June 2, 2000,   E.C.B. No. 34/91/185 (70 L.C.R. 29)

REASONS FOR DECISION

1.  APPLICATION

[1] By notice of motion filed on April 11, 2000, the respondent, Her Majesty the Queen in Right of the Province of British Columbia, has applied to the board for the following orders:

(1) That the compensation claim of the claimant, Reon Management Services Inc., as set out in its Form A application for determination of compensation filed on July 11, 1991, is settled as between the claimant and the respondent on the terms set out in a letter of counsel for the respondent dated April 6, 2000; and

(2) That in the absence of specific agreement between the parties, interest pursuant to subsection 46(4) of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Act"), is not payable on settlements of claims made pursuant to the Act.

[2] This unusual application raises the threshold question of the board's jurisdiction to determine whether a compensation claim has been settled and, if so, on what terms, where both parties say there has been a settlement but hold differing views as to what the settlement comprises. The claimant contends that the board is without jurisdiction in the matter while the respondent argues to the contrary.

[3] I heard this application alone in Kamloops, B.C. on April 18, 2000, in my capacity as chair of the board and in exercising the powers and jurisdiction of the board pursuant to section 26(5) of the Act. After receiving initial submissions with respect to the board's jurisdiction, I decided to hear the respondent's motion, reserving until later on the threshold jurisdictional issue. The hearing of the motion occupied the rest of the day. It was largely concerned with evidence and argument around the settlement negotiations between counsel for the parties. Fran Crowhurst, counsel for the respondent throughout these negotiations, testified as to her role and was cross-examined at length by the claimant's counsel, Reinhard Burke. For that reason Ms. Crowhurst's colleague, Alan Hincks, acted as respondent's counsel on this application. At the conclusion of the hearing, I reserved my decision on the respondent's motion. I also requested counsel to look further into the jurisdictional issue and provide me, if possible, with any additional authority on point. Mr. Hincks responded with supplementary written submissions which were filed with the board on April 28, 2000.

2.  BACKGROUND

[4] The compensation claim in this matter arose as a result of the expropriation by the respondent of a portion of the claimant's lands located within the City of Kamloops for the purpose of widening and improving the Yellowhead Highway. Although the pleadings filed by the parties reveal a dispute as to the actual date of expropriation, the purported settlement proceeded on the basis that the taking took place on August 3, 1990. The parties also disagreed as to whether an advance payment pursuant to what is now section 20 of the Act had been made, but again, the purported settlement proceeded on the basis that the claimant had not received any compensation for the taking to date.

[5] It is unnecessary for the purposes of this decision to trace the history of the claim over roughly the next nine and a half years, except to point out that most recently a compensation hearing was scheduled to be held in Kamloops beginning on April 10, 2000, and was set for nine consecutive hearing days.

[6] Toward the end of March, 2000, as the hearing date approached, the parties began negotiations aimed at settling the compensation claim. There were several exchanges of correspondence between counsel commencing with an offer to settle made by the respondent on March 29, 2000, which the claimant rejected, and culminating in an offer to settle made by the claimant on April 6, 2000, which the respondent accepted in a letter of same date. However, at this point, interpretive differences arose over one of the terms of the purported settlement which required the respondent to pay interest on the agreed amount of compensation pursuant to section 46 of the Act. The respondent took the position that it was only required to pay what might be termed ordinary interest under subsection 46(1) while the claimant said the respondent was required to pay not only ordinary interest but also additional interest under subsection 46(4). Further exchanges of correspondence on the question followed on April 6, 7, and 10, 2000.

[7] On the morning of April 7, 2000, counsel for the parties were before me in a brief teleconference hearing convened to settle an earlier order which I had made. At that time Ms. Crowhurst advised that at the outset of the compensation hearing in Kamloops on April 10th, the respondent would be making a preliminary argument that the matter had been settled and would be asking for a ruling from the hearing panel as to whether or not the matter had been settled and as to the terms of the settlement. Although Mr. Burke for the claimant did not state a position at that time, he wrote to the board via fax on the afternoon of April 7th as follows:

"Earlier today Ms. Crowhurst advised you that the respondent takes the position that the parties have settled this claim.

The claimant agrees that its claim has been settled.

If the parties cannot agree on costs, that claim will be referred to you for determination."

Based on the foregoing advice from counsel, the board promptly cancelled its booking arrangements for the compensation hearing in Kamloops and adjourned the hearing. The respondent, however, continued to seek a ruling from the board on the question of settlement which has resulted in the present application.

[8] At the hearing of this application, I was made privy to all of the correspondence and other communications which flowed between counsel setting out in detail the proposed terms of the various offers to settle and the responses to those offers. For that reason, I indicated my intention to disqualify myself for the future from adjudicating the claimant's compensation claim if it were determined that the claim had not been settled and the parties thereafter proceeded to a hearing. I also do not intend to set out the monetary terms of any of the offers, including the claimant's offer of April 6, 2000, which purportedly resulted in a settlement of the claim, since disclosing such details here could arguably prejudice the fair hearing of any subsequent compensation proceeding.

3.  THE ISSUES

[9] The issues for determination on this application are as follows:

(1) Does the board have jurisdiction to determine the respondent's motion regarding settlement?

(2) If the answer to the first issue is "yes", then has there been a settlement of the claimant's compensation claim?

(3) If the answer to the second issue is "yes", then what are the terms of the settlement insofar as they relate to the payment of interest pursuant to section 46 of the Act?

(4) In the absence of specific agreement between the parties, is interest pursuant to subsection 46(4) of the Act payable on settlements of claims made pursuant to the Act?

4.  DOES THE BOARD HAVE JURISDICTION?

4.1  Positions of the Parties

[10] The claimant takes the position that, where both parties have advised the board unequivocally that the claim has been settled, the board has no jurisdiction to go behind what it has been told and adjudicate on the settlement. As Mr. Burke expressed it, my opinion as to whether there has, in fact, been a settlement or as to its terms is irrelevant. There is, he pointed out, no express provision within the Act which would confer jurisdiction on the board to intervene in this way and the board does not have inherent jurisdiction to make what amount to declarations of the nature sought in the respondent's motion. Instead, the proper forum for hearing such an application is the Supreme Court of British Columbia. Indeed, two days after the hearing of this application, the claimant on April 20, 2000, commenced an action in the Supreme Court seeking, among other things, a declaration that a binding settlement was achieved on April 6, 2000 on the terms contained in the claimant's written offer of that date, a declaration that interest payable on the settlement includes interest pursuant to subsection 46(1) and subsection 46(4) of the Act, and damages for breach of the settlement.

[11] The respondent says the board's jurisdiction to make the orders sought can be ascertained from the Act itself, from board and court decisions regarding questions of jurisdiction, and from subsection 27(2) of the Interpretation Act, R.S.B.C. 1996, c. 238. In the respondent's submission, the starting point for determining this matter is section 26 of the Act, wherein the board is given the jurisdiction and the statutory duty to determine a claim for compensation arising out of an expropriation. The respondent points out that the board and the courts have ruled that, before embarking on the exercise of powers pursuant to the Act, the board must satisfy itself on preliminary or collateral matters. One of these is an inquiry into whether or not there are any issues in dispute between the parties. This inquiry necessarily includes a finding as to whether a settlement has been reached and the terms of any such settlement. The respondent submits that the absence of a specific statutory provision that sets out the power to determine settlement issues is not fatal to the board's jurisdiction since, it says, jurisdiction extends to matters that are fundamental to the board's role in determining compensation and to matters incidental and ancillary that arise in the course of a determination. In the respondent's view, the fact that the claimant has commenced proceedings in the Supreme Court does not affect the board's jurisdiction to adjudicate on the issues before it on this application.

4.2  Analysis and Conclusion

[12] Neither counsel was able to locate and provide to me any case authority outside the board's own jurisprudence on the question of whether the board has jurisdiction to determine if a binding settlement has taken place. My own researches have similarly failed to produce any such authority.

[13] There have been at least two prior instances in which the board has made a finding of fact as to whether a settlement has occurred and two others in which the board has interpreted the language set out in a settlement agreement with respect to payment of interest.

[14] In Abma v. British Columbia (Minister of Transportation and Highways) (1994), 53 L.C.R. 158, the former chair of the board on a contested motion dismissed the claimant's application for an advance cost review pursuant to what is now section 48 of the Act. In earlier proceedings before the chair, claimant's counsel, Mr. Burke, had agreed to withdraw his client's application if the respondent paid his legal account at a specified hourly rate. The respondent subsequently did so, but Mr. Burke advised that his client had changed his mind and was no longer willing to withdraw the application. The chair said she was satisfied that the matter had been settled by the parties according to conditions advanced by claimant's counsel and met by the respondent.

[15] In Harshenin v. British Columbia (Minister of Transportation and Highways) (1999), 68 L.C.R. 137, the parties, just prior to the scheduled compensation hearing, executed a partial release of claim and a consent dismissal order. The compensation hearing was to proceed only on the unresolved heads of the claim. However, there were acknowledged errors in the initial settlement documents. At the hearing, the claimant expressed a reluctance to sign new and corrected documents and the parties also appeared to disagree somewhat on the scope of the settlement. In my reasons for decision following the compensation hearing, I stated as follows, at p. 143:

In these circumstances, I consider it necessary to set out my view with respect to the settlement. I find as a fact that the parties did reach a binding settlement of all claims in dispute in this matter, except those which are expressly excluded in the partial release of claim.

[16] Even in cases where the parties acknowledge that there has been a settlement, but disagree as to the interpretation of a specific term, the board has made a determination with respect to that term. In Richland Farms Ltd. v. British Columbia (Ministry of Transportation and Highways) (1991), 46 L.C.R. 66, the parties reached a settlement just as the compensation hearing was to begin. A consent order, approved and signed by both counsel, filed with the board, endorsed by the chair and entered, provided for the respondent to pay the sum of $700,000 plus costs and "interest pursuant to s. 45 [now section 46] of the Expropriation Act." While payment of interest pursuant to subsection 45(1) had been resolved, additional interest pursuant to subsection 45(4) remained an issue which was remitted to the board for an order. The chair found that the consent order was binding on the parties and had the same force and effect as if it were an award following a full hearing before the board. Having so decided, the chair also found in the circumstances of that case that interest was payable pursuant to subsection 45(4).

[17] In Wu v. British Columbia (Minister of Transportation and Highways) (1999), 68 L.C.R. 73, the respondent offered to settle the claimant's claim for a specified amount above the advance payment, plus interest under subsection 46(1), plus costs. The claimant accepted the offer on three conditions, one of which was that the claimant be at liberty to apply to the board for an order that she was also entitled to additional interest under subsection 46(4). The respondent accepted all three conditions, whereupon the claimant signed a release of claims except for interest under subsection 46(4) and costs to pursue the claim for additional interest. The parties also executed a consent dismissal order which was filed with the board, endorsed by the chair and entered. Subsequently, the claimant brought an application seeking an order that she was entitled to additional interest under the settlement. The vice-chair found in these circumstances that no interest was payable pursuant to subsection 46(4).

[18] The determination of the existence of a settlement, and its terms, is an adjudication of the binding force of a contract between the parties. In Golden Valley Golf Course Ltd. v. British Columbia (Minister of Transportation and Highways) (1998), 65 L.C.R. 151, the board ruled on contractual issues between the parties. The respondent in that case made an advance payment to the claimant after negotiating an agreement which provided that the value of the land would be determined pursuant to the Act. As part of the agreement the respondent obtained a mortgage from the claimant to secure any anticipated overpayment. The claimant, rather than proceeding to a compensation hearing, filed with the board a notice of discontinuance of its claim. The respondent applied to the board for an order that the amount of compensation be decided by the board notwithstanding the notice of discontinuance. The board granted the respondent's application, noting as follows at p. 160:

In the present situation Golden Valley made an agreement with the respondent MoTH which contemplated that the amount of the compensation would be determined by this board. MoTH relied on that agreement and it would now be unfair and unjust to allow Golden Valley to breach its agreement by discontinuing the claim.

[19] In Golden Valley the board found that it had jurisdiction to refuse to accept a discontinuance. It should be noted that the board's decision is under appeal to the British Columbia Court of Appeal and that at least one of the grounds upon which leave to appeal has been granted is that the board erred in finding that it had jurisdiction to rule on an alleged breach of contract.

[20] None of the other decisions cited above expressly addresses the question of the board's jurisdiction to adjudicate on settlement issues. Neither does the Act expressly confer on the board the jurisdiction to deal with the question of settlement. Nevertheless, it seems to me that the case for finding in favour of jurisdiction in these circumstances is compelling.

[21] The Supreme Court of British Columbia in Whitechapel Estates Ltd. v. British Columbia (Ministry of Transportation and Highways) (1999), 66 L.C.R. 193, has recognized that the Act creates in the board a special forum which, in the absence of agreement, must determine compensation whenever any expropriating authority takes land. As Macdonald J. observed at p. 197, "exclusive jurisdiction" in this regard is given to the board.

[22] Since, as the respondent points out, the board is not in the business of resolving moot issues, the board must therefore ascertain certain threshold questions such as whether an expropriation bylaw is valid (see McKinnon v. Duncan (City) (1992), 47 L.C.R. 47 (B.C.E.C.B.)), whether there has been an expropriation (see White v. Prince George (City) (1993), 50 L.C.R. 260 (B.C.E.C.B.); McEachern v. British Columbia Hydro and Power Authority (1997), 60 L.C.R. 186 (B.C.E.C.B.); Richmond (City) v. British Columbia (Expropriation Compensation Board) (1997), 61 L.C.R. 83 (B.C.S.C.)), or whether limitation periods apply (see Haughton v. Heffley Creek (Waterworks District) (1999), 66 L.C.R. 1 (B.C.E.C.B.)).

[23] Similarly, the board cannot perform its statutory duty without first inquiring as to what issues require determination. Where the matter is in doubt, this includes deciding, as in Abma and Harshenin, whether a settlement has been reached. It extends to deciding, upon application as in Richland Farms and Wu, where there has been a settlement agreement but the parties disagree on the application of the Act to certain of its terms for compensation, what construction is to be put upon those terms.

[24] I agree with the respondent that the board does not have inherent jurisdiction like the Supreme Court to make declarations, but it does have the power to make orders, decisions and determinations. It is not declaratory relief which the respondent seeks. The fact that the claimant has commenced proceedings in the Supreme Court, suing on the purported settlement, does not, in my opinion, oust the jurisdiction of the board.

[25] Support for the board's implied jurisdiction in this matter can be found both at common law and in statute. It is an established principle of common law, recognized in decisions of the Supreme Court of Canada, that the powers conferred by an enabling statute include not only those which are expressly granted but extend, by implication, to incidental and ancillary matters which are reasonably necessary for the accomplishment of statutory objectives: see Whitechapel Estates Ltd. v. British Columbia (Ministry of Transportation and Highways South Coast Region) (1994), 54 L.C.R. 306 (B.C.E.C.B.), and the cases cited therein.

[26] Section 27(2) of the Interpretation Act would appear to be a codification of the common law rule of statutory interpretation. It provides:

27 (2)

If in an enactment power is given to a person to do or enforce the doing of an act or thing, all the powers that are necessary to enable the person to do or enforce the doing of the act or thing are also deemed to be given.

[27] From all of the foregoing, I conclude that the board has jurisdiction to determine whether there has been a settlement of the claimant's claim for compensation and, if so, on what terms.

5.  HAS THERE BEEN A SETTLEMENT?

[28] Although both parties have told the board that they have settled the claimant's compensation claim, it is manifest in their correspondence and submissions that they disagree on the interpretation of at least one of the terms of settlement, namely the payment of interest. In these circumstances, it seems to me that it is therefore open to the board to find that there has not, in fact, been a binding settlement and that the matter of compensation should be remitted to the board for determination.

[29] In order to find that there has been a settlement of the claimant's claims, it has to be proven that there was a mutual intent to create a legally binding agreement and that the parties reached agreement on all essential terms through a final and unqualified expression of assent. The principle was long ago stated in the House of Lords in the case of Rossiter v. Miller (1878), 3 App. Cas. 1124, [1874-80] All E.R. 465, as follows:

... it is a necessary part of the appellants' case to show that the two parties had come to a final and complete agreement, for, if not, there was no contract. So long as they are only in negotiation, either party may retract, and, although the parties may have agreed on all the cardinal points of the intended agreement, yet, if some particulars essential to it still remain to be settled afterwards, there is no contract ...

That principle was restated and adopted in a recent judgment of the Nova Scotia Court of Appeal in Sinanan v. Woodyer [1999] N.S.J. No. 166, a case cited by the respondent, which discusses at length the essential terms of offer and acceptance in order to determine whether the parties there had reached a settlement of their lawsuit.

[30] In light of the above, I turn now to a review of the faxed correspondence between counsel for the claimant and the respondent on April 6, 2000, which purportedly produced a settlement of the claim (deleting, as I indicated earlier, any reference to the monetary amounts involved).

[31] On April 6, 2000, at 11:30 a.m., Mr. Burke for the claimant wrote to Ms. Crowhurst for the respondent as follows:

"I confirm that I have received instructions from my client to offer to settle this claim as follows:

1. Your client would pay $[...] in compensation to the claimant measured as of August 3, 1990. The sum would be "new" money as Reon has not received any compensation for the taking to date.

2. Your client would pay interest on the $[...] pursuant to s. 46 of the Act.

3. Your client would pay Reon's costs pursuant to s. 45 of the Act. If the parties cannot agree on the amount of costs, the Chair or Vice-Chair would determine costs pursuant to the Act.

4. The Board would be advised that the claim has been settled.

5. A consent order would be signed dismissing Reon's claim.

This offer is open for acceptance until 4:00 p.m. today."

[32] Ms. Crowhurst replied to Mr. Burke in a letter of same date some time between l:30 and 2:30 p.m. as follows:

"I am writing further to your letter of today's date setting out your offer to settle and advise that I am instructed to accept the offer contained therein. I have attached the interest calculation from August 3, 1990 to April 7, 2000 on $[...]. The total amount payable by MoTH, exclusive of costs, will be $[...].

I will leave it to you to advise the Expropriation Compensation Board of the settlement. I will attend to drawing up the settlement documents and will forward them to you when I receive the settlement funds from the Ministry of Transportation and Highways which I anticipate to be within the next two weeks."

[33] It is, of course, these two letters which the parties say constituted the offer and acceptance creating a binding settlement of all the claimant's claims except for costs. However, further faxed correspondence followed in the course of April 6, 7, and 10, 2000, to which I consider reference should also be made.

[34] At 3:27 p.m. on April 6th, Mr. Burke wrote to Ms. Crowhurst:

"Thank you for your letter of April 6, 2000.

My client's offer to settle was intended to include interest under ss.46(1) and 46(4) of the Expropriation Act. Your letter of acceptance suggests that you did not construe the offer in this way.

Unless the interest to be paid by your client includes interest under s.46(4) of the Act, there is no settlement.

Please let us know your client's position."

[35] In response, Ms. Crowhurst sent the following letter to Mr. Burke at approximately 4:30 p.m. that day:

"I am writing further to your letter of today's date, received by me at 3:27 p.m. via facsimile, and to your voice mail message left at 3:08 p.m. today.

In the latter you indicated that this matter has been settled. The Respondent Ministry considers that this matter has been settled on the terms set out in my letter of earlier today. The Ministry's position is that section 46(4) interest is not payable on negotiated settlements. This is, of course, consistent with E.C.B. rulings and the Act's wording. Therefore, the amount of $[...] (exclusive of costs) is the amount of the settlement.

Absent confirmation from you that you agree with the above, the Ministry will assume that you will be proceeding with the compensation hearing on April 10, 2000."

[36] I have already discussed what transpired before the board the next morning, April 7, 2000, and have recited the letter from Mr. Burke to the board that afternoon confirming settlement of the claimant's claim. The letter was faxed to the board at 3:02 p.m. and was evidently also faxed to Ms. Crowhurst. A further letter from claimant's counsel to respondent's counsel followed at 3:38 p.m. It stated:

"Earlier today, you advised the Chair that the respondent took the position that this claim had been settled. We have now also advised the Chair that the claim has been settled.

The calculation of interest to be paid as set out in your letter of April 6, 2000 is incorrect. The settlement obligates your client to pay interest pursuant to s.46, which includes s.46(1) and s.46(4).

We refer you to the decision of the Expropriation Compensation Board in Richland Farms Ltd. v. British Columbia Minister of Transportation and Highways [1991] B.C.E.A. 22. In that case, the Expropriation Compensation Board expressly found that the reference to interest pursuant to s.46 of the Expropriation Act in an order clearly included interest pursuant to s.46(1) and interest pursuant to s.46(4).

Please confirm that you agree that your interest calculation of April 6, 2000 is in error. If you do not acknowledge that your calculation was in error, we have instructions to bring an action on the settlement in the Supreme Court of British Columbia immediately.

We look forward to hearing from you."

[37] Ms. Crowhurst's response on April 10th to the letter of April 7th from Mr. Burke was simply a reiteration of the respondent's position that the matter had been settled on the terms of her letter dated April 6th which included the interest calculations.

[38] In my view, there are two questions which arise from the foregoing correspondence bearing on the issue of whether the parties reached a settlement. The first question is whether the respondent's initial response to the claimant's offer on April 6, 2000, constituted an unqualified acceptance of that offer or was, instead, a counter-offer, notwithstanding that the respondent did not characterize it as such. The second question is whether the exchanges of correspondence which ensued thereafter had the effect of undoing any settlement which might otherwise be said to have been concluded.

[39] The nature and effect of a counter-offer was explored in the Sinanan case. At page 8 of its reasons for judgment, the Nova Scotia Court of Appeal noted the frequent difficulty in determining from the language of a response to an offer whether that response amounts to an acceptance or a new offer. The Court cited the following passage from Professor S.M. Waddams, The Law of Contracts, 3rd ed. (Toronto: Canada Law Book Inc., 1993), at pp. 40-41:

It is rare that a reply to an offer states simply "I accept your offer". If it says less it may not amount to a definite acceptance. If it says more, it may be a rejection. Whenever the offeree adds anything to simple words of acceptance the question arises whether the addition amounts to a departure from the terms of the offer. If so, the offeree has not assented to the offeror's terms. The reply is at most a counter-offer, and a further communication of assent will be required from the offeror. This is not a technical requirement, but simply an aspect of the enquiry into whether the manifestation of mutual assent is complete.

[40] Once a counter-offer has been communicated, it operates like a new offer, destroys and rejects any previous offers unless otherwise noted, and is open for acceptance for a reasonable length of time or until revoked.

[41] In the present instance, respondent's counsel replied to the claimant's offer of April 6, 2000, by saying that she was "instructed to accept the offer contained therein." Ms. Crowhurst then proceeded to indicate that she had attached the interest calculation on the amount of compensation and provided a dollar figure which she said would be the total amount payable by the respondent, exclusive of costs. The single page of detailed calculations attached revealed that interest had been calculated from August 3, 1990 to April 7, 2000 at variable rates consistent with the payment of ordinary interest only, pursuant to subsection 46(1) of the Act.

[42] I find that that there was nothing equivocal or conditional about the letter from respondent's counsel in reply to the offer to settle. Acceptance of the claimant's offer was unqualified. The interest calculations provided do not, in my view, constitute the addition of a new term to the agreement, and the respondent's acceptance was not made subject to the claimant's agreement with those calculations. Indeed, Ms. Crowhurst under cross-examination said the calculations were included merely for clarity. At most they represent the respondent's interpretation of the agreement which the parties made respecting payment of interest. Such interpretation is irrelevant to determining whether there was actually an agreement.

[43] On their face the ensuing exchanges of correspondence appear to cast in some doubt whether the parties subsequently believed they had settled the claimant's claim. Mr. Burke, in his further letter of April 6th, took the position that, unless the interest to be paid by the respondent included interest under subsection 46(4), "there is no settlement". Ms. Crowhurst, in her further letter in reply of that date, referred to the respondent's interpretation of interest payable and said the respondent assumed that, "[a]bsent confirmation from you that you agree with the above", the claimant would be proceeding to a compensation hearing. Ms. Crowhurst testified that by that time she was discussing with her client as one option a "repudiation of the settlement", but that option was not pursued.

[44] While this posturing after the fact clearly reveals a fundamental disagreement between the parties as to how the term of the settlement regarding interest ought to be interpreted and carried out, in my opinion it is equally irrelevant to determining whether a settlement was concluded and does not have the effect of negating an agreement already reached.

[45] Accordingly, I find that a binding settlement of the claimant's claim for compensation, exclusive of costs, was reached through the initial exchange of correspondence between counsel on April 6, 2000.

6.  WHAT WAS THE SETTLEMENT REGARDING INTEREST?

6.1  Interest under Section 46

[46] To say that there has been a binding settlement in this matter begs the question of what are the terms of the settlement insofar as they relate to the matter at issue here, namely the payment of interest pursuant to section 46 of the Act. The relevant portions of that section provide as follows:

46	(1)	The expropriating authority must pay interest on any amount awarded in excess of any amount paid by the expropriating authority under section 20(1) or (12) or otherwise, to be calculated annually, (. . .)
	(2)	Interest is payable at an annual rate that is equal to the prime lending rate of the banker to the government.
	(3)	During the first 6 months of a year, interest must be calculated at the interest rate under subsection (2) as at January 1, and during the last 6 months, interest must be calculated at the interest rate under subsection (2) as at July 1.
	(4)	If the amount of the payment under section 20(1) or (12) or otherwise is less than 90% of the compensation awarded, excluding interest and business loss, the board must order the expropriating authority to pay additional interest, at an annual rate of 5%, on the amount of the difference, calculated from the date that payment is made to the date of the determination of compensation.

[47] The term of the concluded settlement respecting payment of interest is at paragraph 2 of Mr. Burke's letter of April 6, 2000, setting out the claimant's offer, and states:

"2. Your client would pay interest on the $[...] pursuant to section 46 of the Act."

It is obvious from my earlier discussion that the outstanding issue between the parties is whether interest payable includes interest under both subsections 46(1) and 46(4).

6.2 The Claimant's Position

[48] The claimant submits that the accepted offer is unambiguous with respect to the payment of interest. In referring to interest pursuant to section 46, the clear meaning was that interest became payable potentially under each of the two heads set out in that section, namely ordinary interest under subsection (1) and additional interest under subsection (4). Because it was an agreed term for the purposes of settlement that the claimant had received no compensation by way of advance payment under section 20(1) or (12) or otherwise, it follows that the additional interest under subsection 46(4) must be payable.

[49] The claimant says that it was open to the respondent, if in doubt about the meaning of paragraph 2 of the offer, to make a preliminary inquiry of the claimant before accepting the offer. Ms. Crowhurst under cross-examination acknowledged that she had some concerns about what was intended but decided not to pursue any such inquiry.

[50] The claimant relies upon the board's decision in Richland Farms, where one term of the consent order settling that matter provided for payment of interest pursuant to what is now section 46 of the Act without specifying that this term included both ordinary and additional interest. In applying to the board to determine the interest payable on the compensation agreed to, the claimant submitted that the intention of the parties was clearly reflected on the face of the consent order and the board had no alternative but to conclude that this agreement reflected the bargain made. The respondent submitted that interest under subsection 46(4) was not really interest at all but was in the nature of a "penalty" which should not be assessed on a settlement. The board found the term in the consent order to be "free from any ambiguity", that additional interest was not a penalty, and that payment of such interest was mandatory, not discretionary, when the advance payment was less than 90% of the award. After finding that a consent order has the same force and effect as if it were an award following a full hearing before the board, the board determined that the claimant was entitled to additional interest. The claimant in this matter points out that paragraph 2 of the accepted offer is in precisely the same wording as the consent order regarding payment of interest in Richland Farms.

6.3 The Respondent's Position

[51] The respondent submits that the way to resolve this issue is for the board to discover the intention of the parties regarding payment of interest when the offer was made and accepted on April 6, 2000. With respect to intention, the respondent cites the judgment of the Manitoba Court of Appeal in Atomic Interprovincial Transport (Eastern) Ltd. v. Geiger (1987), 45 D.L.R. (4th) 312, wherein the Court, at page 317 of its reasons, referred to the following comment from William M. Gloag, Law of Contract, 2nd ed. (1929), at p. 7:

The judicial task is not to discover the actual intentions of each party: it is to decide what each was reasonably entitled to conclude from the attitude of the other.

[52] The key question before the board, in the respondent's submission, is therefore what, objectively, the claimant was offering under paragraph 2. The respondent points out that there is no evidence in any of the exchanges of correspondence between counsel preceding the offer and acceptance on April 6th of the respondent's willingness to pay interest under subsection 46(4). Moreover, there is no express reference to that subsection in paragraph 2 of the offer. The claimant could have, but did not, make absolutely clear in its offer that payment of interest under subsection 46(4) was part of the proposed settlement. The claimant having failed to do so, the respondent says it was entitled to conclude that claimant's counsel, being an experienced practitioner in the area of expropriation, had taken into account prior board decisions dealing with this question.

[53] According to the respondent, the essential distinction made by the board in Richland Farms and in Wu was that, in the former case, there was a "consent order" setting out the terms of the settlement whereas in the latter case there was a "consent dismissal order" which did not do so. The wording in both subsections 46(1) and (4) makes clear that payment of interest is triggered by an "award" of compensation that is greater than the amount of the advance payment. The board in Richland Farms found that a consent order incorporating the terms of settlement had the same force and effect as an award following a hearing before the board and, because the amount of the advance payment was less than 90% of the amount "awarded" pursuant to the consent order, interest under subsection 46(4) was payable. In Wu, the respondent agreed as part of the settlement to pay interest under subsection 46(1). The board in its decision also took into account evidence indicating that the amount of the advance payment was less than 90% of the amount of compensation agreed to between the parties. However, in deciding that additional interest was not payable, the board made the following distinction, at p. 80:

In this case, although we accept the affidavit evidence of the settlement that had been reached, the consent order itself merely dismisses the claim and does not set out the terms of the settlement. Therefore, unlike Richland Farms, on the face of the consent order there is no "award" for a specified sum to be paid together with interest under section (46). The requirements set out in subsection 46(4) are not present as they were in Richland Farms.

[54] In light of these two decisions, the respondent refers to paragraph 5 of the accepted offer. It states that "a consent order would be signed dismissing Reon's claim". The respondent submits that it was reasonable for Ms. Crowhurst to construe from Mr. Burke's reference to a consent dismissal order in paragraph 5 that the offer did not contemplate payment of additional interest in the absence of express agreement to that effect because of what the board had already decided in Wu.

[55] Mr. Hincks for the respondent argued that I should find that it was an "implied term" of the settlement that the respondent was only required to pay interest pursuant to subsection 46(1) based upon the course of dealings between the parties and their counsel's respective knowledge of the law.

6.4 Analysis and Conclusion

[56] On its face the settlement of the claimant's claim with respect to payment of interest is clear and unambiguous, requiring the respondent to pay interest pursuant to section 46 of the Act. The language used in paragraph 2 of the accepted offer is identical to that used by the parties in their consent order in Richland Farms. It is different from the agreement reached in Wu, where the respondent expressly agreed to pay interest under subsection 46(1) but the question of whether interest was payable under subsection 46(4) was remitted to the board for determination.

[57] The difference in outcome between the two foregoing decisions rested upon a distinction drawn by the board, with reference to the wording of the Act, between a "consent order", which was found to have the force and effect of an "award", and a "consent dismissal order", which did not. As I observed in the course of the hearing, it seems to me that the distinction is one of form rather than substance, inasmuch as in both cases the advance payments fell short of 90% of the agreed amount of compensation, yet in Richland Farms the claimant received additional interest but in Wu the claimant did not. In my view these cases can stand together but there is a further distinction to be made in the present instance. In both Richland Farms and in Wu there was a concluded order before the board, approved and signed by counsel for the parties, endorsed by the chair, and entered. Here, I have no clear indication as to the form of the consent order other than, pursuant to paragraph 5 of the accepted offer, that it will dismiss the claimant's claim. I do have before me the terms of the accepted offer and I consider that it is open to me to decide on that basis what construction is to be put on paragraph 2 regarding interest.

[58] I agree with the respondent's submission that my task in determining whether the settlement reached between the parties included a requirement that the respondent pay additional interest is to ascertain the objective intentions underlying the offer and acceptance, that is to say, what each party was reasonably entitled to conclude from the attitude of the other.

[59] As I have indicated, counsel for the parties never discussed with each other their intentions or expectations regarding payment of interest before a binding settlement was reached. I should, however, point out that in an earlier offer of substantially less compensation made by Ms. Crowhurst on April 5, 2000, the respondent provided a global calculation of interest which was for a substantially greater amount than what would have been called for simply under subsection 46(1). It was, also, for a substantially smaller amount than what would have been payable if interest had been correctly calculated under both subsections 46(1) and 46(4). In fact, as Ms. Crowhurst testified, the calculation was erroneous and, perhaps, on any reasonably prudent review by the claimant or claimant's counsel, would have been recognized to be erroneous. In any case, there was no direct response from the respondent to that offer and I do not regard the offer as having clarified the objective intentions of the parties.

[60] My review of the circumstances surrounding the settlement do not suggest to me that this is a situation which calls for the introduction of an implied term, as submitted by the respondent. The requirements for implying terms into a contract have been discussed both in the Atomic Interprovincial Transport decision of the Manitoba Court of Appeal and in the decision of the British Columbia Court of Appeal in Procan Exploration Co. v. Golder Associates (B.C.C.A.) [1991] B.C.J. No. 2656. With reference both to case authority and commentators on the law of contract, the Court in Procan noted at page 6 of its reasons that a term will not be implied merely because it would have been reasonable to do so or to improve the bargain made between the parties. A term will be implied when it is necessary to give effect to the common intention and when the parties neglected to state something so obvious that the parties must have intended it to form part of their contract. I do not find on the evidence such an obvious oversight to have been present in this matter.

[61] In my view, it was incumbent upon the respondent, having received the offer of April 6, 2000, and being in some doubt as to the meaning of paragraph 2, to satisfy itself by inquiry as to the scope of that term before unequivocally accepting the offer. Instead, as the evidence of Ms. Crowhurst shows, the respondent recognized that it had been Mr. Burke's practice in the past on behalf of clients to assert a claim for additional interest as part of a proposed settlement, but nevertheless confined itself to making certain assumptions and strategizing as to the form of reply.

[62] I conclude that the settlement of this matter proceeded on a clear and unambiguous requirement for the respondent to pay interest to the claimant pursuant to section 46 of the Act, and this requirement encompassed payment of interest under both subsections 46(1) and 46(4).

[63] Accordingly, it follows that the respondent's motion for an order that the matter was settled on the terms set out in the letter of counsel for the respondent dated April 6, 2000, is dismissed insofar as that letter purports to calculate the amount of interest payable. I also dismiss, as both inconsistent with what I have already decided and with the case authority on point, the respondent's motion for an order that, in the absence of specific agreement between the parties, interest pursuant subsection 46(4) is not payable on settlements of claims made pursuant to the Act.