Supreme Court of Canada
Lamb v. Canadian Reserve Oil & Gas Ltd., [1977] 1 S.C.R. 517
Date: 1976-05-05
Frank John Lamb Appellant;
and
Canadian Reserve Oil & Gas Ltd. Respondent.
1975: December 2; 1976: May 5.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN
Mines and minerals—Acquisition of surface rights—Compensation order—Weight to be given to conclusions of Board of Arbitration on appeal—Value of land—Loss of use—Application of “Blackstock formula”—The Surface Rights Acquisition and Compensation Act, 1968 (Sask.), c. 73, ss. 24(1)(a), 52(1), 55(1).
The respondent company, which had the right to the oil and gas located beneath the surface of two quarter-sections of land owned by the appellant, desired to acquire a surface lease for a well site and roadway on the appellant’s land. The parties were unable to agree upon the terms for such a lease, and, accordingly, an application was made by the respondent to the Board of Arbitration for an immediate right of entry. By its order, made pursuant to s. 18 of The Surface Rights Acquisition and Compensation Act, 1968 (Sask.), c. 73, the Board granted the respondent immediate right of entry upon the land for the purpose of drilling, establishing a well site and building a roadway to the site, all subject to the payment of compensation to the appellant. The well site and roadway comprised 1.21 acres in all.
Following a hearing, the Board issued an order whereby it required compensation payments for, inter alia, the value of the land and the loss of its use. As to the amount of compensation for the value of the land, the Board added 50 per cent to the value fixed by it because the small parcel of 1.21 acres was being removed from the larger block of the appellant’s land. On appeal, Bendas D.C.J. confirmed the Board order, but varied it by eliminating the item for loss of use of the land. The appellant appealed from this judgment to the Court of Appeal. The Court of Appeal set a lower value for the land and rejected the “Blackstock principle” that where a small parcel is taken out of a larger block 50 per cent
[Page 518]
should be added to the value of the land where there are no comparable sales of similar land in the district.
The appellant appealed to this Court, seeking, in essence, the restoration of the amounts awarded by the Board.
Held (Pigeon and de Grandpré JJ. dissenting in part): The appeal should be allowed.
Per Laskin C.J. and Martland, Judson, Ritchie, Spence, Dickson and Beetz JJ.: The view of the Court of Appeal that on an appeal from the Board the District Court judge should ignore the findings of the Board and determine the issues exclusively upon the evidence before him was not accepted. The District Court judge was entitled to consider and was right in considering the findings of the Board as having substantial evidentiary value and in giving considerable weight to them.
An appeal under The Surface Rights Acquisition and Compensation Act is concerned with the assessment of compensation and involves the determination, inter alia, of land values, damage to land, the effect upon land resulting from the right of entry and allowance for nuisance. The appeal is from a tribunal which, in dealing with compensation claims throughout the province, acquires an expertise in these matters. The appeal is to a District Court judge, at the judicial centre nearest to the land in question, who is not a specialist in these matters. He hears evidence, and, it may be, fresh evidence. He can assess the credibility of the witnesses, but in determining land values, the adverse effect on other land resulting from right of entry and compensation for nuisance, he should have some regard for the opinion of the Board. By this means a measure of equitable compensation can be achieved which will be uniform throughout the province, rather than varying decisions by different District Court judges in various areas of the province.
As held by the Court of Appeal, the Board, in the light of the words used in s. 24(1) (a) of the Act, was properly entitled to award compensation in respect of the value of the land and the loss of its use.
As to the application of “the Blackstock formula” in determining the value of the land, the approach of the District Court judge, who agreed with the Board that
[Page 519]
the formula should be applied, was the proper one. The approach of the Court of Appeal appeared to be that it should start, not with the findings of the Board, but from the respondent’s offer, and consider whether that offer had been demonstrated to be inadequate.
Per Pigeon and de Grandpré JJ., dissenting in part: On the text of the statute (s. 55) the District Court judge is obligated to start afresh and to make his own findings. To do so, he cannot rely on the findings of the Board which might well have not only listened to evidence of a somewhat different nature but which might also have visited the scene and which surely had drawn on its experience.
Thus the District Court judge is presiding over a new trial. Obviously, however, the judge has the obligation by statute to give considerable weight to the findings of the Board, findings which must be equated to the evidence of an expert whose opinion on the subject-matter is particularly relevant. Because of that weight the appeal should be disposed of as proposed by the majority, including compensation for loss of use of the land.
[Carswell v. Alexandra Petroleums Ltd., [1972] 3 W.W.R. 706, applied; Re Union Gas Co. of Canada Ltd. and White (1969), 10 D.L.R. (3d) 39, distinguished; La Cité de Ste-Foy v. La Société Immobilière Enic Inc., [1967] S.C.R. 121; Copithorne v. Shell Canada Ltd. (1969), 70 W.W.R. 410, referred to]
APPEAL from a judgment of the Court of Appeal for Saskatchewan[1], reversing a judgment of Bendas D.C.J., whereby an award made by the Arbitration Board under The Surface Rights Acquisition and Compensation Act, 1968 (Sask.), c. 73, was confirmed, subject to a variation. Appeal allowed.
M.C. Shumiatcher, Q.C., and R. Kohaly, Q.C., for the appellant.
R.L. Barclay and M. Gerwing, for the respondent.
[Page 520]
The judgment of Laskin C.J. and Martland, Judson, Ritchie, Spence, Dickson and Beetz JJ. was delivered by
MARTLAND J.—The respondent is a company engaged in the search for and the production of oil and gas and has the right to the oil and gas located, inter alia, beneath the surface of land owned by the appellant and described as LSD 9 of section 11, in township 47, range 27, west of the third meridian in Saskatchewan. The respondent desired to acquire a surface lease from the appellant for a well site and roadway on his land, but the parties were unable to agree upon the terms for such a lease. Accordingly an application was made by the respondent to the Board of Arbitration for an immediate right of entry. By its order, made pursuant to s. 18 of The Surface Rights Acquisition and Compensation Act, 1968 (Sask.), c. 73, hereinafter referred to as “the Act”, the Board of Arbitration granted the respondent immediate right of entry upon the land for the purpose of drilling, establishing a well site and building a roadway to the site, all subject to the, payment of compensation to the appellant.
The Board of Arbitration, hereinafter referred to as “the Board”, is a statutory board, created by the Act, which is empowered, inter alia, to determine the compensation to be paid to an owner of land by a person who acquires surface rights pursuant to the Act.
A hearing was called by the Board to determine the compensation to be paid by the respondent for the rights acquired and enjoyed by its right of entry and for the well site and roadway comprising 1.21 acres in all.
Section 24 of the Act provides as follows:
24. (1) For the purpose of determining the compensation to be paid for surface rights acquired by an operator, the board shall consider the following matters:
(a) the value of the land and the loss of use of the land or an interest therein acquired by the operator;
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(b) the area of land that is or may be permanently or temporarily damaged by the operations of the operator;
(c) payment or allowance for severance;
(d) the adverse effect of the right of entry on the remaining land by reason of serverance;
(e) payment or allowance for nuisance, inconvenience, disturbance or noise, to the owner and occupant, if any, or to the remaining land, that might be caused by, arise from or likely to arise from or in connection with the operations of the operator;
(g) where applicable in the opinion of the board, interest at a rate to be fixed by the board;
(h) any other matter peculiar to each case, including the cumulative effect, if any, of the surface rights previously acquired by the operator or by any other operators under a lease, agreement or right of entry existing at the time of acquisition of the surface rights with respect to the land;
(i) such other factors as the board deems proper, relevant and applicable.
(2) The board may allow to the owner or occupant, if any, reasonable costs and expenses incurred by the owner or occupant relating to the hearing with respect to the acquisition of the surface rights and where the board allows to the owner or occupant such costs and expenses it shall fix the amounts thereof. (Substituted for (f), 1972 (Sask.), c. 127, effective April 21, 1972.)
Following the hearing, the Board issued an order for compensation to the appellant under s. 24 of the Act. It required the following payments under the various paragraph headings of that section:
| (a) Value of the land |
$235.95 |
|
| Loss of Use |
72.60 |
|
| (b) Area—1.21 acres |
|
|
| (c) Severance |
210.00 |
|
| (d) Nil |
|
|
| (e) Nuisance |
105.00 |
|
| (f) Costs |
240.00 |
|
| (g) Interest |
42.56 |
|
| (h) Nil |
|
|
| (i) Nil |
|
|
| Total of first year’s payment |
|
$906.11 |
[Page 522]
| Annual rental subject to section 32 of the Act: |
|
|
| Loss of use |
$ 36.30 |
|
| Severance |
210.00 |
|
| Nuisance |
105.00 |
|
| TOTAL |
|
$351.30 |
due and payable on the anniversary date of May 25, 1972 and each year thereafter so long as the property is retained by the operator.
In arriving at the compensation payable, the Board fixed the value of the land taken at $130 per acre, and added to this 50 per cent because the small parcel of 1.21 acres was being removed from the larger block of the appellant’s farm acreage, the block in question consisting of two quarter-sections of land. In arriving at the loss of the use of the land, the Board applied as a yardstick the value of the rape seed grown on the land, which was 24 bushels per acre valued at $2.50 per bushel, the then current price of rape. Since the appellant cropped the land every second year, the annual award for loss of use was fixed at $36.30.
No award was made of any additional amount to compensate for the adverse effect upon the remaining land. In considering compensation for severance, the Board held that $210 would compensate the owner for the extra work and expense involved in farming the parcel of land bereft of the 1.21 acres.
In calculating the allowance for nuisance, inconvenience, disturbance and noise to the owner arising or likely to arise from the operations of the respondent, the Board allowed $105.
The sum of $240 was awarded as costs in respect of the proceedings to May 19, 1972, the date of the order.
Finally, interest at the rate of 8 per cent per annum from the date of the granting of the right of entry to the date of the hearing was awarded.
The respondent appealed to the District Court from the Board’s order. Such an appeal is provided for in s. 52 of the Act. The relevant portions of that section and of s. 55 of the Act provide as follows:
[Page 523]
52. (1) Any person affected by an order of the board, except with respect to the right of entry, may appeal therefrom to the district court at the judicial centre nearest to the land in respect of which the order was made.
55. (1) An appeal under section 52 shall take the form of a new hearing.
(2) The district court has on appeal all the powers and jurisdiction of the board under this Act.
Bendas D.C.J. confirmed the Board order, but varied it by eliminating the item for loss of use of the land.
The appellant appealed from this judgment to the Court of Appeal. The Court of Appeal held that the value of the land was no more than $110 per acre. This was held to be the value of the land sold in a block of 320 acres. The Court rejected the “Blackstock principle” that where a small parcel is taken out of a larger block 50 per cent should be added to the value of the land where there are no comparable sales of similar land in the district. The Court also held that the evidence on nuisance did not support the award of $105 per year and reduced that amount to $50 per year.
In considering the provisions of s. 55 of the Act, Maguire J.A. rejected the principles applied by the Appellate Division of the Supreme Court of Alberta in interpreting an Alberta statute almost identical in its provisions to s. 55 in providing for an appeal in the nature of a “new hearing”. Allen J.A., in Caswell v. Alexandra Petroleums Ltd.[2], held that the presiding judge ought not lightly to disturb the findings of the Board of Arbitration, but that it requires cogent evidence to establish where the Board was wrong and why its award should be varied or revised upward or downward. These principles had been referred to and applied by Bendas D.C.J.
[Page 524]
Maguire J.A. applied instead the principle enunciated by Gale C.J.O. in Re Union Gas Co. of Canada Ltd. and White[3], at p. 42.
The appellant appeals to this Court, seeking, in essence, the restoration of the amounts awarded by the Board.
The main difference between the approach taken by Judge Bendas and that taken by the Court of Appeal in assessing the compensation which should be awarded to the appellant is with regard to the weight to be given to the conclusions of the Board. The former accepted the views expressed by Allen J.A., who delivered the reasons of the Appellate Division of the Supreme Court of Alberta, with reference to a similar situation, in the Caswell case, at p. 728:
In closing I would like to make a few general remarks as to what I conceive to be the functions of a court hearing an appeal from an award of the Right of Entry Arbitration Board. In the first place, although I have pointed out that the hearing is in the nature of a trial de novo, it is nevertheless an appeal from the findings of the tribunal making the award. Tribunals such as the Right of Entry Arbitration Board may be presumed generally to be selected because of knowledge or experience in the field in which they are to operate. They are dealing with these types of cases very frequently and they must be deemed to gain knowledge of their particular field through that experience. When they make detailed findings of fact, as they did in this case, after viewing the area and hearing representations from both sides, and render written reasons as extensive as they did in this case, I think that their findings should not be lightly disturbed. In other words I think it would require cogent evidence to establish where they were wrong and why their awards should be varied or revised upward or downward. The very informality of their proceedings may suit the type of case with which they are dealing better than formal court procedure.
These boards were set up to meet a demand that compensation be fixed on a fair and adequate basis where lands or rights are expropriated for private operations, and considerable weight should be attached to
[Page 525]
their findings, except where they are clearly demonstrated to be wrong.
Maguire J.A refused to accept this proposition. He stated his views as follows:
A new hearing may be compared to what under the Criminal Code is styled as a trial de novo. It involves the taking of evidence on the issues involved, which may be the same, similar or with considerable variation from that before the Board. An appellant is not subjected to an additional onus of calling “cogent” evidence to warrant a change in a determination by the Board. The duty and obligation of the appellate judge is to arrive at his decisions on the issues before him based upon the evidence given in this new hearing before him.
Section 55(2) provides that such appellate Court has all the powers and jurisdiction of the board under the Act.
I prefer and adopt the reasoning of Gale, C.J.O. in re Union Gas Co. of Canada Ltd. and White, [1970] 2 O.R. 85 at p. 88, 10 D.L.R. (3d) 39 (Ont. C.A.) where he states:
“the evidence might or might not be the same as that which was presented to the arbitration board but, fundamentally, after hearing whatever evidence or submissions that may be presented to it, the Ontario Municipal Board will have to come to a decision on that evidence and those submissions, uninfluenced by any findings or decision of the board of arbitration. Thus it seems to us that when either party appeals from a decision of the board of arbitration under that section of the Act the matter is at large and the other party may adduce whatever relevant evidence he deems advisable to increase or decrease the amount of compensation as his interests may dictate. That is clearly implied by the provision for a hearing de novo, which essentially means that there must be a fresh hearing or a hearing anew.”
It follows that the learned District Court Judge erred in following the procedure as indicated. The legislation requires that he hear and dispose of the issues on the evidence before him.
In substance this means that on an appeal from the Board the District Court judge should ignore the findings of the Board and determine the issues exclusively upon the evidence before him.
[Page 526]
With respect, I do not agree with this view. I feel that it fails to recognize the legislative purpose in enacting the Act. Section 3 of the Act defines this as follows:
3. The purposes of this Act are:
(a) to provide for a comprehensive procedure for acquiring surface rights;
(b) to provide for the payment of just and equitable compensation for the acquisition of surface rights;
(c) to provide for the maintenance and reclamation of the surface of land acquired in connections with, surface rights, acquired under this Act.
In order to accomplish those objects the statute provided for the creation of the Board of Arbitration, consisting of at least three members. The Act enabled the Board to make orders granting to persons having the right to a mineral or the right to drill for, produce, or recover a mineral, the right to acquire a right of entry for the purpose of drilling and to acquire land for a well site and roadway. Where the operator and the owner were unable to agree upon the compensation for such rights, the Board could determine such compensation and, in so doing, was required to consider the matters defined in s. 24.
The Board was created for the purpose of dealing with these and other matter arising under the Act, and it was designed to operate throughout the whole of the province. It was the exclusive forum for dealing with such matters, subject to the rights of appeal which the Act provided.
The nature of a tribunal of this kind was considered by this Court in La Cité de Ste-Foy v. La Société Immobilière Enic lnc.[4], a case which involved an appeal from a decision of the Quebec Public Service Board in respect of compensation payable upon an expropriation. Abbott J., who delivered the Judgment of the Court, said, at p. 126:
[TRANSLATION] Article 1066f of the Code of Civil Procedure prescribes that in an expropriation such as this, the Superior Court shall refer the case to the public Service Board as an arbitrator to fix the indemnity. Generally, the Board fixes the indemnity in all cases of expropriation in the province of Quebec, unless other-
[Page 527]
wise provided by specific statutes: I am of the opinion that in conferring this arbitral jurisdiction on the Board, the Legislature recognized the expert nature and the competence and specialized experience of the members who compose it, and wished to use these special qualifications, to put them to work, in the exercise of this arbitral jurisdiction.
In my opinion, the same legislative purpose is to be found in the creation of the Board of Arbitration under the Act. I recognize, as was pointed out in the Court of Appeal, that in the Ste-Foy case the appeal from the Board did not take the form of a new hearing; but was an appeal to the Court of Appeal. In that case the appeal to the Court of Appeal was based upon the record of the proceedings before the Public Service Board, whereas an appeal under the Act from the Board is in the form of a new hearing at which new evidence can be adduced. Nonetheless, in my opinion, the District Court judge was entitled to consider and was right in considering the findings of the Board as having substantial evidentiary value, and in giving to them the weight to which the judgment in the Caswell case said they were entitled,
In my view the appeal provision in question here is not, in its context, analogous to the provisions as to trial de novo contained in the Criminal Code dealing with appeals from summary convictions. In an appeal from a summary conviction the appellant is seeking a complete reversal of the judgment at trial, and the appeal takes the form of a trial de novo before a judge who stands higher in the judicial hierarchy. The decision involves the application of law to the facts adduced in evidence and the decision is made on the appeal upon the evidence presented at the trial de novo. An appeal under the Act is concerned with the assessment of compensation and involves the determination, inter alia, of land values, damage to land, the effect upon land resulting from the right of entry and allowance for nuisance. The appeal is from a tribunal which, in dealing with compensation claims throughout the province, acquires an expertise in these matters. The appeal is to a District Court judge, at the judicial centre nearest to the land in question, who is not a specialist in these matters.
[Page 528]
He hears evidence, and, it may be, fresh evidence. He can assess the credibility of the witnesses, but in determining land values, the adverse effect on other land resulting from right of entry and compensation for nuisance, he should have some regard for the opinion of the Board. By this means a measure of equitable compensation can be achieved which will be uniform throughout the province, rather than varying decisions by different District Court judges in various areas of the province.
The question now in issue did not arise in the Union Gas case to which Maguire J.A. refers. In that case the appellant company which had secured the expropriation of property for a natural gas pipeline was required to pay a sum of money to White, the owner of the land, as determined by a board of arbitration established under s. 41 of The Ontario Energy Board Act, 1946 (Ont.), c. 74. Dissatisfied with the award, the company appealed to the Ontario Municipal Board pursuant to s. 41(7) of The Ontario Energy Board Act. Section 41(8) of that Act required that
Notice of an appeal under this section shall set forth the grounds of appeal and shall be sent by registered mail by the party appealing to the secretary of the Ontario Municipal Board and to the other party…
This provision was complied with by the company, but no notice of appeal or cross-appeal was filed by White. Prior to the hearing before the Ontario Municipal Board, the question was raised as to whether White was entitled to adduce evidence in support of the award of the board of arbitration, or for an increase in the sum awarded.
The Municipal Board decided that a person who had not filed a notice of appeal from the board of arbitration could not be heard to claim increased compensation. This ruling was appealed. The Court of Appeal for Ontario disagreed and
[Page 529]
allowed the appeal. It is in this context that the passage from the judgment of Gale C.J.O., cited by Maguire J.A., was written.
Furthermore it should be noted that the board of arbitration referred to in The Ontario Energy Board Act was not a permanent institution such as the Board created by the Act. Section 41 of the Ontario Act, which related to expropriations of land for pipelines, provided, in part, as follows:
41. (1) The applicant shall make to the owner of land acquired by expropriation under this Part, or any predecessor of this Part, due compensation for the land and for any damages resulting from the exercise of such power.
(2) No action or other proceeding lies in respect of such compensation, and, failing agreement between the applicant and the owner, the amount thereof shall be determined in the manner provided in this section, and The Arbitration Act does not apply.
(3) The Minister shall appoint one or more persons as a board of arbitration to determine in a summary manner the amount of such compensation.
(4) Where the board of arbitration is composed of more than one person, the Minister shall designate one of them as chairman.
(5) The Lieutenant Governor in Council may make regulations governing the practice and procedure of the board of arbitration, and, until such regulations are made, the practice and procedure of the Ontario Municipal Board apply to any arbitration under this section.
These provisions contemplate the appointment from time to time of boards of arbitration. The Ontario Act did not create a specific tribunal of the kind which exists here, to which the statement in the Ste-Foy case is properly applicable.
In my opinion, Bendas D.C.J. was not in error in taking into account the views expressed in the Caswell case in reaching his decision.
The Court of Appeal disagreed with the District Court judge in respect of his refusal to make any allowance for loss of use of the land, which had been the only point on which he disagreed with the Board. The District Court judge was of the view
[Page 530]
that an owner in possession who has the use of the land is not entitled, under s. 24(1)(a) of the Act, to receive the value of the land and also compensation for loss of use of the land, as that would be “duplicate compensation”. He was of the view that when that paragraph referred to “the value of the land and the loss of use of the land”, the words “loss of use” were intended to apply only in cases where the owner did not enjoy the use of the land, e.g., if the land had been leased, in which case the tenant could be compensated for loss of use while the owner would receive the value of the land.
The Court of Appeal dealt with this issue in the following passage from its judgment:
Compensation is to be determined in accordance with s. 24 of the. Act and my first reference is to:
(1)(a) the value of the land and the loss of use of the land or an interest therein acquired by the operator
The Board is thereby empowered to grant compensation for both value of the land and loss of use. This is both reasonable and practical and in illustration I merely add;—if land value of say $130 per acre was allowed and if the life of the well was 20 years, the annual or total return to the farmer on the basis of land value alone, could not be considered as reasonable compensation.
Section 18 of the provides as follows:
18. Sections 19 to 32 apply in connection with the drilling for, producing, recovering or gathering of a mineral, to the acquisition by an operator of:
(a) the right to enter upon land for the purpose of drilling for a mineral,
(b) land for a well site and roadway;
(c) the right to enter upon, use, occupy or take land for the purpose of constructing a power line: and
(d) land for a battery site.
Sections 23 and 24(a) of the Act state that:
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23.(1) Every operator shall pay compensation for any of the rights mentioned in section 18 and acquired by him, in accordance with section 24.
(2) Where the operator and the owner of the operator and the occupant are unable to agree upon the compensation, such compensation shall be determined by the board under this Act.
24. (1) For the purpose of determining the compensation to be paid for surface rights acquired by an operator, the board shall consider the following matters:
(a) the value of the land and the loss of use of the land or an interest therein acquired by the operator,
“Owner” is defined in the Act as a person in whose name a certificate of title has been issued under The Land Titles Act, or his executor, administrator, successor or other legal representative. It includes a purchaser under a bona fide, agreement for sale.
“Occupant” means a person or tenant, Other than the owner, in actual and lawful possession of the land.
In my opinion, s. 24(1)(a) requires the Board to consider both the value of the land and loss of use of the land. There is nothing which confines the consideration of “loss of use” to the case of an occupant. On the contrary, the addition of the words “or an interest therein” appears to be designed to cover that situation. It is the owner who suffers loss of use of the land. It is the tenant who suffers loss of use of an interest in the land. Logically, it is difficult to see why the operator should be required to make a larger total compensation where the land which he requires is leased than he would if the land is occupied by the owner himself.
The purpose of the Legislature in requiring the Board to consider both value and loss of use of the land may well be that it was dealing with situations in which oil operators were enabled compulsorily to obtain possession of relatively small areas of land, for the purposes of drilling, well sites, roadways, power lines and battery sites, out of much larger areas of farm lands. During the time
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that the operator requires possession of the lands which he needs for such operations the farmer is deprived of the use of that portion of his farm. As Maguire J.A. points out, compensation in respect of land value alone could be inadequate.
Whatever may have been the reason for the form which s. 24(1)(a) took, it is clear that the Legislature, in providing for consideration of both value and loss of use, acted deliberately. The equivalent statute in Alberta, The Right of Entry Arbitration Act, was enacted much earlier, in the year 1947, (1947 (Alta.), c. 24). Section 12(2)(a) of that Act provided that:
The Board, in determining the amount of compensation may consider,—
(a) the value of the land;
(The emphasis is my own.)
That section, in other respects, covers the same ground as s. 24 of the Saskatchewan Act.
My opinion is that, in the light of the words used in s. 24(1)(a) of the Act, the Board was properly entitled to award compensation in respect of the value of the land and the loss of its use.
The District Court judge had agreed with the application of what is known as “the Blackstock formula” in determining the value of the land. This formula was devised by Mr. G.M. Blackstock, for many years the chairman of the Alberta Board of Public Utility Commissioners, in respect of compensation awards for the expropriation of land for pipeline construction. Recognizing that it was unfair to the owner, on the expropriation of a small tract of land from a larger area, to pay him only the average value per acre of the whole area, he adopted the practice of increasing the average value per acre of the small tract by 50 per cent.
The Court of Appeal disagreed with the application of the formula in this case.
The District Court judge made reference to the remarks of Allen J.A. in Copithorne v. Shell
[Page 533]
Canada Limited[5], at p. 415:
With respect to the application of the so-called Black-stock formula to the acreage in question it should be pointed out that the application of this formula has never been approved by this court and in Interprov. Pipe Line Co. v. Z.A.Y. Dev. Ltd. (1961) 34 WWR 330, 80 CRTC 42, and in Calgary Power Ltd. v. Danchuk, Day and Big Lake Farming Co. (1963) 41 WWR 124 (judgments delivered by Johnson, J.A.) it is expressly stated that the Blackstock formula for computation of the value of expropriated land should not be resorted to where there is evidence of other recent sales of comparable land in the district.
He then went on to say:
However, where, as in the present case, there are no comparable sales and where a small area is taken out of a large unit an appraiser should apply the Blackstock formula in order to arrive at a fair value of the land.
In these circumstances, which involved his appraisal of the evidence before him, in my opinion his conclusion should not have been disturbed.
In considering the issues before it, the approach adopted by the Court of Appeal is set out in the following passage:
The evidence called by the respondent clearly establishes that the going rate for well sites throughout that district and the offer made to the appellant Lamb as a first year total payment covering all items provided for under s. 24 of the Act was $600.
It is my understanding that the policy of the respondent relative to compensation is in accordance with its existing practice of payments offered and thus it is concerned only with the determination of the adequacy of the offers made.
I therefore limit my consideration to the adequacy of $600 as a first year payment and $300 annually thereafter.
It then considered the respondent’s offer of payment and decided that it was adequate, in reliance on the evidence as to land value and nuisance given by the witness Hawes, an appraiser called by the respondent. Having decided that it was adequate, it rejected the allowance of costs made by
[Page 534]
the District Court judge to the appellant in respect of the hearing before the Board and in respect of the appeal therefrom to the District Court.
The going rate for well sites in the district was that set by the respondent. The evidence of the respondent’s witness, McDonald, who was employed by a company which negotiated surface leases for the respondent, shows that the going rate was a flat rate of $600 for the first year and $300 for subsequent years, which was applied irrespective of the nature of the land leased, of its area, or its proximity to buildings.
In substance, the approach of the Court of Appeal appears to be that it should start, not with the findings of the Board, but from the respondent’s offer, and consider whether that offer has been demonstrated to be inadequate. With respect, it is my view that the approach of the District Court judge was the proper one.
In the result, I would allow the appeal, set aside the judgment of the Court of Appeal, save as to the method of computing interest to be applied to the appropriate amounts awarded, and restore the judgment of the District Court; but varied so as to include compensation for loss of use of the land in the amount fixed by The Board of Arbitration. The appellant should be entitled to the costs of the appeal to this Court and of the appeal to the Court of Appeal.
The judgment of Pigeon and de Grandpré JJ. was delivered by
DE GRANDPRE J. (dissenting in part)—I have had the advantage of reading the reasons prepared for delivery by my brother Martland and I share his conclusions. It seems to me, however, that it is not possible to equate the proceedings in the case at bar with those studied in La Cité de Ste-Foy v. La Société Immobilière Enic Inc.[6] In that case, the Courts were dealing with a true appeal in the full sense of that word whereas under The Surface
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Rights Acquisition and Compensation Act, 1968 (Sask.), c. 73, under consideration in the present instance, “an appeal… shall take the form of a new hearing” (s. 55). To my mind, this enactment really creates a right to a trial de novo. There is no need to decide at this time whether or not all of the conditions of a trial de novo under the Criminal Code have to be met in a new hearing under the Act. It is sufficient to underline that on the text of the statute the District Court judge is obligated to start afresh and to make his own findings. To do so, he cannot rely on the findings of the Board which might well have not only listened to evidence of a somewhat different nature but which might also have visited the scene and which surely had drawn on its experience.
Thus, in my view, the District Court judge is presiding over a new trial. Obviously, however, and this is the other side of the coin the judge has the obligation by statute to give considerable weight to the findings of the Board, findings which must be equated to the evidence of an expert whose opinion on the subject matter is particularly relevant. It is because of that weight that I would dispose of the appeal as proposed by my brother Martland, including compensation for loss of use of the land.
Appeal allowed with costs.
Solicitors for the appellant: Shumiatcher & Associates, Regina.
Solicitors for the respondent: MacPherson, Leslie & Tyerman, Regina.