December 27, 1995, E.C.B. No. 14/92/102 (58 L.C.R. 141)

 

Between: George Alec Rogers and
Genevieve Phyllis Fatt
Claimants
And: Her Majesty The Queen in Right of the Province of British Columbia
as represented by the Minister of Transportation and Highways
Respondent
Before: Fiona M. St. Clair, Vice Chair
Appearances: David J. Houston, for the Claimants
Robert J. Musto, for the Respondent

 

1. THE APPLICATION

The respondent, Her Majesty the Queen in Right of the Province of British Columbia as represented by the Minister of Transportation and Highways ("the province"), has made an application under s. 7 of the Expropriation Compensation Board Practice and Procedure Regulation, B.C. Reg. 452/87, and s. 24 of the Expropriation Act, S.B.C. 1987, c. 23, (the "Act") for an order dismissing certain portions of the relief sought by George Alec Rogers and Genevieve Phyllis Fatt, the claimants, on the basis that the claims are statute-barred because they were made outside the limitation period set by s. 24. The province also seeks an order striking out those portions of the application for determination of compensation that set out that part of the claim, as disclosing no reasonable cause of action. As vice chair of the Expropriation Compensation Board, I heard this application under s. 25 (5) of the Act, which provides that the chair and vice chair each have and may exercise the powers and jurisdiction of the board.

 

2. BACKGROUND

None of the background facts to this application are in dispute. The province began the first of two expropriations of portions of Rogers' and Fatt's property by an expropriation notice signed on December 16, 1991. On December 23, 1991 a certificate of approval under s. 17 of the Act was issued on behalf of the Minister of Transportation and Highways. On that same day the notice of expropriation was served on Rogers and Fatt by leaving a copy with their lawyers, Harman & Company.

On January 17, 1992 Rogers and Fatt filed a notice of request for an inquiry with the Expropriation Compensation Board. A notice of advance payment was issued by the province on January 28, 1992 and on January 29 at 11:58 a.m. it served that notice on Rogers and Fatt, along with a cheque for an advance payment of $462,000 made payable to Harman & Company, Barristers and Solicitors "In Trust", and a copy of the appraisal it relied on in determining the amount of the advance payment. Once again, service was effected by leaving the various items with Rogers' and Fatt's lawyer. Later that same day, the province filed a vesting notice at the Land Title Office, and at 3:29 that afternoon it served a copy of the filed vesting notice on Rogers and Fatt, again through their lawyer.

Rogers' and Fatt's lawyer sent a letter the next day, January 30, 1992, to the province's lawyer on this matter. Referring to the tendering of the advance payment, he wrote:

My clients have asked me to advise the Ministry, through you, that the tender of payment is to be held in trust pending their decision on whether to move for a declaration that the purported taking is invalid, or alternatively, the Expropriation Compensation Board launching an inquiry, as they have requested.

The next formal step that was taken in this matter was a hearing of Rogers' and Fatt's request for an inquiry, which took place on February 7, 1992. That request was subsequently denied.

In October of 1992, Harman & Company transferred the advance payment from its trust account to the account of Rogers and Fatt at an investment company. On April 2, 1993, Harman & Company filed a Form A application for determination of compensation with the Expropriation Compensation Board on behalf of Rogers and Fatt. The province filed its Form B reply on November 9, 1993.

 

3. THE POSITIONS OF THE PARTIES

The province says that the board does not have jurisdiction to hear the application for determination of compensation, because the Form A was filed more than a year after the province made its advance payment to Rogers and Fatt. It relies on s. 24 of the Act, which provides as follows:

Where no application is made to the board to determine compensation within one year after payment is made under section 19, the owner whose land was expropriated shall be deemed to have accepted that payment in full settlement of his claim for compensation, and no proceedings to determine compensation shall be brought by the owner.

The province says that it made its payment under s. 19 on January 29, 1992, and that since the Form A was not filed until April 2, 1993, more than one year later, the board must dismiss Rogers' and Fatt's claims that relate to this expropriation.

Rogers and Fatt maintain that the board does have jurisdiction to entertain their claims. They set out two bases for this contention. First, they say that the province did not strictly comply with the provisions of s. 19, and that such strict compliance is a necessary prerequisite to calling on the provisions of s. 24 by way of defence. Subsection 19 (1) requires that the expropriating authority make its advance payment and serve a copy of the relevant appraisal reports on the claimants within 30 days of receiving the Minister's approval. In this case, the service of the advance payment and the appraisal upon Rogers' and Fatt's lawyer was made on January 29, 1992, some 37 days after the certificate of approval was issued. Rogers and Fatt point to the provisions of ss. 19 (10) and 49, which are curative provisions that permit applications to be made for the extension of the time restrictions contained in s. 19 and, in the case of s. 49, of some other time restrictions set out in the Act. Section 49 does not, however, permit the extension of the limitation period contained in s. 24. It would appear that s. 19 (10) must be invoked before the effluxion of the time limitation, whereas s. 49 may clearly be called upon even after the time limitation has expired. Rogers and Fatt maintain that it is incumbent on the province, not having complied with the 30 day limitation set out in s. 19, to make an application to the board under s. 49 to have that limitation period extended. The province has not done this. It would only be upon the province obtaining an order under s. 49, according to Rogers and Fatt, that the one year time limitation contained in s. 24 would begin to run against them.

In the alternative, Rogers and Fatt maintain that the advance payment was not made to them until October of 1992, when their lawyer paid the funds to them out of trust. Using that payment date, their Form A was filed within the required one year and would not be statute-barred.

The province says that the wording of s. 24 is plain and its implication for Rogers and Fatt clear. The s. 19 payment was made, it says, on January 29, 1992, and the one year limitation period runs from that date. The Form A having been filed on April 2, 1993, is out of time and the claims arising from the first expropriation are therefore statute-barred. There can be no doubt, the province says, as to the nature of the January 29, 1992 payment. It was made regarding the expropriation, after the formal approval of the expropriation by the Minister and after service of a notice of expropriation on Rogers and Fatt. It was accompanied by the notice of advance payment and the appraisal report required by s. 19. Moreover, the cheque was cashed by Rogers' and Fatt's lawyer the same day he received it.

In addition, the province maintains that Rogers and Fatt are essentially, although not explicitly, challenging the validity of the expropriation by taking issue with the province's compliance with the provisions of s. 19. This is not permissible under the Act, it says, once vesting has been completed, because of the provisions of s. 50 which states that "no legal proceedings to challenge the validity of an expropriation shall be brought after land vests under section 22." Since the land in question here vested in the province on January 29, 1992, the province says that it is not now open to Rogers and Fatt to call its compliance with s. 19 into question. Moreover, the province says that seeking to challenge the validity of an expropriation is fundamentally inconsistent with putting forward a claim for compensation as a result of that expropriation, and that the two positions cannot validly be taken simultaneously.

As far as Rogers' and Fatt's second argument is concerned, the province says that Harman & Company acted as their clients' agent in receiving their funds, so that payment to the firm constitutes payment to Rogers and Fatt. The fact that they did not have their lawyer pay the funds over to them out of his trust account until several months later is immaterial to the issue to be decided here.

 

4. ANALYSIS AND CONCLUSIONS

I do not agree with the province that the position Rogers and Fatt are taking amounts to a challenge to the validity of the expropriation, which is inconsistent with their claim for compensation and barred by s. 50. I consider Rogers' and Fatt's position to be analogous to that of the claimants in this board's decision in Cejka v. Cariboo Regional District (1993), 51 L.C.R. 113, which was described like this:

The claimants' response to the limitation defence raised by the respondent is to assert that the respondent is in non-compliance with the necessary prerequisite of payment as considered in ss. 19 and 24 of the Act. Although, arguably, this assertion also attacks the validity of the expropriation, it is in direct response to the defence raised by the respondent. The claimant does not raise the non-payment issue to defeat the expropriation, but rather to prevent the respondent from defeating the claimants' compensation claim by relying on what the claimant argues is the respondent's non-compliance with the Act. (p. 119)

I therefore do not consider that Rogers and Fatt are precluded by the operation of s. 50 from arguing as they have done.

I disagree, however, with Rogers and Fatt regarding their contention that strict compliance with s. 19 is a necessary prerequisite to the respondent relying on s. 24. The stipulation in s. 24 is that an application must be made "within one year after payment is made under section 19". It does not provide that the year runs from the date of the expropriating authority's compliance with all of the various requirements of s. 19. I agree with the province that the wording of the section is plain and must be applied as written. The issue to be addressed here is a simple one: when was payment made under section 19? If it was made more than one year before the Form A was filed, then those portions of the claim relating to the first expropriation would be statute-barred.

This case may be contrasted with the Cejka case. In Cejka, the claimants refused to accept the cheque that the expropriating authority tendered under s. 19, and returned it to the expropriating authority uncashed. The issue before the board, and later before the Court of Appeal, was defined as whether the tendering of the cheque constituted payment under s. 19. Mr. Justice Hinkson concluded:

In my opinion, payment within the meaning of the section requires not merely the tendering of the cheque but receipt of the proceeds by the owners before the tendering of the cheque can be regarded as payment within the provisions of the section. Absent payment, of course, the provisions of s. 24 do not begin to operate. [(1994), 53 L.C.R. 85 at 87]

In this case, the cheque was not returned uncashed; rather it was cashed and placed in the trust account of Rogers' and Fatt's lawyers, Harman & Company. Although their lawyer wrote to the province's lawyer advising that he was holding the funds in trust pending his clients' decision as to what legal step to take next, his course of action was not in response to any conditions attached by the province to his dealings with the funds, and he was not obliged to return the money if certain events did or did not occur. To that extent, it appears to me that the funds were, from the moment they were accepted by Harman & Company, completely within the control of their clients, Rogers and Fatt. Although it was not stated explicitly either in the Harman & Company letter or in the representations of counsel at this application, I assume that the main reason the funds were being held in trust was that Harman & Company wanted to be in a position to return them to the province in the event that their clients chose to bring a legal challenge to the validity of the expropriation. This would be because, arguably, it would be inconsistent to accept payment for an expropriation while also asserting formally the legal invalidity of that expropriation. Nonetheless, the decision whether to challenge the expropriation was entirely up to Rogers and Fatt, and at any time after Harman & Company received the advance payment, they could have required that the money be paid to them. That being the case, it seems to me of no consequence whether they took personal possession of the funds or whether they chose to instruct their lawyer to hold the funds for them in trust. The province paid the money to their lawyer, who was acting as their agent in accepting it, and he cashed the cheque. The province has as a result been out of pocket the amount of $462,000 since January 29, 1992. Under these circumstances, I do not see how I can conclude other than that payment was made under s. 19 on January 29, 1992. In my view, using Mr. Justice Hinkson's formula, the cashing of the cheque by Harman & Company must "be regarded as payment within the provisions of the section." Since payment was made on January 29, 1992, the provisions of s. 24 began to operate from that date.

Having drawn this conclusion, it necessarily follows that those portions of Rogers' and Fatt's application for determination of compensation dealing with the first expropriation were filed outside of the one year limitation period set by s. 24, and that the board therefore has no jurisdiction to entertain those claims.

It is with a considerable degree of reluctance that I come to this conclusion. Of the two expropriations, it appears from the pleadings that the first was by far the more significant, and that in denying the claims regarding that expropriation, I am denying the bulk of Rogers' and Fatt's claim. I see from reviewing the board's file that a good deal of activity has taken place on this file, both during the one year limitation period and since then. During the running of the limitation period the application for an inquiry was filed and heard, and a s. 47 costs application was filed by Harman & Company and heard. Harman & Company even filed a Certificate of Readiness within the one year period. Since then, there have been examinations for discovery, interrogatories, and interim applications filed regarding various discovery matters. Under these circumstances, it seems clear to me that the province was never under any misapprehension about Rogers' and Fatt's intention to proceed with their claim regarding the first expropriation, and I doubt that it has suffered any real prejudice as a result of the late filing of the Form A.

If s. 24 permitted me any discretion in terms of extending the limitation period, I would exercise it under these circumstances. However, there is no discretion given to the board under s. 24; once I determine that payment has been made, I have no choice but to dismiss the claims that were made out of time.

I therefore grant the province's application to strike out paragraphs 3 (e) and 3 (f) of the Application for Determination of Compensation, and to dismiss the claims contained therein.

 

 

Government of British Columbia