






Citation:


Sequoia 
          Springs West Development Corp. v. British Columbia (Minister of Transportation 
          and Highways)


Date: 
          20030103







2003 
          BCCA 8


Docket:


CA026942

CA028227






COURT 
          OF APPEAL FOR BRITISH COLUMBIA






BETWEEN:






SEQUOIA SPRINGS WEST DEVELOPMENT CORP.






CLAIMANT/APPELLANT

(RESPONDENT 
          ON CROSS APPEAL)






AND:






HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE

OF BRITISH COLUMBIA AS REPRESENTED BY THE

MINISTER OF TRANSPORTATION AND HIGHWAYS






RESPONDENT/RESPONDENT

(APPELLANT 
          ON CROSS APPEAL)












Before:


The 
          Honourable Mr. Justice Esson







The 
          Honourable Mr. Justice Donald







The 
          Honourable Madam Justice Saunders








L.J. 
          Alexander and C.E. Hanman


Counsel 
          for the Appellant




A.V.W. 
          Hincks and F. Crowhurst


Counsel 
          for the Respondent




Place 
          and Date of Hearing:


Victoria, 
          British Columbia




May 
          23 and 24, 2002




Place 
          and Date of Judgment:


Vancouver, 
          British Columbia




January 
          3, 2003








Written 
    Reasons by:

The 
    Honourable Madam Justice Saunders



Concurred 
    in by:

The 
    Honourable Mr. Justice Esson

The 
    Honourable Mr. Justice Donald


Reasons for Judgment of the Honourable 
    Madam Justice Saunders:




[1]

Sequoia Springs West Development Corp. appeals a compensation award 
    made by the Expropriation Compensation Board on February 15, 2000 under the
Expropriation Act
, R.S.B.C. 1996, c. 125.  The Minister of Transportation 
    and Highways ("MoTH"), representing the Provincial Crown, cross 
    appeals the award and the order for payment of costs made in favour of Sequoia 
    Springs.

[2]

The compensation award was made in respect of the taking by the Provincial 
    Crown of approximately 29 acres of Sequoia Springs' property for the construction 
    of the portion of the Inland Island Highway on Vancouver Island known as the 
    Campbell River Bypass.

[3]

The lands taken were part of a 234 acre property.  Before the taking 
    Sequoia Springs was in the process of developing the property as a residential 
    golf course community.  The taking bisected the property from the southwest 
    to the northeast corner.  The remaining two parcels, separated by highway, 
    were approximately 91 acres and 114 acres.  It was said that after the taking 
    they were unsuited to development of a golf course.  Sequoia Springs said 
    that in addition to compensation for the partial taking, it was entitled to 
    compensation for costs thrown away, diminution in value of the remaining lands, 
    disturbance damages and damages for delay in development caused by the taking.

[4]

Because the expropriating authority and Sequoia Springs had made an 
    agreement under s. 3 of the
Act
whereby Sequoia Springs agreed 
    to the transfer of land but did not agree to the compensation to be paid, 
    the Expropriation Compensation Board was required to determine the amount 
    of compensation payable.  The hearing proceeded on the basis that the expropriating 
    authority had paid Sequoia Springs $1,425,000 as advance payments under s. 
    20 of the
Act
.  After the Board issued its decision it was determined, 
    in a matter relevant to the cross appeal on costs, that MoTH had paid Sequoia 
    Springs an additional $54,500, bringing the total of advance payments to $1,479,500.

[5]

The Expropriation Compensation Board ordered MoTH to pay Sequoia Springs:

1.   compensation under s. 40 of the
Act
for the market 
    value of the land that was acquired and the reduction in market value of the 
    remaining land, in the sum of $1,480,000;

2.   compensation under s. 40 of the
Act
for business 
    losses in the sum of $200,000; and

3.   its actual reasonable legal, appraisal and other costs to June 
    28, 1999 and its costs as prescribed in
The Tariff of Costs Regulation
, 
    B.C. Reg. 189/99 after that date.

A.
The Grounds of Appeal

[6]

Sequoia Springs contends that it should be awarded a greater sum.  
    It contends the Expropriation Compensation Board erred:

1.   in using after acquired evidence to determine a significant and 
    substantial downward adjustment to a comparable property, thereby negatively 
    affecting the market value of the lands;

2.   in failing to award damages for costs thrown away in developing 
    the halted golf course project;

3.   in failing to award damages for work done and costs incurred between 
    May 1993 and the actual taking in July 1, 1995, because of the prospect of 
    expropriation.

[7]

The Minister of Transportation and Highways contends in the cross appeal 
    that the Expropriation Compensation Board erred:

1.   in awarding any disturbance damages;

2.   in its conclusions with respect to the highest and best use; and

3.   in its award of costs to Sequoia Springs, particularly in giving 
    effect to an offer to settle made shortly before commencement of the hearing 
    (the
Calderbank
letter issue).

B.
The Statutory Scheme

[8]

The
Expropriation Act
establishes the procedures to be 
    followed and the criteria to be used in establishing the amount of compensation 
    for expropriated property
.

[9]

The compensation scheme is established in Part 6 of the
Act
.  
    The sections relevant to this appeal are:

30
(1) Every owner of land that is expropriated is entitled to compensation, 
    to be determined in accordance with this Act.



...



31
(1) The board must award as compensation to an 
    owner the market value of the owner's estate or interest in the expropriated 
    land plus reasonable damages for disturbance but, if the market value is based 
    on a use of the land other than its use at the date of expropriation, the 
    compensation payable is the greater of

(a) 
    the market value of the land based on its use at the date of expropriation 
    plus reasonable damages under section 34, and

(b) 
    the market value of the land based on its highest and best use at the date 
    of expropriation.



...



32
The market value of an estate or interest in land is the amount that would 
    have been paid for it if it had been sold at the date of expropriation in 
    the open market by a willing seller to a willing buyer.

Exclusions 
    from market value



...



34
(1) An owner whose land is expropriated is entitled to disturbance damages 
    consisting of the following:



(a) 
    reasonable costs, expenses and financial losses that are directly attributable 
    to the disturbance caused to the owner by the expropriation;

(b) 
    reasonable costs of relocating on other land, including reasonable moving, 
    legal and survey costs that are necessarily incurred in acquiring a similar 
    interest or estate in the other land.



...



40
(1) Subject to section 44, if part of the land of an owner is expropriated, 
    he or she is entitled to compensation for



(a) 
    the market value of the owner's estate or interest in the expropriated land, 
    and

(b) 
    the following if and to the extent they are directly attributable to the taking 
    or result from the construction or use of the works for which the land is 
    acquired:

(i) 
    the reduction in the market value of the remaining land;

(ii) 
    reasonable personal and business losses.



...



(3) 
    If part of the land is expropriated, the amount of compensation payable in 
    respect of the matters referred to in subsection (1) (a) and (b) 
    (i) may be established by determining the market value of the area of all 
    of the land before the date of expropriation and subtracting from it the market 
    value of the land remaining after the expropriation occurs, but in no case, 
    subject to section 44, must compensation be less than the amount determined 
    by multiplying the ratio of the area of the land taken to the area of all 
    of the land before it was taken, times the value of the land before it was 
    taken with the appropriate reduction if the interest expropriated is an easement, 
    right of way or similar interest less than the fee simple interest.



(4) 
    For the purposes of the second calculation referred to in subsection (3), 
    the value of the land before it was taken is the value of the land only, having 
    no regard to improvements on the land.



(5) 
    If, in the case of a partial taking, the character and use, or potential use, 
    of the land before it was taken varies such that the land that was taken was, 
    before the taking, more valuable or less valuable than the average value of 
    the land that was not taken, the board may, after making a determination under 
    subsection (3), make an adjustment to reflect that value accordingly.







[10]

An 
    appeal from a decision of the Expropriation Compensation Board is brought 
    directly to this Court under s. 28 of the
Act
:

28
(1) An appeal lies to the Court of Appeal from a determination or order of 
    the board with leave of a justice of the Court of Appeal.



(2) 
    On an appeal, the court may



(a) 
    refer the matter back to the board, or



(b) 
    make any determination or order that the board has the power to make.



C.
The Standard of Review

[11]

The appeal and cross appeal engage issues of fact and law.  In
Golden 
    Valley Golf Course Ltd. v. British Columbia (Minister of Transportation and 
    Highways)
2001 BCCA 392 this Court considered a previous decision
,
Actton Petroleum Sales Ltd. v. British

Columbia (Minister of 
    Transportation and Highways)
, (1998), 64 L.C.R. 161 (B.C.C.A.) in 
    light of
Pushpanathan v. Canada (Minister of Citizenship and Immigration)
, 
    [1998] 1 S.C.R. 982.  Madam Justice Newbury, writing for the Court, concluded 
    that
Actton
correctly set out the relevant principles as follows:

In my view,
except 
    for matters of pure law (such as the interpretation of a constituent

statute)
, 
    the proper standard of review is that of "reasonableness". . . . 
    In order to succeed on factual issues, or on issues of mixed fact and law 
    the complainants must show that the Board's award is unreasonable, or is supported 
    by reasons which cannot bear scrutiny, either for lack of an evidentiary foundation 
    or for some defect in the process by which conclusions were drawn from the 
    evidence. [para. 12; emphasis added.]







[12]

Thus, 
    in questions of interpretation, the standard of review is correctness.  On 
    issues of fact or mixed fact and law the proper standard of review is reasonableness.  
    In considering issues of fact, in particular, it is useful to bear in mind 
    the standard applied by this Court in appeals from orders in civil litigation, 
    for as Madam Justice Southin noted in
Casamiro Resource Corp. v. British 
    Columbia
, 2000 BCCA 407 at para. 16, "This Court, under the
Expropriation 
    Act
, has no greater power to review the decisions of the Expropriation 
    Appeal Board than it has to review judgments of the Court below in ordinary 
    civil litigation."

D.   
    Discussion

Issue 1  Did the Expropriation Compensation Board err in          
    its application of the comparable method to               determine market 
    value?

[13]

In 
    this issue the appellant contends that the Expropriation Compensation Board 
    erred in determining the market value of the land taken.  Under s. 40(3), 
    where, as here, there is a partial taking, the value to be determined is the 
    market value of the land taken plus injurious affection to the remaining land.  
    Determination of this value may be effected by comparing the value of the 
    entire parcel before the taking to the value of the parcels remaining after 
    the taking.  Those values may be determined by differing methods.  Where the 
    evidence allows, however, one expects before and after values to be determined 
    using the same method, e.g. comparison or development value approach.

[14]

The 
    appraisers called by each party had utilized both the comparison and the development 
    methods in their before taking appraisals, but only the development approach 
    in the after taking appraisal.  The Expropriation Compensation Board held 
    that the highest and best use, both before and after the taking, was for

... 
    a residential development with single and multi-family sites, with substantial 
    park and green space, to be phased in over a number of years.  In both cases 
    development was contingent on zoning approvals and the adoption of a CDP for 
    the property.







It 
    determined the before taking value by comparing the entire parcel to comparable 
    properties, the best of which was acknowledged to be the Hilchey Road property, 
    and checking it against values generated by the developmental approach.  It 
    determined the after taking value by considering the value of the remnants 
    based on a development approach.

[15]

In 
    discussing its approach on the before taking value, the Board said:

[49] 
    There is much commentary on the lack of reliability of the Development Approach 
    to derive value.  One of the principal objections to the method is the hypothetical 
    nature of the exercise.  E.C.E. Todd in
The Law of Expropriation and Compensation 
    in Canada
, 2
nd
ed. (Carswell Co. Ltd, Toronto, 1992) says at 
    page 219:



... 
    unless a proposed subdivision has actually been officially approved there 
    is always some degree of uncertainty as to whether, and under what conditions, 
    the subdivision would ever have materialized.



[50] 
    The approach requires an estimation of numerous subjective factors such as 
    the number of lots, engineering and other development costs, absorption rate, 
    developer's profit and overhead, and the discount rate. ...



[53] 
    In this case, we do have an approved plan for the
after
scenario.  
    There is some difficulty in establishing a plan for the
before
scenario, 
    as a variety of layouts might have been approved.  We also have the benefit 
    of engineering evidence based on the approved plan and other plans derived 
    from the approved plan. However, despite these factors, the volatility inherent 
    in the Development Approach means that the Direct Comparison Approach is to 
    be preferred except where there is insufficient evidence to support a comparative 
    approach.



...



[55] 
    Faced with no evidence in the
after
scenario but that from the Development 
    Approach we reluctantly rely on this approach to reach a valuation of the 
    property after the taking.  See
Double Alpha Holdings
.  In the
before
scenario, we have evidence based on both the Direct Comparison Approach and 
    the Development Approach; however, the two appraisers conclude relatively 
    similar value from each approach.  For the reasons outlined above we give 
    more weight to the Direct Comparison Approach.



...



[61] 
    Both appraisers have provided a detailed analysis with much information.  
    We are assisted by the three comparables selected by Parkhill, which were 
    considered by both appraisers, although all three are considerably smaller 
    than the subject.  A number of the other comparables were much smaller, at 
    less than 20 acres, and we do not find them useful.  We agree with Parkhill 
    that the 75 acre Hilchey Road property is the best of the three selected comparables.  
    It is true that this sale was not sold on the open market, a portion of it 
    being part of a trade with the Crown.  However, both appraisers, after their 
    various enquiries, were satisfied with the sale price that had been established 
    by two appraisals. ...



[62] 
    A large percentage of the subject property, approximately 25%, is set aside 
    for park and dedicated greenways.  Another 10% of the land is in covenanted 
    greenways that will form part of the residential lots.  For the purposes of 
    comparison, both appraisers deducted the dedicated greenways from their calculations 
    of developable land, as they are an unusual feature of the property and cannot 
    be sold.  For the same reason, they also deducted the detention pond from 
    the Hilchey Road comparable.  Parkhill deducted the park area from the subject 
    and the proposed park and school sites from the comparables.  The
Municipal 
    Act
provides for municipalities to require a developer to transfer a certain 
    percentage of land for parks and schools, or to pay monies in lieu of the 
    land.  We do not see any reason to disagree with Davies' approach of deducting 
    only the unusual features of the properties that could not be developed.  
    The parks and school dedication provisions for all development land are negotiated 
    between the developer and municipality under the same statutory and bylaw 
    framework.



[63] 
    In justifying the adjustment for location, Parkhill analysed a wider range 
    of lot sales than Davies. We agree with his conclusion that there is no reason 
    to make an adjustment for location between the subject property and developments 
    in south Campbell River.  Similarly, we agree with Parkhill's reasons for 
    making a 5% zoning adjustment.  We disagree with Davies' treatment of the 
    adjustments in separate stages, which has the effect of compounding the adjustments.  
    After the time adjustment is made, the other adjustments should be applied 
    concurrently.



[64] 
    There was a significant discrepancy between the two appraisers with respect 
    to the cost of off-site services for the Hilchey Road comparable, the primary 
    sale relied on by Parkhill.  Davies used $1,215,000 while Parkhill used $567,000.  
    The actual costs appear to have been approximately $520,000.  There was not 
    much support for the $1,215,000 figure, although it appears that potential 
    costs of this magnitude had been a possibility at some point during the negotiations.  
    Although the knowledge of the purchaser at the date of purchase is relevant, 
    in this case we do not have sufficient evidence of the purchaser's expectations 
    at the time of purchase to accept the higher amount.  While developers have 
    to consider various risks in determining the price they are willing to pay 
    for a property, we do not accept that they always estimate their price on 
    the most pessimistic assumptions.  We prefer Parkhill's figure for off-site 
    servicing as being closer to the actual costs.  Applying Parkhill's figure 
    for the off site servicing to Davies' analysis, the final value for the Hilchey 
    Road property with this correction only is approximately $34,000 rather than 
    $43,416 per acre.



...



[67] 
    After considering all of the evidence, we find Parkhill's analysis to be the 
    superior of the two appraisals: it is well researched and supported by the 
    data.  We do, however, accept Davies' use of a developable area to include 
    allowances for parks and schools. Parkhill's final adjusted price for the 
    Hilchey Road property is $31,382 per acre for 67.32 developable acres. If 
    this is recalculated using a developable area of 72.57 acres, which includes 
    the park but excludes the detention pond, the final adjusted price for the 
    Hilchey Road property is just over $29,000.  If we add Parkhill's estimate 
    for the contribution of dedicated greenways we conclude a value for the subject 
    property before the taking using the Direct Comparison Approach of $30,000 
    per acre for 187 acres, or $5,610,000.  We note that this value is supported 
    by the adjusted per acre value for the other two selected comparables, especially 
    the Galerno Road property.  The value per acre for the Island Highway property 
    is somewhat lower, perhaps because of the uncertainty surrounding potential 
    development at the time of the sale.



...



[77] 
    There were two significant differences in the method of determining costs 
    of development.  Parkhill's layout utilized a higher percentage of multi-family 
    housing than Davies' plan, requiring less road construction.  Davies applied 
    a per unit development cost charge ("DCC") to all 864 units, while 
    Parkhill contended that the multiple family lots only generated a single DCC 
    prior to being built out.  Davies'
before
value by the Development 
    Approach was $7,810,000; Parkhill concluded $5,485,000.



...



[91] 
    With respect to other aspects of the
before
valuation, we accept Parkhill's 
    analysis for the same reasons as in his
after
scenario.  We find the 
    appropriate
before
value by the Development Approach to be $5,840,000.







[16]

In 
    discussing the after taking value the Board said:

[79] 
    Based on Plan B and the resulting development costs, Davies concluded an
after
value of $4,720,000.  However, he offered an alternate calculation based on 
    Lanarc's Plan D, which resulted in an
after
value of $5,845,000.  Taking 
    the mid point of the values indicated by the two different project schemes, 
    Davies came to a final conclusion of $5,200,000 for the
after
value 
    by the Development Approach.



[80] 
    Parkhill concluded an
after
value for the subject lands of $4,220,000.



...



[87] 
    We have accepted Parkhill's valuation on these main points in the
after
scenario.  In general, we prefer his evidence for this scenario and thus, 
    we find the
after
value of the property to be as the concluded: $4,220,000.







[17]

In 
    the result, the Expropriation Board concluded:

[94] 
    From the Direct Comparison Approach we have found the
before
value 
    of the subject property to be $5,610,000.  Using the Development Approach 
    we have concluded the
before
value to be $5,840,000.  We have decided 
    that more weight should be given to the Direct Comparison Approach.  We acknowledge 
    that there are some weaknesses in the comparable sales: the three most appropriate 
    sales are much smaller than the subject property and there has been some disagreement 
    with respect to the cost for off-site services on the Hilchey Road sale.  
    However, we accept Parkhill's analysis of these factors as described above.
We conclude a
before
value of the subject property of $5,700,000.



[95]
Using the "before and after" method, the difference between our 
    value conclusions for the
before
value of $5,700,000 and the
after
value of $4,220,000 is $1,480,000. The board finds this amount to represent 
    both the market value of the land taken together with the reduction in the 
    market value of the remaining land.
The compensation amount of $1,480,000 
    exceeds the minimum value calculation for the land taken as set out in section 
    40(3) of the
Act
.

(Emphasis added.)







[18]

The 
    appellant contends that these passages, in particular para. 64, demonstrate 
    that the Expropriation Compensation Board used information only available 
    long after the sale of the best comparable property, and thereby demonstrate 
    error.  It says that the effect of referring to after acquired information 
    was to decrease the value per acre of the property by approximately $9,500, 
    or a total of approximately $1.5 million.  They contend that this error became 
    determinative of the value of the land taken because the Board gave more weight 
    in determining the before taking value to the comparison approach but used 
    a different method which did not incorporate this error for the after taking 
    value.  It says that the result was a comparison of apples and oranges, producing 
    inadequate compensation.

[19]

The 
    issue centers on the adjustment made by the Expropriation Compensation Board 
    to the sale price of the Hilchey Road property.  As evident in paras. 62-67 
    quoted above, that price was adjusted by the Board for the effects of time, 
    property size and off-site costs that were required to be expended by the 
    developer of that property.  In particular, the owner of the Hilchey Road 
    property was able, because of a municipal bylaw, to require financial contribution 
    by other property owners, thereby effectively lowering its cost of the property 
    by nearly $9,500 per acre, from $43,416 per acre to $34,000 per acre.  The 
    appellant contends that a purchaser would not have known it could recover 
    some of its costs, and must be found willing to pay the entire purchase price 
    without adjustment for contributions from others, i.e. that the property had 
    a market value to a purchaser of the entire purchase price amount.  The information 
    that the purchaser recovered some costs from others was referred to by Sequoia 
    Springs as "hindsight" evidence relied upon in error by the Expropriation 
    Compensation Board.

[20]

The 
    Expropriation Compensation Board, by comparing the subject property to the 
    Hilchey Road property which it valued at $34,000 per acre, assessed the subject 
    property at $30,000 per acre or $5,610,000 for the entire parcel.  Sequoia 
    Springs contends that based on a higher amount for the Hilchey Road property, 
    the subject property should have been valued at $39,416 per acre, or $7,290,000.  
    It takes no issue with the Board's finding that the after taking value was 
    $4,220,000 for the two remnants parcels.

[21]

So 
    the question for this Court is whether it was reasonable for the Expropriation 
    Compensation Board to consider that a purchaser buying the Hilchey Road property 
    would not have estimated the price on, in its words, "the most pessimistic 
    assumptions".  In other words, was it reasonable on the evidence for 
    the Expropriation Compensation Board to conclude that it should adjust the 
    price of the Hilchey Road property for possible contributions from others 
    to its off-site expenses, such receipt of monies effectively lowering the 
    actual cost to the purchaser of the property?

[22]

Although 
    Sequoia Springs vigorously contends that the Expropriation Compensation Board 
    demonstrated error in considering events that would mitigate a purchase price, 
    in my view that is not so, provided that it is reasonable on the evidence 
    to conclude both that some consideration would have been given by parties 
    to a transaction to the possibility of recovery and that the possibility would 
    be reflected in the purchase price.  Where the evidence establishes that a 
    purchaser could expect such receipts to mitigate its cost, that contingency 
    should be reflected in the decision, consistent with the evidence that was 
    accepted.

[23]

Although 
    Sequoia Springs says that the off-site contribution to costs was an unexpected 
    windfall to the Hilchey Road purchaser, there was, in my view, sufficient 
    evidence to support the Board's conclusion that a purchaser would not make 
    the most pessimistic assumption.  This included evidence that in addition 
    to off-site cost sharing in the Hilchey Road property, there was off-site 
    cost sharing in a development between 1992 and 1995 on another parcel of land 
    used as a comparable property (Galerno Road frontage) and evidence that Sequoia 
    Springs itself contemplated some off-site cost sharing in its development 
    proposal (the pedestrian overpass).  A valuation of the subject property performed 
    for Sequoia Springs by the same appraiser used in the subject proceedings, 
    for purposes of valuing land to support a gift of space to the public, used 
    a lower off-site costs figure ($166,284) than used in the report prepared 
    for these proceedings ($1,215,000).  And an excerpt in evidence from an earlier 
    appraisal put the off-site cost adjustment for Hilchey Road at $405,000.

[24]

In 
    light of the evidence before the Board and the evidence of the nature of the 
    off-site costs required for development of the Hilchey Road property and their 
    benefit to other property owners, it was not unreasonable, in my view, to 
    conclude that a purchaser would not assume the most pessimistic view of its 
    burden on off-site costs.  The Expropriation Compensation Board modestly increased 
    the cost of off-site improvements related to the Hilchey Road property, although 
    not to the level of most pessimistic.  In my view, it was within the exercise 
    of its specialized mandate in doing so.

[25]

I 
    further note that the single comparable of Hilchey Road, while influential, 
    was not the only basis for the Board's before taking valuation.  The Expropriation 
    Compensation Board also considered the evidence of before value based on a 
    development approach.  In doing so, it accepted a value closer to that presented 
    by the expropriating authority than that presented by Sequoia Springs.  That 
    was, in my view, within the ambit of its discretion.  It is trite to observe 
    that the task assumed by the Expropriation Compensation Board is not susceptible 
    to precise calculation and is, as the word assessment connotes, not application 
    of science.

[26]

I 
    conclude, therefore, that the alleged error in valuing the market value of 
    land taken and diminution in value of the remaining lands is not established.

Issue 2  Disturbance Damages and Work Prior to the           Taking

[27]

This 
    is an issue both on the appeal and the cross appeal.

[28]

Sequoia 
    Springs was awarded $10,000 for costs thrown away in the development work 
    of the project, $65,000 for costs thrown away on a sewer extension and $125,000 
    as damages for delay.  Sequoia Springs contends that the sum of $10,000 is 
    inadequate compensation for costs thrown away, and advocates, as it did before 
    the Expropriation Compensation Board, that these damages measure over $2,000,000.  
    It asks that the issue be remitted to the Board to hear additional evidence 
    on the measure of damages and, in any event, to assess damages for equipment 
    rental in work upon the property for residential golf course development, 
    labour to operate the equipment, expenses for materials such as gravel, engineering 
    costs, costs of a consultant and compensation for the owner's time spent on 
    the unfruitful project.

[29]

MoTH 
    contends, as it did below, that the expenditure of funds on the lands taken, 
    and in respect of work on the remnant lands which was of no value once the 
    residential golf course project became impractical, was not proven.  In the 
    appeal, the respondent says that the amount of $10,000 should not be increased 
    and in its cross appeal, contends that the award of $10,000 is in error.

[30]

The 
    Expropriation Compensation Board referred to ss. 34 and 40 of the
Act
, 
    noting that s. 40 provides for compensation "for losses related to the 
    construction or use of the works for which the land was acquired, as well 
    as for losses related to the taking".  It described the claim and the 
    issues in these terms:

[98] 
    A number of expenses and losses claimed by Sequoia Springs predate the taking 
    on March 31, 1995.  These include work done on the subject property which 
    the claimant says were thrown away on golf course development that could not 
    proceed because of the taking. ...



[99] 
    MoTH takes the position that none of the costs and losses incurred prior to 
    the taking can be compensated under either section 34 or 40. It submits that 
    the proper interpretation of these sections is that costs that have arisen 
    before the acquisition cannot be directly attributable to the disturbance 
    of leaving the land nor can they be directly attributable to the taking.  
    They also can not result from the construction of the highway. ...



[101] 
    ... in our opinion, if disturbance damages or business losses are otherwise 
    recoverable, the fact that they occurred before the taking does not preclude 
    their being awarded.



[102] 
    Sequoia Springs claims approximately $2,370,000 for costs thrown away.  The 
    basis for the claim is that the residential golf course development was rendered 
    impractical by the highway.  As a result, all the work and expenses incurred 
    in the preparation of this development should be recoverable. ...



[107] 
    The threshold question is whether the abandonment of the golf course development 
    can be attributed at all to the acquisition for the highway.  If it cannot, 
    then all the relevant disturbance damages claimed by Sequoia Springs must 
    be disallowed, and it becomes unnecessary to consider individual categories 
    of those damages on their own merits.



...



[109] 
    In this case, the fact that the highway raised a serious hurdle for golf course 
    extension means that we are prepared to accept that Sequoia Springs has met 
    the threshold test for claiming disturbance damages that were wasted on golf 
    course development, even if there were other reasons that contributed to the 
    golf course being abandoned.  We will not reject any and all costs thrown 
    away on the golf course out of hand because the highway may not be the sole 
    reason that the golf course was abandoned.







[31]

The 
    Expropriation Compensation Board then addressed the particulars of the claim:

[113] 
    Sequoia Springs' claim for wasted land preparation work on the subject property 
    appears to cover essentially all of its development expenses between its acquisition 
    of the property in 1993 and the opening of the highway in 1997.  The large 
    claim for equipment rentals consisted, in fact, of amounts recorded as paid 
    to another of Brown's companies, which owned the earthmoving equipment.  Sequoia 
    also claimed the wages and benefits paid to the operators of the equipment 
    over the same period.  Finally it had accumulated some 200 invoices from its 
    books for the period which Brown said were related to the development.



[114] 
    The difficulty with all of this evidence was that there was little or nothing 
    to show why the expenses should be considered disturbance damages under section 
    34 or business losses under section 40.  The question for the board is not 
    whether the expenses were incurred (the board has no reason to doubt that 
    they were); rather it is whether they constitute reasonable financial losses 
    which are directly attributable to the taking, to the highway, or to the disturbance 
    caused by the taking.  If they were expenses that Sequoia Springs might have 
    incurred in any event for purposes other than golf course development, then 
    they ought not to be chargeable to MoTH.  Given that any development of the 
    property would have involved clearing, fill, compacting, and grading, the 
    board has to have some basis for deciding which expenses were clearly wasted, 
    and which were not.  Evidence on which the board could make such distinctions 
    was simply not provided.



[115] 
    We accept that Brown intended to put a golf course on the subject at some 
    point.  The issue is how much of the money that Sequoia Springs spent on developing 
    the subject property, including development of a golf course, was, in the 
    end, thrown away because of the highway.  With respect to work on golf course 
    construction, there were only two very schematic and dissimilar drawings before 
    February 1995, by which date most of the work claimed for golf course development 
    was complete. There were no contemporary documents or plans that showed in 
    any detail what was done or what was planned for any golf course residential 
    development on the subject.  The only evidence we had was Brown's testimony 
    describing two or three locations where he said work was done developing a 
    particular fairway.  We have no evidence identifying specific work or a specific 
    time frame for the development of these proposed fairways.  Instead, Sequoia 
    Springs has claimed what seems to be all of the development work on the property 
    until mid 1995 as costs thrown away on the golf course.  We note that the 
    highway route was certain from May 1994.  Without more concrete evidence, 
    we do not believe that Brown would have carried on with work on the subject 
    for the whole of the following year if that work would have no value because 
    of the highway.  Sometime in the spring of 1995 Brown wrote on a draft copy 
    of a Highland Engineering report about the impact of the highway "Would 
    we not be better off to go for fill and cuts rather than overpass as far as 
    return on investment".  We found Brown's evidence with respect to the 
    extent of the development work on the golf course vague.  Stephens of Highland 
    Engineering agreed that, in late 1994, 60,000 to 100,000 cubic metres of sand 
    removed from the right of way was being used as structural fill for roads 
    and housing, not for golf course fairways.  None of Highland Engineering's 
    invoices in evidence for 1994 or 1995 refers to work on the golf course.  
    In re-examination, Stephens stated that during this period he was not retained 
    for surveys for a golf course on the subject property, but for physical development 
    work on the property.  Thus, we do not have any evidence to link any development 
    costs on the property specifically to a golf course.  Further, after considering 
    the evidence that we do have, it appears to us that there is no indication 
    that any of these claimed costs would have been avoided if there had been 
    no highway.







[32]

After 
    further discussion the Board concluded as to equipment rentals, operation 
    of equipment and invoices said to relate to the development:

[118] 
    The onus is on the claimant to prove its damages. Unfortunately it has failed 
    to prove that any of these expenses would fit within sections 34 or 40 of 
    the
Act
.







[33]

On 
    the claim for equipment and materials relating to removal of timber and sand, 
    the Board noted that the value of those materials had not been disclosed and 
    denied the claim.  It awarded $10,000 only for compensation for the salary 
    of a consultant, the equivalent of about two months' salary, and it denied 
    the claim for compensation for the principal of Sequoia Springs, holding:

[127] 
    ... In this case there is no evidence of any loss to Sequoia Springs as a 
    result of Brown's time spent on golf course development.  In any event, we 
    note that there was no evidence of Brown's time spent in any development work 
    that was thrown away.







[34]

In 
    conclusion on costs thrown away the Board held:

[129] 
    We have only awarded $10,000 for costs thrown away.  Although we were given 
    voluminous invoices for what appears to be most, if not all, of the development 
    work on the subject property between 1994 and 1997, there was effectively 
    no effort to show causation between any of the invoices and the taking or 
    the highway.







[35]

In 
    Sequoia Springs' submission, the finding that golf course construction had 
    commenced and that the golf course construction is no longer practical is 
    a finding of loss as it related to all the work done on the remnants and on 
    land now under the highway.  It relies upon
B & A Bobcat and Excavating 
    Ltd. v. Sangha
(1999), 43 C.L.R. (2d) 167 (C.A.); 1999 BCCA 49; and
B.C. Hydro & Power Authority v. Marathon Realty Co.
(1992), 
    89 D.L.R. (4th) 419 (B.C.C.A.), and says that the Board must quantify the 
    loss, difficult as it is to do so.

[36]

Sequoia 
    Springs contends there was ample evidence that work had been undertaken on 
    land now under the highway right of way, including a document from MoTH saying 
    that the area of "the alignment had been extensively cleared in preparation 
    for Mr. Brown's development".  It says, too, that work on the remnants 
    was established and points to photographs showing fairways and tee areas obliterated, 
    submitting that work on the subdivision was effectively wasted because the 
    subdivision has not proceeded.  In its submission, the Board erred in suggesting 
    that proof was required that costs would have been avoided had there been 
    no highway, observing that its position was and is that the costs would still 
    have been incurred, but would not have been thrown away but for the expropriation.

[37]

MoTH 
    contends that the costs thrown away issue concerns only an assessment of the 
    evidence and thus is an issue of fact.  They refer to the high onus on the 
    appellant on a factual issue and say that the onus has not been met in this 
    case.  They say further in the cross appeal that the amount of $10,000 should 
    not have been awarded because it is double recovery, the highest and best 
    use being other than a residential golf course development.

[38]

This 
    issue should be seen, in my view, in two parts, by considering the claim for 
    costs thrown away on the lands taken, and the claim for costs said to be thrown 
    away on the lands still owned by Sequoia Springs.  In case of the lands taken, 
    any expenses incurred by Sequoia Springs on lands taken are surely costs thrown 
    away (apart from the issue of double recovery which I address below).  In 
    the case of the remnant parcels, the question is whether the costs are indeed 
    thrown away, that is, whether it is established that the monies spent are 
    without present benefit.

[39]

Most 
    of the claim for costs thrown away related to the remnant lands.  The Expropriation 
    Compensation Board concluded that monies spent on the remaining lands were 
    not proven to be lost, observing that any development would have required 
    clearing, fill, compacting and grading.

[40]

In 
    my view, this conclusion is not unreasonable.  Despite able submissions on 
    behalf of Sequoia Springs, the conclusion of the Expropriation Compensation 
    Board that these expenses, for the various reasons given, are not established 
    losses is not a decision with which this Court, in my view, should interfere.

[41]

I 
    have come to a different conclusion, however, on those costs expended on the 
    lands taken.

[42]

The 
    Expropriation Compensation Board did not address, expressly, costs incurred 
    on the lands taken.  However, from the photographs in evidence and review 
    of the path of the highway right of way, it is, I consider, clear that some 
    work had been done by Sequoia Springs on the land that was taken.  Disregarding 
    for the moment the issue of double recovery, Sequoia Springs is entitled to 
    be paid for expenses incurred on the lands taken as reasonable business losses 
    caused by the taking.

[43]

Although 
    it may be difficult to quantify that loss, this is no reason to deny the claim 
    in its entirety.  In
B.C. Hydro and Power Authority
,
supra
, 
    Mr. Justice Seaton for this Court held at p. 424:

This 
    is not a case of there not being proof of a loss.  There is proof of a loss 
    but it is one that is difficult to quantify.   The court has an obligation 
    to do so, keeping in mind that the onus is on the plaintiff.   Reference is 
    often made to Chaplin v. Hicks, [1911] 2 K.B. 786 (C.A.), where it is said 
    that if a loss has been established and the quantum is not capable of specific 
    proof it is not only permissible but necessary for the trial judge to do the 
    best he can.







[44]

The 
    principle of
B.C. Hydro and Power Authority
, in my view, is 
    applicable to expropriation, to the effect that upon proof of a reasonable 
    business loss, some award must be made in compensation.

[45]

I 
    turn now to the cross appeal.  MoTH contends that the award of $10,000 is 
    in error because it represents double compensation, because the expense was 
    incurred prior to the expropriation and does not fit within ss. 34 and 40, 
    and because it was not proved that the expenses were incurred.  I would give 
    no effect to the latter submission as it challenges a conclusion of fact which, 
    for reasons expressed earlier as to other factual matters, is not a matter 
    with which this Court should interfere where, as here, there is evidence to 
    support the conclusion.

[46]

I 
    turn to the question of double compensation.  The respondent contends that 
    the Expropriation Compensation Board found that the highest and best use for 
    purposes of compensation for the partial taking was as "a residential 
    development with single and multi-family sites, with substantial green spaces, 
    to be phased in over a number of years".  It says this is inconsistent 
    with its conclusion that the highest and best use of the subject could include 
    a residential golf course development.  It refers to
Horn v. Sunderland 
    Corporation
, [1941] 2 K.B. 26 (C.A.) and
Vision Homes Ltd. v.
Nanaimo (City)
(1994), 54 L.C.R. 103 (B.C.E.C.B.), affirmed 59 L.C.R. 106 (B.C.C.A.).  
    In essence, MoTH says that compensation for the taking was based upon a more 
    valuable use than residential golf course development, and thus damages arising 
    from costs thrown away on golf course development work are not recoverable.

[47]

In 
    my view this submission cannot succeed.  The Board concluded that the highest 
    and best use was as:

... 
    a residential development with single and multi-family sites with substantial 
    park and green space, to be phased in over a number of years.





It 
    also held at para. 111:

... 
    In any event, in our opinion, comprehensive development with mixed used, upon 
    approval for rezoning and subdivision, is a general enough use that it might 
    include mixed housing with greenways or parks or a golf course.  This would 
    mean the highest and best use at the date of acquisition is the same as the 
    existing use.





This 
    conclusion is a finding of fact and should not be lightly disturbed.  Unless 
    that finding of fact is disturbed by this Court, the rule against double recovery 
    referred to in the cases and legislated in s. 31 has no application.  I would 
    not interfere with the finding of highest and best use, it being well founded 
    in the evidence of the nature of the residential development planned before 
    the expropriation.  It follows that I would not accede to the contention that 
    the award of $10,000 or other disturbance damages for work thrown away represents 
    double recovery.

[48]

MoTH 
    also argues that costs incurred before the expropriation are not recoverable 
    as disturbance damages under ss. 34 and 40.

[49]

Section 
    40(1) provides:

40
(1) ... if part of the land of an owner is expropriated, he or she is entitled 
    to compensation for

...

(b) 
    ... to the extent they are directly attributable to the taking ...:

(ii) 
    reasonable personal and business losses.







[50]

Section 
    31 provides:

31
(1) .. the compensation payable is the greater 
    of

(a) 
    the market value of the land based on its use at the date of expropriation 
    plus reasonable damages under section 34, and

(b) 
    the market value of the land based on its highest and best use at the date 
    of expropriation.







[51]

Section 
    34 provides:

34
(1) An owner whose land is expropriated is entitled to disturbance damages 
    consisting of the following:



(a) 
    reasonable costs, expenses and financial losses that are directly attributable 
    to the disturbance caused to the owner by the expropriation;







[52]

The 
    claim for expenses thrown away, in this case, is a claim for expenses that 
    have no benefit to the land owner because of the taking.  In this case, unlike 
    the expenses incurred on the lands retained which may have benefit to Sequoia 
    Springs and thus not represent loss, the monies spent on salary for advice 
    as to the golf course (the $10,000 awarded), now abandoned because of the 
    taking, and monies spent improving the land now under the highway, will bring 
    no benefit to Sequoia Springs.  They are, in my view, disturbance damages 
    under s. 34 or business losses under s. 40(1).  Their characterization as 
    a loss is consistent with the reasoning of this Court in
Patterson v. 
    British Columbia (Ministry of Transportation and Highways)
(1997), 
    62 L.C.R. 89 (B.C.C.A.), see also
Bayview Builder's Supply (1972) Ltd. 
    v. British Columbia (Ministry of Transportation and Highways)
, 1999 
    BCCA 144.  In other words, monies proved to have been spent to improve property 
    under development for its highest and best use, to the extent they are thrown 
    away by the expropriation, represent recoverable loss.

[53]

Lastly 
    on this issue is the question whether costs incurred prior to the actual taking 
    but after knowledge of the impending expropriation, are recoverable.  That 
    is, are the losses reasonable?

[54]

The 
    Expropriation Compensation Board concluded that the salary of $10,000 was 
    a reasonable expense that was recoverable.  I would not interfere with that 
    finding.

[55]

To 
    the extent this issue may be raised concerning monies spent on the expropriated 
    land, and I observe the findings of fact have not been made which would reveal 
    the timing of such work, I would observe that work proven to have been done 
    in furtherance of the existing use, found to be the highest and best, should 
    be compensable. Until the taking occurred, Sequoia Springs was the owner entitled 
    to advance the property's intended use, and the taking, as probable as the 
    parties may have believed it to be, was until the date of taking no more than 
    a plan that could be scuppered by a change within the expropriating authority.

[56]

It 
    follows that I would remit the matter of costs thrown away to the Expropriation 
    Compensation Board for assessment of damages for business loss relating to 
    the lands taken.  On this, Sequoia Springs has asked for an order that it 
    be allowed to adduce further evidence.  That is a question, in my view, for 
    the Board to decide.

Issue 3  Costs

[57]

MoTH 
    cross appeals the order for costs, saying that because the amount awarded 
    is less than 115% of that paid prior to the hearing, and because an offer 
    was made in the form of a
Calderbank
letter, which was for a 
    sum greater than that awarded, the Expropriation Compensation Board erred 
    in awarding costs in favour of Sequoia Springs.

[58]

Section 
    45 of the
Act
deals with costs:

45
...

(3) 
    Subject to subsections (4) to (6), a person whose interest or estate in land 
    is expropriated is entitled to be paid costs necessarily incurred by the person 
    for the purpose of asserting his or her claim for compensation or damages.



(4) 
    If the compensation awarded to an owner, other than for business losses, is 
    greater than 115% of the amount paid by the expropriating authority under 
    section 20 (1) and (12) or otherwise, the authority must pay 
    the owner his or her costs.



(5) 
    If the compensation awarded to an owner is 115% or less of the amount 
    paid by the expropriating authority under section 20 (1) and (12) 
    or otherwise, the board may award the owner all or part of his or her costs.



...







[59]

The 
    costs issue was first decided on the premise that the award exceeded 115% 
    of the advance payments.  The parties subsequently discovered that more had 
    been paid than was known to the Board when it made its order for costs, bringing 
    the sum awarded to 113.6% of the advance payment and under the 115% referred 
    to in s. 45(4).  This made the settlement offer (the
Calderbank
letter) relevant in the eyes of MoTH and it sought to re-open the issue.  
    The Board held that it would exercise its discretion to award costs in favour 
    of Sequoia Springs:

[8]  
    If the mistake in the advance payment is corrected then the total compensation 
    awarded is only 113.6 % of the advance payment. Therefore under section 45(5) 
    we have discretion with respect to costs.



...

[10] 
    The issue of Calderbank settlement letters in expropriation cases was fully 
    addressed by this board in
Baines v.
British Columbia (Minister of Transportation and Highways) (No 2)
(1997), 62 L.C.R. 210. The board concluded at p. 220 in that case:



a 
    Calderbank letter may be one factor in assessing the reasonableness of the 
    owner in pursuing his claim for compensation, keeping in mind the different 
    cost principles applicable in expropriation cases.



The 
    board went on to consider the range of market value put forward by the two 
    appraisers. Since the settlement offer was less than the market value (plus 
    agreed disturbance damages) put forward by the claimant's appraiser the board 
    stated it was "unable to say that the claimant's rejection of the offer 
    ... in the Calderbank letter was unreasonable".



[11] 
    In the present case we note that the market valuation set out in the claimant's 
    appraiser's report was $2,600,000. There were also two substantial claims 
    for disturbance damages. We did not accept the market valuation nor either 
    of the claims for disturbance damages as presented. In fact, in the original 
    February 15, 2000 decision, we were critical of the claimant's evidence and 
    assumptions on a number of points. However, after considering all the circumstances 
    we conclude that there was some reasonable basis for the claimant to expect 
    to obtain more than the $2,300,000 offer to settle in the Calderbank letter. 
    We also note that the settlement letter was received only two working days 
    before the compensation hearing was scheduled to commence. Similar to the 
    board's finding in Baines we are "unable to say that the claimant's rejection 
    of the offer ... in the Calderbank letter was unreasonable".



[12] 
    Further, we note that Sequoia Springs achieved compensation close to the minimum 
    percentage for obtaining full costs as a matter of right. Most importantly 
    it is our opinion that there were justiciable issues in this case which reasonably 
    warranted being brought to the board for determination. See
Daflos v.
School 
    District No. 42 (Maple Ridge-Pitt Meadows)
(1999), 68 L.C.R. 167 (B.C.E.C.B.) at 222. We conclude that the claimant 
    is entitled to its actual reasonable legal, appraisal, and other costs until 
    June 28, 1999 and to its costs as prescribed in the
Tariff of Costs Regulation,
B.C. Reg 189/99 after that date.







[60]

Subsequent 
    to the decision on costs, the Ministry and Sequoia Springs settled the costs 
    issue.

[61]

In 
    its cross appeal MoTH contends that the Board erred in law in awarding costs 
    to Sequoia Springs.  Alternatively, it contends that the order was an unreasonable 
    exercise of the Board's discretion, contending that the Board unlawfully fettered 
    its discretion with respect to costs by failing to consider relevant factors, 
    and that the Board failed to exercise the proper legal principles.  MoTH contends 
    that the Board was obliged to give effect to the
Calderbank
letter, in the same way courts have given recognition to
Calderbank
letters.  They say that the Board erred in its consideration of the timing 
    of the letter, its failure to negatively view Sequoia Springs' exaggerated 
    claim, its consideration of the degree to which advance payments fell below 
    115% of the advance payments, and its view that there were "justiciable 
    issues".

[62]

Sequoia 
    Springs contends firstly that the cost issue is moot.

[63]

In 
    my view, there remains a live issue between the parties on the issue of costs, 
    as I would refer the matter back for reconsideration on the question of costs 
    thrown away on the taken lands.  In any case, I see this as a question which 
    satisfies the criteria for hearing established in
Borowski v. Canada 
    (A.G.)
, [1989] 1 S.C.R. 342.  I would not give effect to this submission.

[64]

I 
    turn then to the substance of the costs issue.

[65]

On 
    the premise that the error is one of law, MoTH contends that the standard 
    of review is correctness.  Alternatively, if seen as an error in the exercise 
    of discretion, it says the standard of review is reasonableness.  Either way, 
    MoTH contends that the Board erred in the factors it did refer to and in failing 
    to accede to the effect of the letter offering settlement.

[66]

Sequoia 
    Springs answers that the costs issue engages the Board's exercise of discretion 
    and that the order should not be disturbed unless the Board was clearly wrong 
    or misdirected itself.

[67]

In 
    my view the costs order engaged the discretion of the Board, and the appeal 
    concerns the exercise of discretion.  In
Baker v. Canada (Minister of 
    Citizenship and Immigration)
, [1999] 2 S.C.R. 817, Madam Justice L'Heureux-Dubé, 
    for the Court, held that the pragmatic and functional approach to review discussed 
    in
Pushpanathan
is equally applicable to discretionary decisions, 
    concluding at para. 56:

56   
    Incorporating judicial review of decisions that involve considerable discretion 
    into the pragmatic and functional analysis for errors of law should not be 
    seen as reducing the level of deference given to decisions of a highly discretionary 
    nature.  In fact, deferential standards of review may give substantial 
    leeway to the discretionary decision-maker in determining the "proper 
    purposes" or "relevant considerations" involved in making a 
    given determination.  The pragmatic and functional approach can 
    take into account the fact that the more discretion that is left to a decision-maker, 
    the more reluctant courts should be to interfere with the manner in which 
    decision-makers have made choices among various options.  However, 
    though discretionary decisions will generally be given considerable respect, 
    that discretion must be exercised in accordance with the boundaries imposed 
    in the statute, the principles of the rule of law, the principles of administrative 
    law, the fundamental values of Canadian society, and the principles of the
Charter
.







[68]

In 
    determining the appropriate stance on reviewing the order, a useful point 
    of reference is this Court's review of cost orders made by a court of law.  
    It is frequently said that appellate courts accord considerable deference 
    to an order of costs, looking only to see that the order fits within the
Rules 
    of Court
and that the discretion has been exercised judicially to 
    avoid injustice, bearing in mind factors articulated over the years.

[69]

In 
    my view, a similar high level of deference to the Board's exercise of its 
    discretion is appropriate given that the discretion established in s. 45(5) 
    is broad, that the issue impacts upon practice before the Board and that the 
    issue engages policy considerations underlying expropriation compensation 
    in this province.

[70]

I 
    turn then to the specific complaints levelled at the decision.  First, it 
    is said, that the Board erred in failing to give effect, as a court might 
    have done, to a
Calderbank
letter [so called in reference to
Calderbank v. Calderbank
, [1975] 3 All E.R. 333].

[71]

MoTH 
    has referred us to the English authorities developing the law on such letters, 
    and
Martel v. Peetoom
(1996), 27 B.C.L.R. (3d) 160 (B.C.S.C.) 
    describing the development of the law of costs in British Columbia as it is 
    affected by offers of settlement.  In short,
Calderbank
letters 
    were given effect in civil litigation in the absence of a rule adequately 
    recognizing efforts to settle in an order of costs.  They continue to have 
    effect in British Columbia, although their application is now somewhat restricted 
    because of changes to the
Rules of Court
.

[72]

MoTH 
    also referred to
Director of Buildings and Lands v. Shun Fung Ironworks 
    Limited
, [1995] 2 A.C. 111 (P.C.) wherein the court held that a
Calderbank
letter should be given effect in a proceeding for compensation for lands that 
    reverted to the Crown (effectively an expropriation).  I would not disagree 
    that an offer of settlement contained in a
Calderbank
style 
    letter may be given weight by the Expropriation Compensation Board.  However, 
    to the extent MoTH urges application of the reasoning in that case to the
Act
at hand and these circumstances, I would not agree that 
    the existence of the
Calderbank
letter is, by itself, determinative 
    of the costs issue.

[73]

The 
    Board, in this case, referred to its prior decision in
Baines v.
British 
    Columbia (Minister of Transportation and Highways) (No. 2)
(1997), 62 L.C.R. 210:

. . 
    . a Calderbank letter may be one factor in assessing the reasonableness of 
    the owner in pursuing his claim for compensation ...







[74]

In 
    my view, this approach is one within the Board's discretion to take.  The
Expropriation Act
is a compensatory scheme.  Its first premise 
    for compensation is that a claimant will be made whole.  It includes a provision 
    for advance payments, and for reimbursement of actual reasonable legal, appraisal 
    and other costs where the award is 115% or more of the advance payments.  
    In this context, the Board concluded that a letter offering settlement is 
    not determinative.  It is obviously, however, a factor to be considered in 
    determining whether all or a portion of costs will be awarded to a person 
    achieving less than 115% of the advance payments.

[75]

MoTH 
    contends that the Board's conclusion that late timing made the offer less 
    worthy of weight, is in error.  I do not agree.  In the context of impending 
    proceedings and the
Act's
requirement of early advance payments, 
    it was fair to call the offer late and to give it less weight in the balancing 
    process.  Likewise, it was appropriate to consider the extent to which advance 
    payments fell short of the award, the strength of the complainant's case and 
    the reasonableness of the claim in the context of the offer.

[76]

MoTH 
    further contends that the reference to "justiciable issues" is in 
    error, imposing a standard which will rarely be missed by a claimant.  The 
    entire passage from the Supplementary Reasons on the issue of costs read:

Most 
    importantly it is our opinion that there were justiciable issues in this case 
    which reasonably warranted being brought to the board for determination.







MOTH's 
    submission, in my view, misses the import of the qualifying words used by 
    the Board: "which reasonably warranted being brought to the Board for 
    determination".

[77]

I 
    conclude that the Board's decision displays an appropriate exercise of its 
    broad discretion awarding costs provided by s. 45(5) in the context of the
Act
as a whole.

[78]

It 
    follows I would dismiss the cross appeal.

Summary

[79]

I 
    would allow the appeal to the extent only of remitting for assessment the 
    issue of costs thrown away on the taken lands.  I would dismiss the cross-appeal.



The Honourable Madam Justice Saunders



I 
    AGREE:







The 
    Honourable Mr. Justice Esson





I 
    AGREE:







The 
    Honourable Mr. Justice Donald



CORRECTION:  
    January 20, 2003

The 
    docket number noted on the front page of the above noted judgment should include 
    the addition of docket number CA028227 directly beneath CA026942.


