Minister of Highways for British Columbia v. British Pacific Properties Ltd., [1960] SCR 561

Supreme Court of Canada

Minister of Highways for British Columbia v. British Pacific Properties Ltd., [1960] S.C.R. 561

Date: 1960-04-11

The Minister of Highways For The Province of British Columbia (Defendant) Appellant;

and

British Pacific properties Ltd., Vancouver Mortgage Corporation Ltd., and West Mount Estates Ltd. (Plaintiffs) Respondents.

1960: February 3; 1960: April 11.

Present: Kerwin, C.J. and Locke, Cartwright, Martland and Judson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA

Expropriation—Whether injurious affection by severance to be included in compensation for land taken—Interest on total award—The Highway Act, R.S.B.C. 1948, c. 144, s. 16—The Lands Clauses Act, R.S.B.C. 1948, c. 177, ss. 4, 64.

Under the provisions of the Highway Act, R.S.B.C. 1948, c. 144, the appellant took compulsory possession of the lands owned by the respondents. The compensation tendered was refused, and a subsequent arbitration made awards for the lands taken only, but refused compensation for damage sustained by reason of the severance of the respondents' lands from other lands owned by them. The trial judge held that compensation for the severance was properly payable, and this judgment was affirmed by a majority decision of the Court of Appeal. The Minister appealed to this Court.

Held: The appeal should be dismissed.

Per Kerwin C.J. and Cartwright and Martland JJ.: The principle applied in the precedents was that where a statute requires compensation to be paid for lands compulsorily taken, one element to be included in determining the compensation is the damage sustained by the owner by reason of injurious affection to his adjoining lands, because of

[Page 562]

the severance of the lands taken. Blundell v. The King, [1905] 1 K.B. 516 and The Master and Fellows of University College, Oxford v. The Secretary of State for Air, [1938] 1 K.B. 648, applied. Such compensation was not excluded by s. 16 of the Highway Act. The right to claim such compensation was reinforced by s. 64 of the Lands Clauses Act, the application of which was not excluded by s. 16 of the Highway Act by necessary intendment.

All the interest awarded to the respondents, including that given in respect of amounts awarded for injurious affection, was in place of their right to retain possession of their lands and could properly be given as against the Crown. Inglewood Pulp and Paper Company Ltd. v. New Brunswick Power Commission, [1928] A.C. 492 at 498; The King v. Mackay, [1930] S.C.R. 130 at 132, followed.

Per Locke and Judson JJ.: The amount of compensation to be paid was that provided for by s. 16 of the Highway Act. It was the value of the land to the owner with all the advantages which it possessed, present or future, in his hands which was to be determined. If the ownership of the lands taken enhanced the value of the lands from which they were to be severed, the extent of such enhancement was part of the value to the owner of the lands taken. The extent to which the value of the respondents' remaining land was depreciated by the taking of the lands in question was a matter to be taken into consideration in fixing the amount of compensation. Cedar Rapids Manufacturing and Power Co. v. Lacoste, [1914] A.C. 569 at 576; Woods Manufacturing Co. Ltd. v. The King, [1951] S.C.R. 504 and Pastoral Finance Association v. The Minister, [1914] A.C. 1083, referred to.

APPEAL from a judgment of the Court of Appeal for British Columbia[1], affirming (Davey, J.A. dissenting) a judgment of Collins J. Appeal dismissed.

J. S. Maguire and D. H. Paterson, for the appellant.

J. J. Robinette, Q.C., and J. S. Alley, for the respondent.

The judgment of Kerwin C.J. and of Cartwright and Martland JJ. was delivered by

MARTLAND J.:—The main issue in this appeal is as to whether or not the respondents are entitled, in respect of lands owned by them, possession of which had been compulsorily taken by the appellant under the provisions of the Highway Act, R.S.B.C. 1948, c. 144, to compensation for the damage sustained and to be sustained by them by reason of the severing of the lands taken from other lands owned by them.

[Page 563]

The lands in question are situated in the Municipality of West Vancouver and were taken for the purpose of establishing a public road through the municipality, known as the "Upper Levels Highway", from West Vancouver to Horse Shoe Bay.

Compensation for these lands was tendered by the appellant to the respondents, which was refused by them as being inadequate. The parties then proceeded to arbitration, pursuant to the provisions of s. 16 of the Highway Act and the provisions of the Department of Highways Act, 1955 (B.C.), c. 33. Awards were made to each of the respondents by the arbitrators, together with interest from March 10, 1954, the date upon which possession of the lands had been taken by the appellant.

The arbitrators stated that the amounts awarded were compensation for the lands taken only. They found that the provisions of the Lands Clauses Act, R.S.B.C. 1948, c. 177, and in particular s. 64 thereof, did not apply to the Highway Act, as in their opinion the provisions of the former act were excluded therefrom by necessary intendment. However, in the event that a court of competent jurisdiction should decide that they were in error in that opinion, the arbitrators made an appraisal of the damage sustained by the respondents, by reason of the severance of their lands, in the following amounts, namely:

1. British Pacific Properties Ltd	$12,522.35
2. Vancouver Mortgage Corporation Ltd.	$17,480.00
3. Westmount Estates Limited	$18,885.00

The respondents filed an originating summons for determination of this question of law and the learned trial judge awarded to the respondents the additional amounts of compensation above mentioned. This judgment was sustained by the Court of Appeal of British Columbia by a majority decision, from which the appellant has now appealed.

The relevant statutory provisions which require to be considered are s. 16 of the Highway Act and ss. 4 and 64 of the Lands Clauses Act.

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Subsections (1), (2) and (3) of s. 16 of the Highway Act are as follows:

16. (1) Compensation shall be paid in respect of lands entered upon and taken possession of under this Part for the following matters only:—

(a)Improvements on the lands so taken, that is to say, everything constructed on or annexed to the soil by the hand of man, such as roads, buildings, structures, and fences, and improvements made by clearing, planting, grading, or cultivating the soil:

(b) Lands which were originally granted to some person by the Crown, either in the right of the Province or the Dominion, and by the taking of which the total area taken for the purpose of highways from the lands comprised in the original Crown grant is found to exceed one-twentieth of the total area of the lands comprised in the Crown grant, and then only for the area in excess of one-twentieth of that total area; but, where the lands comprised in the Crown grant have been subdivided into parcels by any registered conveyance or plan of subdivision, the area of land which may be so taken from any parcel without the payment of compensation shall not exceed one-twentieth of the area of that parcel, and where lands are being taken from two or more of the parcels at the same time the total area to be so taken without the payment of compensation shall be apportioned among those parcels on the basis of their respective areas.

(2) If the amount of compensation payable in any case under subsection (1) is not agreed upon, the amount may be appraised and awarded by arbitration, and for that purpose the provisions of the "Department of Highways Act" relating to arbitration shall mutatis mutandis apply.

(3) In determining the compensation payable to any owner in respect of any land entered upon and taken possession of under this Part, there shall be taken into consideration the increased value, beyond the increased value common to all lands in the locality, that will be given to the remaining lands of the owner through which the highway will pass, by reason of the passage of the highway through the same or by reason of the construction of the highway or of works incidental thereto, and the increased value that will be so given shall be set off against the compensation otherwise payable to that owner under this section.

The relevant portions of the Lands Clauses Act provide:

4. This Act shall apply:—

***

(b)To every undertaking authorized by any Act which authorizes the purchase or taking of lands situate in any part of the Province for such undertaking;

and this Act shall be incorporated with every such Act to which this Act shall as aforesaid apply, and all the clauses and provisions of this Act, save so far as they shall be expressly varied or excepted by any such Act, shall apply to the undertaking authorized thereby, so far as the same shall be applicable to such undertaking, and shall, as well as the clauses and provisions of every other Act which shall be incorporated with such Act, form part of such Act, and be construed, together therewith, as forming one Act.

***

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64. In estimating the purchase-money or compensation to be paid by the promoters of the undertaking in any of the cases aforesaid, regard shall be had by the Justices, arbitrators, or surveyors, as the case may be, not only to the value of the land to be purchased or taken by the promoters of the undertaking, but also to the damage (if any) to be sustained by the owner of the lands by reason of the severing of the lands taken from the other lands of such owner, or otherwise injuriously affecting such other lands by the exercise of the powers of this or the special Act, or any Act incorporated therewith.

It is not contested by the appellant that, if the provisions of the Lands Clauses Act are applicable at all, the taking of the lands in question by the appellant was for an "undertaking" within the meaning of s. 4 of that Act. The appellant contends, however, that the provisions of that statute, and in particular s. 64, are not applicable in the circumstances of this case because they have been excluded by the terms of s. 16 of the Highway Act. The respondents claim that the provisions of the Lands Clauses Act are not thus excluded and that, by virtue of s. 64 of that Act, they are entitled to receive the additional compensation as appraised by the arbitrators. There would appear to be no doubt that if s. 64 is applicable, the respondents would be entitled to such compensation and the question is, therefore, as to whether or not that section does apply.

By virtue of s. 4 of the Lands Clauses Act, s. 64 of this Act would apply save so far as its provisions are expressly varied or excepted by the Highway Act. There is no express reference to the Lands Clauses Act in the Highway Act and, consequently, it is necessary to determine whether they can be regarded as having been excluded, by necessary intendment, because of the provisions of s. 16 of the latter statute.

The test to be applied was stated by Westbury, L.C., in ex parte The Vicar and Church Wardens of St. Sepulchre in re The Westminster Bridge Act, 1859[2], where the Lord Chancellor had to determine whether the provisions of the English Lands Clauses Act, 1845 (which contained a provision similar to s. 4 of the British Columbia Act) were excluded by the provisions of the statute there under consideration. It is as follows:

If the particular act gives in itself a complete rule on the subject, the expression of that rule would undoubtedly amount to an exception of the subject-matter of the rule out of the Lands Clauses Act.

[Page 566]

This statement was approved in the case of The London, Chatham and Dover Railway Company v. The Board of Works for the Wandsworth Distric[3]t.

The contention of the appellant is that s. 16 of the Highway Act does, in itself, give a complete rule on the subject and that by virtue of that section compensation is to be paid only for improvements on the lands entered and of which possession is taken, and for lands, which were originally granted by the Crown in the right of the Province or of the Dominion, to the extent that the area of the lands entered and of which possession is taken exceeds one-twentieth of the total area comprised in the grant from the Crown. Those, it is said, are the only matters in respect of which compensation is payable and payment of damage, in respect of any other land, is excluded by the necessary intendment of the section.

The respondents' answer to this is that when land is compulsorily taken and damage is thereby sustained by the owner, by reason of the severance of such land from other lands of that owner, that damage is a part of the value of the lands which are actually taken and for which compensation must be paid. It is contended that when s. 16 of the Highway Act directs that "compensation shall be paid in respect of lands entered upon and taken possession of under this Part" such compensation is included.

Two cases cited on behalf of the respondents support this contention. They are Blundell v. The King[4] and The Master and Fellows of University College, Oxford v. The Secretary of State for Air[5]. In the former case, lands were compulsorily taken under the Defence Acts for the erection of a fort. Section 19 of the Defence Act, 1842, required the person determining the compensation "to find the compensation to be paid either for the purchase of such lands, buildings, and other hereditaments, or for the possession or use thereof …" There was no provision in this statute similar to that contained in s. 63 of the English Lands Clauses Act (the equivalent of s. 64 of the British Columbia Lands Clauses Act). Nevertheless, Ridley J. held that the owner was entitled

[Page 567]

to compensation for the injurious affection of his adjoining lands arising from the natural and ordinary uses of the lands taken for the purposes of the fort.

At p. 522, he says:

On the other side it was argued that "compensation" means an indemnity—a full satisfaction for the land taken, and that, if in the taking of that land other land is injuriously affected, that injurious affection must be included in the term. If such a claim were decided by agreement, I think there is no doubt that no person would agree on the compensation due for his land to be taken without also adding to the actual purchase-money a claim in respect of the damages done by injurious affection of other land belonging to him; and it is fairly argued that the same elements must be included when a jury or an arbitrator has to assess the compensation. It is also to be remarked that s. 63 of the Lands Clauses Act does, in fact, treat such injurious affection as a part of the compensation to be given, for it enacts that "in assessing such compensation 'regard is to be had' not only to the value of the land but also to the damage," &c. And in the same section, "compensation" is apparently used as equivalent to "purchase-money"—so that the damages to be given for injurious affection are treated as a matter to be included in the purchase-money. I am inclined myself to prefer this reasoning, although I am somewhat pressed with the consequence which seems to follow, that even without s. 63 compensation under the Lands Clauses Act, 1845, would have included damages for injurious affection.

The decision of Ridley J. was stated to be right by Lord Hewart C.J., who delivered the unanimous judgment of the Court in the University College case.

The principle applied in these cases is that where a statute requires compensation to be paid for lands compulsorily taken, one element to be included, in determining the compensation for the lands taken, is in respect of damage sustained by the owner, by reason of injurious affection to his adjoining lands, because of the severance.

That element must, I think, be taken into account when applying the broad general principle governing the assessment of compensation to owners of property expropriated by the Crown which was enunciated by Rand J. in Diggon-Hibben Ltd. v. The King[6], and expressly adopted in the judgment of this Court in Woods Manufacturing Co. Ltd. v. The King[7]:

…the owner at the moment of expropriation is to be deemed as without title, but all else remaining the same, and the question is what would he, as a prudent man, at that moment, pay for the property rather than be ejected from it.

[Page 568]

Section 16(1) of the Highway Act requires compensation to be paid for lands entered upon and taken "for the following matters only", those matters being, under paragraph (a), for improvements and, under paragraph (b), for lands, but limiting the compensation for the latter item to the area in excess of one-twentieth of the total area comprised in the Crown grant. I do not think that these paragraphs restrict the elements which are to be considered in determining the compensation for lands taken. They restrict the area of land in respect of which compensation is to be paid. The word "only" refers to "matters" and not to the word "paid".

In my opinion, therefore, in computing the compensation to be paid for lands taken by the appellant pursuant to the provisions of the Highway Act, damage sustained by the land owner by reason of the severance of the lands taken from other lands owned by him is a part of the compensation to be given for such lands. Such compensation is not excluded by s. 16. The right to claim such compensation is reinforced by s. 64 of the Lands Clauses Act, the application of which is not, on my interpretation of s. 16, excluded by that section by necessary intendment.

The second issue is with respect to the award, by the learned trial judge, of interest from March 10, 1954, upon the amounts of compensation appraised by the arbitrators in respect of the severance of the respondents' lands. On this point, the appellant argued that an award of interest as against the Crown could not be made. Interest was awarded by the arbitrators on the amounts of compensation which they had determined, and there is no issue with respect to that interest award. In my view, the interest in question here upon the amounts awarded in respect of injurious affection is in the same position as the interest which they awarded. All the interest awarded to the respondents is in place of their right to retain possession of their lands and could properly be given as against the Crown. Inglewood Pulp and Paper Company, Limited v. New Brunswick Electric Power Commission[8]; The King v. MacKay[9].

[Page 569]

Certain preliminary objections raised on behalf of the appellant before Collins J. and referred to by him were abandoned in this Court. The point that costs could not be awarded against the appellant was decided adversely to the appellant by all the judges in the Courts below, and it also was abandoned before us.

In my opinion, therefore, the appeal should be dismissed with costs.

The judgment of Locke and Judson JJ. was delivered by

LOCKE J.:—The question as to whether, in determining the amounts of the compensation to be paid to the respondents for the lands taken, there should be included an allowance for injurious affection to the balance of their land at the place in question, does not, in my opinion, depend upon the provisions of s. 64 of the Lands Clauses Act, R.S.B.C. 1948, c. 177.

The amount to be paid is that provided for by s. 16 of the Highway Act, R.S.B.C. 1948, c. 144. The compensation referred to in that section is for the lands taken, subject to any deduction that is to be made under the provisions of s-s. (b), and for improvements of the nature described in s-s. (a) of that section.

In my opinion, the principles which have been applied in proceedings under the Railway Act, R.S.C. 1906, c. 37, which were considered in the judgment of the Judicial Committee in Cedar Rapids Manufacturing and Power Co. v. Lacoste[10], and in proceedings under the Expropriation Act, R.S.C. 1927, c. 64, considered in Woods Manufacturing Co. Ltd. v. The King[11], are applicable.

It is the value of the land to the owner with all the advantages which it possessed, present or future, in his hands which is to be determined. The authorities are reviewed in the judgment of the former Chief Justice of this Court in the Woods Manufacturing Company case. What was said by Lord Moulton in delivering the judgment of the Judicial Committee in Pastoral Finance Association v. The Minister[12] has been adopted and followed in this Court.

[Page 570]

The owner is entitled to receive as compensation for the land taken that amount which a prudent man in his position would have been willing to give for the land sooner than fail to obtain it.

If the ownership of the lands taken enhances the value of the lands from which they are to be severed, the extent of such enhancement is part of the value to the owner of the lands taken.

The extent to which the value of the present respondents' remaining land was depreciated by the taking of the lands in question was a matter to be taken into consideration in fixing the amount of the compensation allowable under s. 16 of the Highway Act.

As I consider this to be decisive of the matter I express no opinion as to whether s. 64 of the Lands Clauses Act affects in any way the quantum of the compensation to be allowed under s. 16 of the Highway Act.

It was part of the award made that the appellant should pay to the respondents interest at the rate of 5% from the date upon which the lands were taken, and Collins J. directed that interest at this rate be paid upon the compensation, including in the amounts an allowance for injurious affection. The appellant contended before the Court of Appeal and in this Court that no interest should be payable upon that portion of the compensation which was allowed for injurious affection, while not questioning that it should properly be paid upon the amounts found payable by the arbitrators. Since, however, in my opinion, the portion of the compensation awarded in each case for injurious affection to the remaining lands of the respondents forms part of the value to the owners of the lands taken, the basis for the objection disappears.

I would dismiss this appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Clark, Wilson, White, Clark & Maguire, Vancouver.

Solicitors for the respondent: Davis & Company, Vancouver.