possession of and use any property" is intended to be less enduring than the power to expropriate, though apparently not as transitory as the types of interference contemplated by s. 41 of the Hydro Act. The question remains whether Hydro has exercised its powers under paragraph (a) or (b) in relation to the claimant's land. We will examine that question first for takings, then for other forms of interference.

6.8.2 De facto Expropriation

Our Court of Appeal described the concept of expropriation in the case of A.L.M. Investments Ltd. v. Strata Plan NW 2320 (Owners) (1989), 42 L.C.R. 269 at 271:

A fair, large and liberal interpretation of the term "expropriation" is any kind of compulsory taking of title to land authorized by law. The essential concept is compulsory transfer or vesting of title to land from one party to another. Such was the result of the court order made pursuant to the application of the developers under the Property Law Act. A lawfully sanctioned encroachment of a permanent nature amounts to a compulsory taking or expropriation of land in the same sense as a government expropriation.

While accepting the court's approach in A.L.M., we also agree with the board's conclusion in the B.C. Gas case that vesting of actual title in the taker is not an immutable aspect of the expropriation concept. In B.C. Gas, the board held that permanent encroachment on the claimant's land by the gas company under powers of expropriation in the Pipeline Act was an expropriation as defined in s. 1 of the Act, even though procedures peculiar to the Pipeline Act prevented title from vesting in the gas company until after the determination of compensation. A similar approach appears to have been endorsed by the Supreme Court of Canada in Manitoba Fisheries v. The Queen, [1971] S.C.R. 101 and The Queen (British Columbia) v. Tener, [1985] 1 S.C.R. 533, 32 L.C.R. 340 where a "taking" was not precluded by the parties' retention of ownership of their physical assets. We therefore agree with McEachern that a right to compensation, determinable by the board under the Act, can arise where an expropriating authority has taken land without the consent of the owner and without complying with formal procedures for expropriation.

Our reading of the cases also leads us to observe, however, that the right in issue, whether it be a fee simple interest or something less such as a temporary right of way, must be completely and absolutely denied, at law, within the context concerned. For example, in the Purchase case the City of Terrace wrote to Purchase stating that its council had instructed its administrators to secure a right-of-way over Purchase's land utilizing the procedures under the Act. The council later changed its mind and resolved not to consider the introduction of an expropriation bylaw. In the meantime, it had issued a highway use permit for the hauling of logs on city streets which abutted, but were not on, Purchase's land. In these circumstances Dorgan J. found there was no de facto expropriation because there had been no taking, entry or encroachment by the City of Terrace onto Purchase's land. She also found that the City of Terrace's earlier expressed intention to expropriate was not an expropriation notice under s. 6 of the Act, and described the limits of de facto expropriation as follows at p. 144:

Expropriation is an extraordinary power. It is a creature of statute. De facto expropriation in Tener, Casamiro, B.C. Gas, A.L.M. Investments, and the like, is only declared when there has been an action which effectively takes away the claimant's only or principle [sic] interest in the land, to the benefit of the taker. In Tener and Casamiro the claimants' only interest in the land were [sic] their use of their mineral claims; these were effectively denied. In B.C. Gas and A.L.M. Investments there was actual and permanent encroachment on the claimant's [sic] land. The facts in this case cannot be likened to those. As expropriation is an extraordinary power, only to be allowed under stringent conditions to protect the property rights of land owners, so too is the power in a Court to declare de facto expropriation an extraordinary power, only to be used when there has been a complete denial or invasion of a land owner's property interests and/or rights.

This brings us to McEachern's invocation of the de facto expropriation principle applied in Tener and Casamiro Resource Corp. v. British Columbia (Attorney General) (1991), 55 B.C.L.R. (2d) 346, 45 L.C.R. 16 (B.C.C.A.). Those cases involved interpretation of the legal effect of a legislative act. In Casamiro, it was an order-in-council made under environment and land use legislation. In Tener, it was a notice of permanent refusal to issue a use permit under legislation which required a permit from the minister before natural resources could be exploited in a park. At L.C.R. 349, the majority in Tener proceeded on the assumption that a permit was necessary for the Teners to lawfully remove minerals from their lands and considered that the denial of the permit triggered prohibitions in the statute preventing the Teners from exploiting their mineral property rights. Thus, in both Tener and Casamiro legislative action resulted in the permanent and complete denial of property rights.

Hydro's arguments in this case, though not always expressed in this way, are most effectively directed in our view to the point that Tener and Casamiro are not applicable because they turned on the legal effect of legislative acts. Thus, when Southin J.A. made the following statement in Casamiro at L.C.R. 169, the act she was referring to was a legislative act in the form of an order-in-council, not physical conduct by the authority:

The fact that the Lieutenant-Governor in Council does not call this act an expropriation and has not followed the procedures laid down in the Expropriation Act, does not deprive the owner of the rights given to the owner by s. 9 and following of the Expropriation Act.

Here, in contrast, it is the legal effect of the presence of Hydro's works on McEachern's land that is at stake, rather than the legal effect of a statute, bylaw, regulation, order or statutory decision such as the refusal of a park use permit in Tener.

Casamiro and Tener both also applied the interpretive principle that a statute which encroaches on a citizen's rights is subject to strict construction, with one adjunct to that principle being a presumption that proprietary rights are not intended to be taken away by statute without provision being made for compensation. This was recognized by Southin J.A. in Casamiro at 45 L.C.R. 168-170. McEachern's argument would require that accepted presumption to be extended to a new presumption that proprietary rights are not taken away or interfered with by the conduct of an expropriating authority, as a matter of law, without de facto exercise of its statutory powers to expropriate or otherwise interfere with property rights. For reasons that follow, we have decided that this extension of the accepted interpretive presumption is not supportable. The words of Southin J.A in Casamiro at L.C.R. 170, have reinforced our thinking:

The diminution of rights does not always amount to a taking which, as a matter of law, is equivalent to expropriation. Whether in any given case the acts done by the government are so equivalent is a question of mixed fact and law. Here, as I have already said, the grants have been turned into meaningless pieces of paper. By legislative act they could be turned back into pieces of paper with meaning but no such legislative act has occurred.

An earlier obiter remark in Casamiro, at L.C.R. 169, also reflected this view that every interference with or diminution of property rights by an authority with powers of expropriation will not be, in law, an exercise of those powers. At the hearing of the Casamiro appeal, counsel were apparently questioned by the court about the validity of the order-in-council. Because both sides asserted that it was valid, the court proceeded on that assumption; not, however, before Southin J.A. remarked that she inferred that Casamiro's concession of the validity of the order-in-council was because if it was not valid, "no rights have yet been taken and there would be no foundation for the assertion of a Tener right".

Returning to the Tener case, at L.C.R. 362, Wilson J., speaking for the minority, concluded that permanent denial of the park use permit was an expropriation, describing "expropriation" in terms of an absolute denial of the Teners' right to go on the land and sever the minerals. Estey J., speaking for the majority, used comparable language in passages at L.C.R. 350-351:

... The denial of access to these lands occurred under the Park Act and amounts to a recovery by the Crown of part of the right granted to the respondents in 1937. This acquisition by the Crown constitutes a taking from which compensation must flow.

***

... the respondents are left with the minerals. The value of the minerals in such a state depends upon one's assessment of the chances of a reversal of executive policy in the issuance of a removal permit under the Park Act.

***

... The notice of 1978 clearly took value from the respondents and added value to the park. The taker, the government of the province, clearly did so in exercise of its valid authority to govern ... .The notice of 1978 was an expropriation and, in my view, the rest is part of the compensation assessment process.

We have decided that the reasoning in Tener, Casamiro and B.C. Gas cannot be applied to the same effect in this case. Where, as here, Hydro has taken no lawful steps to effect a taking of McEachern's land under s. 16 (1) (a) of the Hydro Act, then the denial of his rights is not absolute or permanent in the sense used in Tener, Casamiro, B.C. Gas and Purchase. McEachern argues that the presence of Hydro's works defeat his property interest because without use of the land occupied by the works he cannot enjoy it. The answer is that his use or enjoyment has not been absolutely denied, as a matter of law, so long as he is legally entitled to claim the land as his own and pursue the removal of the offending works, as is so here.

To conclude, the presence of Hydro's pole and lines on McEachern's land is not an expropriation because, as a matter of law, there has been no exercise of a power of expropriation under s. 16 (1) (a) of the Hydro Act. To the extent that Hydro has acted to unlawfully occupy McEachern's land, his remedy is to commence an action to recover damages and restrain or remove Hydro's works, not a compensation claim to the board.

6.8.3 De facto Interference

We have determined, from Tener, Casamiro, B.C. Gas and Purchase, that there has been no de facto expropriation of McEachern's land because there has been no taking in a legal sense. It also follows from our interpretation of s. 16 of the Hydro Act that we do not accept the claimant's argument that the powers of entry, occupation, possession or use in s. 16 (1) (b) are necessarily powers of expropriation. We consider them to be lesser or different powers of interference than powers for the expropriation of real property, though still absolute within their more limited scope.

Does the reasoning we applied to de facto expropriation apply to de facto interference short of expropriation and, if so, could the facts pled by the claimant establish interference with his land which is lawful by reason of s. 16 (1) (b) of the Hydro Act? The nub of the problem is whether Hydro has exercised its power under s. 16 (1) (b) of the Hydro Act when it has never obtained, or purported to obtain, the approval of the minister which s. 16 (3) requires it to have "before the power is exercised".

Hydro says that no statutory power relating to entry, possession and use has been exercised, and that the mere existence of the power in s. 16 (1) (b) does not amount to its valid exercise. It cites an extract from Fridman in the Law of Torts in Canada, Vol. 1 (Toronto: Carswell, 1989) at p. 35 to the effect that an authority can be held liable in trespass where it possesses, but fails to meet the requirements of, a statutory provision which would render the trespass lawful. Both the extract and Hydro's submission acknowledge that Hydro would not be able to rely upon its statutory powers of expropriation or other interference as a defence to such a trespass action.

Hydro also relies upon the Horton decision of the B.C. Supreme Court for the proposition that no valid expropriation takes place if an expropriating authority does not comply with a condition precedent in the Act (in that case, ss. 6 (1) (a) (i) and 48 of the Act relating to service of an expropriation notice on the owner). It then draws a parallel between the minister's approval under s. 16 (3) of the Hydro Act and an approving authority's approval under s. 17 of the Act, and says that both are mandatory conditions precedent to the valid exercise of the associated statutory powers to interfere with property. Hydro says the Court of Appeal's decision in Seaside Acres Ltd. v. Pacific Coast Energy Corp, (1994), 52 L.C.R. 106 supports its position because the court recognized the importance of the approving authority's role for non-linear developments and confirmed that the legislature has also seen fit to provide a role for the approving authority in the case of linear developments.

In Horton, McColl J. declared an expropriation for a linear development to be a nullity and the authority's entry on Horton's lands to be a trespass because it had failed to wait out the 14 day deemed service period for the expropriation notice under ss. 6 and 48 of the Act, before getting approval of the expropriation under s. 17 of the Act. In Seaside, the Court of Appeal considered Horton and held that for a linear development it was permissible to approve the expropriation under s. 17 (2) before the expiry of the deemed time for service of the expropriation notice under ss. 6 and 48 of the Act. We therefore agree with McEachern that Seaside overruled Horton insofar as it had held otherwise on this point.

In our view, Seaside does not resolve whether Hydro has exercised a power under s. 16 (1) (b) of the Hydro Act. For one thing, Seaside is quite different factually. Here Hydro demonstrated no intention to exercise a power under s. 16 (1) (b) of the Hydro Act, whereas in Seaside the authority unequivocally exhibited its intention to exercise its statutory power of expropriation by serving an expropriation notice, getting the minister's approval and filing a vesting notice. Thus, in Seaside actions were clearly taken to exercise the power of expropriation, whereas in this case the mere presence of Hydro's works on McEachern's land, without more, is more consistent with an unlawful interference than with the lawful exercise of a power under s. 16 (1) (b) of the Hydro Act requiring the prior approval of the minister.

Secondly, in Seaside the court found that the taking was lawful because the steps taken to effect it had complied with the requirements of the Act. Seaside is therefore more like Tener and Casamiro than this case where, if power under s. 16 (1) (b) was exercised by Hydro, it was done in a manner manifestly not in compliance with s. 16 (3) of the Hydro Act.

Thirdly, the legislative provisions in the two cases are significantly different. In Seaside, the court found that both the wording and context of the Act permits the approval of an expropriation for a linear development to be sought at any time after the expropriation notice has been filed in the land title office. In this case, the Hydro Act contemplates a spectrum of actions and procedures which, depending upon the seriousness of the impact concerned, will trigger the lawful exercise of the powers of expropriation or other interference in ss. 16 (1) and 41 (1) of the Hydro Act. At the more procedurally rigorous end of the scale, s. 16 (2) imposes the procedural protections in the Act when land is expropriated under s. 16 (1) (a). In the middle ground, s. 16 (3) expressly requires Hydro to obtain the minister's approval before a power of interference is exercised that does not constitute the expropriation of land requiring approval under the Act. At the less procedurally rigorous end of the scale, s. 41, under which no claim has been made in this case, spells out a more limited power of entry the exercise of which does not require prior or any approval from the minister, with compensation for damages determinable by the board in a procedure parallel to s. 16 (9) of the Hydro Act. Thus only the power of entry in s. 41 of the Hydro Act is exercisable on the basis of acts of interference alone, absent any prior steps for approval, notice or vesting.

We conclude that the presence of Hydro's pole and lines on McEachern's land is not an interference the compensation for which is determinable by the board under s. 16 (8) and (9) of the Hydro Act, because as a matter of law there has been no exercise of a power of interference under s. 16 (1) (b). To the extent that Hydro has acted to unlawfully interfere with McEachern's land, short of expropriation, his remedy is to commence an action to recover damages and restrain or remove Hydro's works, not a compensation claim to the board.

 

7.0 DETERMINATION AND ORDER

The compensation claim for the value of land taken or occupied, injurious affection to the remainder, disturbance damages and interest, is dismissed on the ground that there has been no lawful taking or other interference under s. 16 of the Hydro Act. Costs may be spoken to at the instance of the parties.

 

 

Government of British Columbia