COTTFN files for leave to appeal to the Supreme Court in Enbridge Line 9B case

In October, I posted about the Federal Court of Appeal decision to deny an appeal by the Chippewas of the Thames First Nation ("COTTFN") from the decision of the National Energy Board ("NEB") approving the Enbridge Line 9B Reversal and Line 9 Capacity Expansion Project application.  COTTFN has now filed an application for leave to appeal the Federal Court of Appeal's decision to the Supreme Court of Canada.  Given that there was a dissenting opinion from one of the FCA judges and that the subject matter of the appeal concerns the role of administrative tribunals in relation to the Crown's duty to consult with and accommodate First Nations, there would seem to be a good chance that leave will be granted.

BC Landowner's nuisance claim dismissed - insufficient interference by water from municipal lands

A BC landowner sued his municipality over drainage runoff, seeking both damages and an injunction requiring the municipality to take "immediate and effective action to stop the flow of water onto his property."  In 2002, the municipality approved the development of 68 townhomes by a developer adjacent to and north of the landowner's property.  As a condition of the development, a greenway was granted to the municipality running between the properties (including a gas pipeline right of way and an asphalt walkway).

The landowner alleged that prior to the development, there was a watercourse between one and three feet deep running in the location of the greenway.  The developer was permitted to fill in this watercourse resulting in the loss of the drainage route and periodic flooding on the landowner's property to the south (3.67 acres).

The municipality responded that the surface ponding of water on the landowner's property was a natural and pre-existing feature given the location of the property at the toe of a slope, its proximity to the water table, and the impermeable condition of its soils.  Also, the municipality argued that any additional water flowing onto the landowner's property was so minor in volume that it did not constitute a substantial interference with the landowner's use or enjoyment of his property.

On review of the evidence, the BC Supreme Court was unable to accept the landowner's contention that water was never a problem on his property prior to the development.  The Court found that the landowner exaggerated the extent of the water problems suffered since the development.  Also, the water table underlying his property was high and the soil was "fairly impermeable".

The Court concluded that any water coming onto the landowner's property did not meet the test of a claim in nuisance - that it resulted in a substantial and unreasonable interference with his use or enjoyment of the property or that there was sufficient physical damage to the land.  The landowner's property was a "holding property, awaiting development", and the consequences from increased water were minor.  The landowner did not demonstrate that "the pooling water along the northern boundary of his property has either substantially altered the nature of his property or interfered to a non-trivial or significant extent with the actual use being made of the property."  There was also no basis to find that any substantial adverse alteration of the land had been caused.

The landowner's nuisance claim was dismissed.

Read the decision at: Wood v. Langley (Township).

BC Court rules neighbours liable in nuisance for "water problem" discharges

A recent BC Supreme Court decision begins: "It has been said that water is the driving force of all nature and as such it can be very destructive. ... It is a truism that water follows the path of least resistance and flows down a landscape to find the lowest point.  It has a tendency to descend and flow with great readiness.  These properties of water are abundantly clear in this case which involves a now protracted dispute between neighbours."

Neighbours A alleged that Neighbours R made changes to the R property that resulted in water damage to the A property.  Neighbours A sued in nuisance, negligence and trespass and sought general, aggravated and punitive damages, as well an injunction obligating Neighbours R to remedy the problems.

The most significant change to the R property was the installation of a tile drain (as part of a french drain) ending about 3 feet from the boundary between the A and R properties.  This tile redirected water from the R property to the A property.  Neighbours R also raised the grading of their property by a few feet, which put their property higher than the A property.  Previously, the R property had been lower than the A property at the boundary in question.  The increased water flows (including sludge) that resulted from these changes caused the damages to the A property alleged by the A neighbours.

As a threshold issue, the judge in this case examined the applicability of statutory limitation periods.  Justice Kerr ruled that the two-year limitation period did apply.  However, she also recognized that where there is continuing damage, a new cause of action arises each day (to some extent resetting the limitation period each day for any "fresh damages").  In this particular case, the effect of the limitation period was that Neighbours A could not recover for any damages sustained before November 25, 2007.  The french drain had been installed in 2001, but they did not commence their action until November, 2009.

Justice Kerr concluded that Neighbours R were liable to Neighbours A in nuisance.  Neighbours R had caused "a substantial and unreasonable interference" with their neighbours' use and enjoyment of the A property.  And Neighbours R were not saved by any riparian rights.  The evidence showed that the water problems resulted from groundwater rather than surface water and that the flow of water between the properties was not by way of a natural watercourse.  Neighbours R could not say that they were not causing a nuisance for having allowed surface water to flow naturally across their land to the A property.  Even if they were dealing with surface water, Justice Kerr found that the flow was the result of the significant changes made to the R property.

She awarded to Neighbours A the sum of $10,000 in non-pecuniary general damages for loss of use and enjoyment of the A property and the sum of $27,908.66 in pecuniary general damages for the cost of remediating the A property.

Read the decision at: Allison v. Radtke.

BC Rancher conviction for shooting neighbour's dog set aside; new trial ordered

In June, 2011, a BC rancher shot and killed her neighbour's dog.  She was later charged under Section 445(1) of the Criminal Code.  At trial, the rancher claimed the dog had attacked her cattle and relied upon Section 11.1(2) of BC's Livestock Act (a person may kill a dog if the dog is running at large and attacking or viciously pursuing livestock) and Section 39 of the Criminal Code (protection of personal property, this section has since been rolled into section 35) as legal justifications for her actions.  The Provincial Court judge rejected those defences and convicted her.  The rancher appealed the conviction to the BC Supreme Court.

At trial, counsel agreed that the burden rested with the Crown to prove that the defence under Section 11.1(2) of the Livestock Act (the other defence was not pursued) did not apply.  The trial judge identified the significant issue to be whether the dog that the rancher killed was "attacking or viciously pursuing livestock", and found that there was "no merit to the argument" that this was the case. 

However, the appeal court found that the trial judge had misapprehended the evidence at trial.  He had failed to consider a written statement of the rancher that had been tendered as evidence that included evidence that the dog had been "attacking or viciously pursuing" the cattle - there was evidence of biting and attacking.  Instead, the trial judge found that there was no evidence on this point, which in the view of the appeal court constituted a misapprehension of evidence.

The appeal court also found that the trial judge had erred in his application of the law.  On appeal, the rancher raised three defences: 1) the Livestock Act defence; 2) common law justification of defence of property; and, 3) defence of colour of right.  Although the second two defences were not raised at trial, the Crown did not object to those defences being raised on appeal.  The appeal court found that the matter must be sent back for a new trial in which the Court would consider evidence related to all three defences. 

With respect to Section 11.1(2) of the Livestock Act in particular, the appeal court gave the following interpretation of the defence: "Rather, a fair and liberal construction, consistent with the common law, the overall object of the [Act], and the intention of the legislature is required.  To my mind, s. 11.1(2) of the [Act] should [be] construed in the same manner as the common law as permitting any person to kill a dog when at the time of the act of killing, the dog: a. is running at large; and, b. is actually attacking or viciously pursuing livestock, or, if left running at large, would subject the livestock to a real and imminent danger that the attack or vicious pursuit would be renewed."  The act of killing a dog would be prohibited once the need for protection of the livestock has ended.

Read the decision at: R. v. Robinson.

BC Court: Aborted sale should have proceeded - vendor did not conceal property's propensity to flood

The purchaser of a 60-year-old residential property (Lot A) on Salt Spring Island in BC chose not to complete the purchase on the closing date because of alleged latent defects.  The purchaser alleged that a dam or berm constructed on a neighbouring property encroached on Lot A and also caused Lot A to flood.  He took the position that the dam and the flooding were latent defects not discoverable on reasonable inspection and that the vendor of Lot A knew about the dam and earlier flooding and should have disclosed them to the purchaser.

The purchaser did discover the presence of the dam shortly before the closing date.  The vendor's efforts to satisfy him that the property had no flooding problems were unsuccesful.  So the transaction did not close and the vendor sued the purchaser for loss of value (Lot A was ultimately sold to another purchaser at a lower price) and other losses including loss of rent and interest.

The BC Supreme Court found that the vendor did not fail to disclose a latent defect (i.e. a propensity to flood).  As stated by the Court: "The doctrine of caveat emptor applies in real estate transactions with respect to defects that are discoverable on reasonable inspection.  A vendor does not have to disclose patent defects; rather, a vendor must only disclose latent defects."  On the evidence before it, the Court found that there was only one relevant flooding event and that was caused by vandalism combined with poorly maintained highway ditches - not by the dam encroachment.  This was not a latent defect known to the vendor.

Also, the sale contract provided for an inspection to confirm property boundaries, which would have revealed the actual boundaries and whether there were any encroachments (i.e. the dam).  However, the purchaser did not complete an inspection.  If there was an encroachment, the Court found that it could have been identified by reasonable observation (i.e. a patent defect).  Moreover, the encroachment that did exist was a minor one and in no way rendered the residential premises unfit for habitation.

The purchaser was bound to close the transaction and, as a result of his failure to do so, was found liable to pay damages including the decrease in the sale price obtained by the vendor and various carrying costs incurred when the property had to be offered for sale again.

Read the decision at: Ganges Kangro Properties Ltd. v. Shepard.

BC Horse Farm case sent back to Farm Industry Review Board - original decision was unreasonable

In 2009, PH constructed a new barn on her farm property in Kelowna, BC to accommodate an equestrian business.  Her neighbours to the south brought a claim before the Farm Industry Review Board claiming that they were suffering from the effects of noise, lights, flies and odour from the farm.  In March, 2013, the Board found that a section of the horse farm and equestrian centre was not a normal farm practice - turning out horses within 15 metres of the southerly property line was deemed not a normal farm practice based on the City of Kelowna's zoning by-law and the Ministry of Agriculture's Farm Practice Review Guide.

 

The Board dismissed the noise and light complaints and determined that the farm's manure management practices were normal farm practice.  However, the Board accepted the complaint concerning the location of "livestock area B", which was not set back from the southerly property line.  The Board ordered that the area be shifted at least 15 metres from the boundary.

 

PH appealed and, on judicial review, the BC Supreme Court found that the Board's decision was unreasonable; the matter was remitted to the Board for a re-hearing.

 

The Court found that the Board, on the whole, failed to consider evidence pertaining to similar farm businesses in similar circumstances.  The Board's decision was not justified or transparent and reasonable because of that.  The Court wrote:

Although it is important to conduct an evaluative function that addresses the "good neighbour" principle, etc., the BC legislature chose clear and specific features of normal farm practices, including "accepted", "established", and "followed" practices.  This language is a clear and specific direction from the legislature that instructs the [Board] that it can supplement but not substitute certain evidence - e.g. provincial guidelines or the "good neighbour" principle - in place of evidence that demonstrates "proper and accepted customs and standards as established and followed by similar farm businesses under similar circumstances".  Indeed, the [normal farm practices legislation] circumscribes the evidence the [Board] must consider in making its final determination of normal farm practice.

and,

The legislature was clear when it defined the normal farm practice as a practice consistent with "proper and accepted customs and standards as established and followed by similar farm businesses under similar circumstances"; the [Board] was required to determine whether practices and by laws comport with those established practices.

Read the decision at: Holt v. Farm Industry Review Board.

BC Supreme Court rules on dispute between municipality and pipeline company over upgrade costs

The City of Surrey planned to expand the Fraser Highway.  The expansion would necessitate the upgrade of a pipeline owned and operated by FortisBC Energy Inc. (formerly Terasen), and Fortis commenced an action against Surrey in respect of the allocation of cost for the upgrade.  Fortis claimed that it had been assigned rights originally held by the British Columbia Electric Company under a Trunk Line Agreement from 1956.  Under that agreement, Fortas argued, the costs of the pipeline upgrade work were to be allocated by agreement between the parties or, failing agreement, were to be determined by arbitration.

In the alternative, Fortis sought a declaration that the highway project constituted a de facto expropriation of its statutory right-of-way along with directions that would require Surrey to proceed with the expropriation in accordance with applicable legislation.   Finally, in the further alternative, Fortis claimed compensation for the costs it had incurred already to protect its pipeline and to accommodate Surrey's highway project on the basis of quantum meruit or unjust enrichment.

Surrey disputed the validity and the application of the Trunk Line Agreement, saying that it had been superseded by legislation that requires Fortis to pay the full cost of the upgrade work.  In any event, Surrey alleged that Fortis had fundamentally breached and repudiated the Agreement.  Surrey counterclaimed against Fortis including claims for negligence, nuisance, negligent misrepresentation, breach of fiduciary duty and breach of contract.

In reviewing the Trunk Line Agreement, the BC Supreme Court found that provincial pipeline legislation enacted in 1955 was not intended to prohibit, supersede or override agreements such as the Trunk Line Agreement.  The Court then reviewed regulations made pursuant to the legislation and again found that the Agreement was neither superseded nor rendered illegal by the regulations.  However, the Court found that Fortis had repudiated the Agreement by refusing to consent to the dedication of the statutory right-of-way lands at the highway "unless Surrey either agreed to create a fee simple lot over the portion of the highway crossing the Pipeline, were paid all of the cost of the Pipeline upgrade work".  This deprived Surrey of substantially the whole of the commercial benefit of the Trunk Line Agreement and constituted a breach which went to the root of that contract.  The Court found that Fortis repudiated the Agreement, that Surrey accepted the repudiation, and that the agreement was terminated and ceased to bind the parties.

In the absence of the Agreement, the allocation of costs was determined by the Pipeline Regulation.  The Regulation provided that costs must be shared equally by a municipality and a pipeline company where a new highway is built within a municipality by the municipality on an existing right-of-way or on a newly dedicated right-of-way.  The Court found that the application of the Regulation to the pipeline upgrade work did not constitute a de facto expropriation because it would not "constitute a taking of virtually all of the rights of Terasen Gas with respect to the SRW or Pipeline".

Read the decision at: FortisBC Energy Inc. v. Surrey (City).

Equity ensures farm goes to intended beneficiary after codicil failed

This was an estate case involving a horse farm.  The farm had been owned jointly by Mr. and Mrs. von Hopffgarten before the husband died in 2006.  In 2011, Mrs. von Hopffgarten died - her will said she left the farm to a Ms. Rommel.  However, the von Hopffgartens had for a long time taken a man named Jesse Sabey under their wings and intended to leave the farm to him.  They both executed codicils to their wills (changing the beneficiary from Ms. Rommel to Mr. Sabey), but the codicils were invalid under the Wills Act, R.S.B.C. 1996, c. 489 because they were witnessed by only one person.

Sabey commenced an action the B.C. Supreme Court to claim ownership of the farm based on proprietary estoppel - statements made to him by the von Hopffgartens.  Alternatively, he made claims based on unjust enrichment and trust.  He alleged that he had worked extensively on the farm, with less remuneration than other workers, with the promise that he would someday take over the farm.  Interestingly, Sabey was not aware of the codicils that the von Hopffgartens had attempted to make (and, therefore, the codicils couldn't assist in making the case of proprietary estoppel). 

The Court accepted Mr. Sabey's evidence; no one challenged his credibility about the statements made to him.  The Court concluded that he had made out the case for proprietary estoppel and that "equity must be satisfied" by granting Mr. Sabey the farm. 

Read the decision at: Sabey v. Beardsley.

Farm divorce case prompts SCC to suggest changes to bankruptcy laws

The Supreme Court of Canada has released a decision upholding a Manitoba Court of Appeal ruling about an alleged loophole in Canada's bankruptcy laws.  The case involved former spouses who filed for divorce in 2000.  The husband lived on the family farm and was the sole registered owner of the farm.  Manitoba, like Ontario, has a system of equalization of family assets rather than a division of the family property.  That meant that the husband could keep the farm but would owe his ex-wife her share of the value of the farm (or the increase in the value of the farm during the marriage).

In this case, the spouses consented to a valuation of the property to be done by the Court.  However, before a valuation of the family property by a Court Master could be undertaken, the husband made an assignment in bankruptcy.  The Master subsequently found that the wife was entitled to an equalization payment of about $41,000, but she was not able to collect.  The Manitoba Court of Appeal determined that the wife's claim was "provable" in bankruptcy and had been extinguished when the husband's bankruptcy was discharged in 2002.

As a result of the "loophole", not only was the husband discharged from his duty to pay the equalization payment, but he kept the farm.  Under Manitoba law, the farm was exempt from the bankruptcy proceeding.  The wife attempted through the appeal process to persuade the Court that she should receive her equalization payment since it was, at least in part, based on the value of the farm which was not part of the bankruptcy at all.  Both the Court of Appeal and the Supreme Court disagreed.  The Court of Appeal noted that the wife had taken no steps over several years to attack the bankruptcy discharge (note that the wife had not been given notice of the bankruptcy in the first place and only discovered it after her ex-husband had been discharged).

Justice Lebel of the Supreme Court commented on the apparent unfairness created by inconsistencies between family law and bankruptcy law in various jurisdictions and suggested that changes may be necessary:

It seems to me that this matter is ripe for legislative attention so as to ensure that the principles of bankruptcy law and family law are compatible rather than being at cross-purposes.  However, until such legislative changes are made, creditor spouses should be alive not only to the pitfalls of the BIA, but also to the importance of the remedies available under it in such situations.

Read the Manitoba Court of Appeal decision at: Schreyer v. Schreyer - Man CA.

Read the Supreme Court of Canada decision at: Schreyer v. Schreyer - SCC.

Read the CBC News Story at: Top court rules bankruptcy can break divorce deal - Canada - CBC News.

Saskatchewan Court of Appeal awards farm to son

In a recent decision, the Saskatchewan Court of Appeal has ordered that parents, Barbara and Alfred Raymond transfer their one-quarter interests in a quarter section of land to their son, Barry.  The trial judge in the proceeding had instead ordered the payment of damages as opposed to specific performance of a transfer agreement that was found to have been in place between parents and son.

Barbara and Alfred are deceased, but their estates were respondents in the appeal.  The action by Barry arose out of a broader dispute between him and his brother, Alan, as to their succession to the farm land owned by their parents.  The trial judge found that a valid sale agreement for one-half of one quarter section of land had been in place between the parents and Barry and should be enforced.  Barry already owned another one-quarter interest in the property.  However, the judge declined to award specific performance of the agreement (i.e. the transfer of the land) because it was found that the land involved was not "unique or irreplaceable in the sense that it cannot be compensated by damages."  Instead, the trial judge awarded $70,500, which was one-half of the appraised value of the property.

The Court of Appeal decided differently and awarded the land to Barry.  The Court commented on the change in the law that took place in 1996 following a Supreme Court of Canada decision:

Until 1996 it had long been a tenet of our law that each parcel of real property was inherently unique. Given this inherent uniqueness, our courts made the equitable remedy of specific performance readily available to a plaintiff purchaser who claimed the vendor had breached a contract for the sale of real property. In 1996, Sopinka J.’s majority decision in Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415 (“Semelhago”), questioned these longstanding, rudimentary elements of our law of real property. His comments, although obiter, were thereafter generally accepted as law. However, Sopinka J. did not so much make new law as remind us that a basic legal rationale based on the presumed inadequacy of expectation damages has always underpinned the availability of specific performance as a remedy in cases involving real property. Unfortunately, post-Semelhago there has been some confusion as to when the remedy of specific performance will be made available to an aggrieved prospective purchaser of land. For this reason, Semelhago has been criticized for founding legal uncertainty in once settled law. This appeal results in part from that uncertainty.

The Saskatchewan Court of Appeal says that the SCC decision in Semelhago does not stand for the proposition that the presumption of uniqueness has been supplanted by a presumption of replaceability.  Judges must not longer presume the inadequacy of damages (i.e. a monetary payment rather than the land itself) as a remedy whenever real property is involved, but instead a judge must decide whether, in the cirucmstances, damages would be an inadequate remedy.  The Court of Appeal described the inquiry as follows:

In practical terms, this means the prospective purchaser bears the burden of adducing evidence that the subject property is specially suited to the purchaser and that a comparable substitute property is not readily available. These evidentiary points are necessarily intertwined because, on the basis of the evidence, the prospective purchaser must discharge the overall burden of persuading the judge that the subject property is so different from others that damages is an inadequate remedy and that justice dictates the purchaser should have the subject property. The judge, in turn, must conduct a critical inquiry on the evidence as to the nature and function of the subject property in relation to the prospective purchaser. The evidence and analyses will necessarily overlap, but the overall question the judge must answer is whether the justice of the matter calls for an award of specific performance because damages would be inadequate.

In the circumstances of this case, the Court of Appeal found that the land held unique value for Barry and was not simply a commodity.  It commented on Barry's specific case and on the unique value of family farm land in general:

It cannot be said that the Land is, or that Barry treated the Land as, more akin to a commodity than a tract of land having special attributes not found in any other farm land. The Land is immediately across the road from Barry’s home quarter. Barry already owns an undivided one-quarter interest in the Land. The Land once belonged to his grandfather and is home to his parents’ yard-site. Barry used the Land for over 40 years, with his parents, his brother, and his deceased son. These factors or attributes are cogent and impossible to value precisely. On this basis, I would find that an award of damages cannot restore Barry to the position that he would have been in had the Parents’ Estates performed under the agreement for sale of the Parents’ Interests. Furthermore, Barry’s evidence was also that there are no “reasonable yard-sites” located in close proximity to his home quarter. Whether or not reasonable yard-sites are available, no other yard-site could have the attributes of the Land. In other words, there is no comparable substitute property, let alone one that is readily available. If there is any farm land in respect of which compensatory damages is inadequate, it is typically that farm land which sits directly across the road from a farmer’s home quarter. This is especially so where the farmer has an existing legal interest in it, strong emotional and familial ties to it, and sound economic reasons for making it part of his farming operations. Whether pre- or post-Semelhago, such farmland is “unique” and the appropriate remedy in such a case is an order for specific performance.

Read the decision at: Raymond v Anderson.

ABlawg.ca: Supreme Court's broad interpretation of Section 99(1) of the National Energy Board Act

A Masters of Laws student at the University of Calgary has written an article about the recent Supreme Court of Canada decision in Smith v. Alliance Pipelines: Supreme Court Broadly Interprets s. 99(1) of the National Energy Board Act.  He notes that the decision may be limited in application to cases where a landowner recovers 85% or better of what he was offered going into arbitration under the NEB Act.

Alberta farmer beats Alliance Pipelines at Supreme Court of Canada

The Supreme Court of Canada has released a major decision for NEB-pipeline landowners in Canada.  I've posted previously on several occasions about Vernon Smith, an Alberta landowner caught in a lengthy and costly dispute with Alliance Pipelines Ltd. over remediation of his property.  Ultimately, the dispute went to the highest court in Canada, a sign that the Court was prepared to give a rare statement on the National Energy Board and landowner rights.

In 1998, the NEB had approved the Alliance Pipeline, which was to cross Smith's land.  In 1999, the pipeline was completed, but Alliance failed to carry out remediation of Smith's property as had been agreed.  Smith went ahead and did the work himself and then sought payment from Alliance.  Alliance refused to pay and the matter went to arbitration. 

At the same, Alliance took Smith to Court and sought an injunction against him.  Alliance lost that case, and Smith was awarded his partial indemnity (or party and party) costs.  In other words, Smith won but only recovered part of his costs.  Therefore, at the arbitration hearing under the National Energy Board Act, Smith claimed the rest of his court costs that hadn't been awarded on the basis that he was supposed to be made whole in the expropriation process.  He was entitled to recover all costs he incurred as a result of the expropriation and the construction of the pipeline.

There was another wrench in the works.  The first arbitration committee that was appointed to hear Smith's case was dissolved when one of the members became a judge.  That meant that a second arbitration had to be commenced.  Smith sought his costs of the first arbitration, but Alliance opposed this.  The second arbitrator awarded Smith both his costs of the first arbitration and his unpaid costs from the court case.  Alliance appealed the decision unsuccessfully to the Federal Court, but later had the arbitrator's decision overturned on appeal to the Federal Court of Appeal.

The Supreme Court has now re-established the decision of the second arbitration committee, finding that the decision was reasonable.  The Court found that awards of costs are fact-sensitive and generally discretionary.  The second arbitration commitee was right to find that Section 99(1) of the NEB Act, the costs provision that is triggered when a landowner recovers 85% or better of the pipeline company's offer, merited a broad reading in accordance with the intent of the legislation.  The intention is clear - landowners are to be fully compensated.  This is the intention that lies behind expropriation legislation generally.

On that basis, the Court ruled that Smith was entitled to recover all of his costs which had been reasonably incurred in both arbitrations and in the court case.  The case before the Alberta Court of Queen's Bench related to the same single claim for compensation by Smith in respect of the same single expropriation by the same single expropriating party, Alliance Pipelines.

Also of importance, the Court awarded Smith his substantial indemnity costs (solicitor-client) for all of the appeals by Alliance, finding that Smith was to be fully compensated and that he should not be made to bear the costs of what was, for Alliance, at test case.

With respect to the NEB Act and expropriation in general, Justice Fish of the Court wrote:

The goal of complete indemnification first appeared in the NEBA in 1981, when Parliament amended the statute to introduce most of what now constitutes Part V (An Act to amend the National Energy Board Act, S.C. 1980-81-82-83, c. 80). Prior to these amendments, ss. 145 to 184 and 186 of the Railway Act, R.S.C. 1970, c. R-2, were imported directly into the NEBA (R.S.C. 1970, c. N-6, s. 75). Under those provisions, “the costs of the arbitration” were in the discretion of the arbitrator and could be ordered against either party (Railway Act, s. 164(1); see Re Conger Lehigh Coal Co. Ltd. and the City of Toronto, [1934] O.R. 35 (H.C.J.), at pp. 43-44).

The 1981 amendments to the NEBA were inspired by the Law Reform Commission of Canada’s review, in 1975, of expropriation in the federal context in its Working Paper 9, Expropriation. This was expressly acknowledged by the Minister who introduced the amendments. The proposed legislation, he told Parliament, “substantially incorporates all the major recommendations of the Law Reform Commission of Canada expressed in its 1975 working paper” (House of Commons Debates, vol. VII, (1st Sess., 32nd Parl., March 6, 1981, at p. 8006).

One of the Commission’s recommendations was that owners not be precluded from receiving the compensation to which they were entitled by the financial burden of litigation. Ideally, said the Commission, expropriated owners should receive “full indemnity for all such costs” (p. 73). It also found that the Railway Act regime did not provide adequate compensation because “[b]y a quirk in the law, the word ‘costs’ in the Railway Act, as in many other acts, does not mean exactly what it says[; it] does not mean ‘full costs’” (p. 74).

Today, the principle of full indemnification appears explicitly in s. 75 of the NEBA, which provides, as I noted earlier, that a company “shall make full compensation . . . for all damage sustained” by the expropriated owner. Parliament adopted this more comprehensive approach to indemnification by broadening the language of s. 99(1) from “costs of the arbitration” to “all legal, appraisal and other costs determined by the Committee to have been reasonably incurred by that person in asserting that person’s claim for compensation”.

This amendment must be presumed to signify a clear and considered decision by Parliament to allow Arbitration Committees to exercise their full discretion in seeking to make expropriated owners whole (Sullivan, at pp. 579-82), and the historical context validates this presumption.

Moreover, the NEBA operates within the broader context of expropriation law, both federal and provincial. As early as 1949, this Court acknowledged the vulnerable position of expropriated owners. In Diggon-Hibben, Ltd. v. The King, 1949 CanLII 50 (S.C.C.), [1949] S.C.R. 712, at p. 715, Rand J. (Taschereau J. concurring) stated that no one should be “victimized in loss because of the accident that his land [is] required for public purposes”. In the same case, Estey J., citing with approval the earlier reasons of Rand J. in Irving Oil Co. Ltd. v. The King, [1946] S.C.R. 551, affirmed the right of an expropriated person under the relevant clause “to be made economically whole” (p. 717; see K. J. Boyd, Expropriation in Canada: A Practitioner’s Guide, (1988), at pp. 144-45).

More recently, in Toronto Area Transit Operating Authority v. Dell Holdings Inc., 1997 CanLII 400 (S.C.C.), [1997] 1 S.C.R. 32, at paras. 20-22, Cory J. (speaking for six of the seven-member panel) reaffirmed the principle of full compensation. Dealing there with Ontario’s Expropriations Act, R.S.O. 1990, c. E.26, Justice Cory held that the Act, a remedial statute, “should be read in a broad and purposive manner in order to comply with the aim of the Act to fully compensate a land owner whose property has been taken” (para. 23).

Like various provincial expropriation statutes, the NEBA is remedial and warrants an equally broad and liberal interpretation. To interpret it narrowly, as the respondent in this case suggests, would in practice transform its purpose of full compensation into an unkept legislative promise.

This case will surely have an effect on future arbitration cases under the National Energy Board Act as well as expropriation matters before provincial boards.  It confirms the principle of full compensation that must underlie the treatment of landowners in pipeline expropriation contexts.  It is not often that the Supreme Court of Canada chooses to examine landowner issues under the National Energy Board Act.  When it does, it can't help but have an effect on future cases.
Read the full decision at: Smith v. Alliance Pipelines.

Berendsen case settles just days before Supreme Court of Canada hearing

The case by Ben Berendsen, a Bruce County dairy farmer, against Ontario's Ministry of Transportation (MTO) has settled after 17 years of litigation.  In 2008, the Ontario Superior Court of Justice awarded Berendsen $1.7 million in damages related to the effects of contamination left on his farm property by the MTO during a road construction in the 1960's.  In 2009, the damages award was set aside by the Court of Appeal.  Now comes word that the case has been settled as between Berendsen and the MTO.  The hearing before the Supreme Court was to take place yesterday, January 28.  The appeal has now been discontinued. 

Better Farming has reported on the settlement, though it appears that there must be a confidentiality agreement in place: Books shut on Berendsen case.  Neither Berendsen nor the MTO were willing to say much about it.

B.C. woman found in contempt of court for distributing raw milk for human consumption

Alice Jongerden was ordered by the Supreme Court of British Columbia to stop packaging and distributing raw milk for human consumption. The Fraser Health Authority, which obtained that injunction, alleged that Ms. Jongerden disobeyed the order and asked that she be found in contempt of court.  The Fraser Health Authority said that after the injunction was issued in March, 2010, Ms. Jongerden continued to distribute raw milk in the same manner and to the same recipients as before. Ms. Jongerden admitted she continued to distribute raw milk, but said she complied with the court order by labelling the product “not for human consumption”.

Ms. Jongerden operates a dairy farm, carrying on business under the name of “Home on the Range”. She disagrees with the public policy prohibiting the distribution of raw milk and believes consumers should have the right to choose it.  On July 9, 2009, she was ordered by the Public Health Inspector to “cease and desist the distribution of raw milk for human consumption”.  When that order was apparently not complied with, the Fraser Health Authority sought and obtained an interim injunction from the Court.

On a review of the circumstances, the Court concluded that Ms. Jongerden wilfully disobeyed the terms of the Order by continuing to distribute and make available raw milk to the same individuals to whom she previously provided it for human consumption.  Therefore, Ms. Jongerden was found to be in contempt of the Court Order.  However, the Fraser Health Authority had not yet asked that any specific penalty be imposed for Ms. Jongerden’s contempt of court.  The Court understood that Ms. Jongerden had, as a result of the interim order of Saunders J., ceased all production and distribution of raw milk products. As long as that would remain the case, the Court found that Ms. Jongerden would have purged her contempt and that there should be no need for the matter to proceed to consideration of a penalty.

Read the decision at: Fraser Health Authority v. Jongerden.

Smith v. Alliance Supreme Court Hearing Video Online

"This has been a long and perplexing case for Mr. Smith, an 82 year-old farmer from central Alberta." 

Video of the recent hearing of the Smith v. Alliance Pipeline case by the Supreme Court of Canada is available on-line at: SCC Webcast.  The video seems a bit slow, but if you start it and hit pause for a while, it might buffer enough to allow it to play smoothly from that point forward. 

Smith v. Alliance case heard by Supreme Court of Canada

The Supreme Court of Canada heard an appeal by Vernon Smith yesterday against a decision of the Federal Court of Appeal related to pipeline landowner compensation for damages.  The Federal Court of Appeal had overturned an arbitration decision that awarded Smith his unpaid costs of a court case that had been started and lost by Alliance Pipelines.  According to the Supreme Court's website, a decision in the case is under reserve or has been made but with reasons to follow.  My previous posts on this case are at:
July 2010; April 2010; January 2010.

Smith v. Alliance Pipeline appeal to be heard by Supreme Court of Canada on October 5th

The October 5th hearing date for the appeal by Alberta farmer Vernon Smith to the Supreme Court of Canada has been confirmed.  This is an appeal from a decision of the Alberta Court of Appeal which overturned an NEB Act arbitration committee decision that awarded Smith his costs of a court case initiated by Alliance Pipelines.  A number of other Alliance landowners had applied to intervene in the case, but the Supreme Court dismissed their application on June 7, 2010. 

The fact that the Supreme Court has chosen to hear this case signifies its importance and, perhaps, the need to clarify the law involved.  You can read the written arguments filed by the parties at:

Smith (Appellant) Factum

Alliance (Respondent) Factum

Tentative date set for Supreme Court of Canada hearing in Berendsen contamination case

The Supreme Court of Canada has tentatively scheduled a hearing in the Berendsen v. MTO appeal for January 28, 2011 at 9:30 a.m.

Supreme Court of Canada has granted leave to appeal in Berendsen farm contamination case

In the mid-1960s, the Ontario Ministry of Transportation buried asphalt and concrete waste from a highway reconstruction project in an unlined pit on a nearby dairy farm with the owner’s consent. The Berendsens, experienced dairy farmers, purchased the farm in 1981. Shortly thereafter, their cows began to suffer serious health problems, to have a high cull rate, and to produce an unusually low quantity of milk. The immediate cause of the problems was the cows’ unwillingness to drink enough water, but the Berendsens claimed that the waste was the root cause. They alleged that chemicals in the waste had migrated to their well, contaminating the water and making it unpalatable for the cows. Testing showed that the chemicals in the water from the well did not exceed the Ontario Drinking Water Objectives, which set the levels allowed for human consumption. A new well 400 feet from the burial site was also rejected by the herd. When the Berendsens complained to the Ontario government, it arranged for an alternate water source. The herd’s water intake, milk production increased, and overall health improved. Meanwhile, the Ministry of the Environment did some water quality testing of the water in the wells, the barn troughs and the ditch, from which it concluded that the water met the Ontario Drinking Water Objectives and that it was not responsible for the problems. It stopped providing alternate water. The Berendsens sued Ontario in negligence for depositing the waste and then failing to remove the contamination. The trial judge allowed the action and awarded damages of $1,732,400 plus pre‑judgment interest and costs. The Court of Appeal allowed the appeal, set aside the trial judgment and dismissed the action.

The Supreme Court of Canada has granted leave to the Berendsens to appeal the decision of the Ontario Court of Appeal, with costs of the leave application in the cause (i.e. the issue of the costs of the leave to appeal application will be left until the appeal is actually decided by the court).  The hearing date for the appeal has not been set.

Alberta landowners seeking to intervene in Supreme Court of Canada case in Smith v. Alliance Pipelines

A number of Alberta landowners including those involved in the Balisky matter that went before the Federal Court of Appeal (where it was determined that landowners in that case could be compensated for damages related to the National Energy Board's 30-metre control zone) have asked for leave to intervene in the upcoming Supreme Court of Canada hearing in Smith v. Alliance Pipelines.  That case, scheduled to be heard this October, deals with the authority of the Pipeline Arbitration Committee under the National Energy Board Act to award costs of a related court action as damages suffered by the landowner.  The arbitrator awarded the costs and the Federal Court of Appeal overturned the decision. 

It is certainly a rarity that a case like this proceeds to the Supreme Court.  Hopefully it will provide further clarity about the compensation arbitration process under the NEB Act. 

Also note that the Pipeline Arbitration Committee itself has declined to participate in the appeal.