British Columbia v. Teal Cedar Products Ltd., 2015 BCCA 263

• Judge: Lowry, Chiasson and MacKenzie, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: May 19, 2015
• Jurisdiction: British Columbia
• Citations: 2015 BCCA 263;(2015), 373 B.C.A.C. 211 (CA)

B.C. v. Teal Cedar (2015), 373 B.C.A.C. 211 (CA);

    641 W.A.C. 211

MLB headnote and full text

Temp. Cite: [2015] B.C.A.C. TBEd. JN.035

Her Majesty the Queen in Right of the Province of British Columbia (appellant/petitioner) v. Teal Cedar Products Ltd. (respondent/respondent)

(CA39893)

Teal Cedar Products Ltd. (respondent/petitioner) v. Her Majesty the Queen in Right of the Province of British Columbia (appellant/respondent)

(CA39894; 2015 BCCA 263)

Indexed As: British Columbia v. Teal Cedar Products Ltd.

British Columbia Court of Appeal

Lowry, Chiasson and MacKenzie, JJ.A.

June 9, 2015.

Summary:

The Forestry Revitalization Act came into force on March 1, 2003, and authorized the Province of British Columbia to take back approximately 20% of the allowable annual cut and associated Crown land base from major forest licensees. The Act reduced the allowable annual cut in three tenures (the Fraser licence; the Lillooet licence; and the tree farm licence) held by Teal Cedar Products Ltd. The Province and Teal settled Teal's compensation for the value of lost harvesting rights, but disagreed on the final compensation for the value of related improvements (1,000 km of roads, associated bridges, culverts, and other structures). The Province advanced $4,000,000 towards the final compensation for improvements. An arbitrator appointed under the Commercial Arbitration Act applied the "cost savings approach" to valuation and awarded Teal $5,150,000, plus compound interest, in addition to the $4,000,000 that the Province had advanced. The arbitrator denied compensation for improvements relating to the Lillooet licence. Both parties applied for leave to appeal the award.

The British Columbia Supreme Court, in a decision reported at [2012] B.C.T.C. Uned. 543, granted the Province leave to appeal the choice of valuation method, but dismissed the appeal on the merits. The court granted Teal's application for leave to appeal the denial of compensation for the Lillooet licence, allowed the appeal and remitted the matter to the arbitrator. The court denied the Province leave to appeal the award of interest. The Province commenced two appeals that were heard together.

The British Columbia Court of Appeal, Finch, C.J.B.C., dissenting, in a decision reported at 340 B.C.A.C. 256; 579 W.A.C. 256, allowed the appeals. The Supreme Court erred in confirming a valuation method that was inconsistent with s. 6(4) of the Forestry Revitalization Act as it was not tied to Teal's interest in the improvements or to Teal's actual loss. Teal was entitled to compensation to the extent that it had suffered financially from the loss of use of improvements in the tree farm licence, and the temporary loss of use of improvements associated with the Fraser licence. The court remitted to the arbitrator the matter of compensation for the improvements relating to the tree farm licence and the Fraser licence with the direction that the valuation method consider the nature of Teal's interest and its actual loss. The court restored the arbitrator's denial of compensation for improvements associated with the Lillooet licence. The court granted the Province leave to appeal the arbitrator's interest award and set aside the award. The Supreme Court of Canada released its decision in Creston Moly Corp. v. Sattva Capital Corp. (Sattva). The Province's appeals were remanded to the Court of Appeal for disposition in accordance with Sattva.

The British Columbia Court of Appeal concluded that the court's prior reasons allowing the appeals were not inconsistent with the decision in Sattva. Upon reconsideration of the appeals, the appeals had to be allowed.

Arbitration - Topic 8301.1

Judicial review (incl. appeals) - Grounds - Question of law - See paragraphs 27 to 39 and 44 to 59.

Arbitration - Topic 8705

Judicial review (incl. appeals) - Practice - Appeals - Standard of review - See paragraphs 27 to 39 and 44 to 59.

Contracts - Topic 7521

Interpretation - Surrounding circumstances - General - See paragraphs 44 to 59.

Forests and Forest Products - Topic 2435.1

Forest regulation - Licensing - Forest licence - Deletion of land - Compensation - See paragraphs 27 to 30.

Forests and Forest Products - Topic 2470

Forest regulation - Timber harvesting - Allowable annual cut reduction - See paragraphs 27 to 30.

Interest - Topic 2021

Agreement to pay interest - What constitutes an agreement to pay interest - General - See paragraphs 44 to 59.

Practice - Topic 8800.2

Appeals - General principles - Duty of appellate court regarding findings of law - See paragraphs 27 to 39 and 44 to 59.

Words and Phrases

Compensation - The British Columbia Court of Appeal considered the meaning of "compensation" as used in s. 6(4) of the Forestry Revitalization Act, S.B.C. 2003, c. 17 - See paragraphs 27 to 29.

Cases Noticed:

Creston Moly Corp. v. Sattva Capital Corp. (2014), 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 1].

Ahousaht Indian Band et al. v. Canada (Attorney General) et al. (2013), 340 B.C.A.C. 204; 579 W.A.C. 204; 2013 BCCA 300, refd to. [para. 2].

United States of America v. Gillingham (2004), 201 B.C.A.C. 26; 328 W.A.C. 26; 2004 BCCA 226, refd to. [para. 2].

R. v. Henry (D.B.) et al., [2005] 3 S.C.R. 609; 342 N.R. 259; 376 A.R. 1; 360 W.A.C. 1; 219 B.C.A.C. 1; 361 W.A.C. 1; 2005 SCC 76, refd to. [para. 33].

British Columbia Hydro and Power Authority v. Workers' Compensation Board (B.C.) (2014), 361 B.C.A.C. 140; 619 W.A.C. 140; 2014 BCCA 353, refd to. [para. 39].

269893 Alberta Ltd. v. Otter Bay Developments Ltd. et al. (2009), 266 B.C.A.C. 98; 449 W.A.C. 98; 2009 BCCA 37, refd to. [para. 42].

Hayes Forest Services Ltd. v. Weyerhaeuser Co. (2008), 250 B.C.A.C. 286; 416 W.A.C. 286; 2008 BCCA 31, refd to. [para. 42].

JEL Investments Ltd. v. Boxer Capital Corp. et al. (2011), 303 B.C.A.C. 79; 512 W.A.C. 79; 2011 BCCA 142, refd to. [para. 42].

Association des parents ayants droit de Yellowknife et al. v. Northwest Territories (Attorney General) et al. (2015), 593 A.R. 180; 637 W.A.C. 180; 2015 NWTCA 2, refd to. [para. 51].

Robb v. Walker (2015), 369 B.C.A.C. 170; 634 W.A.C. 170; 2015 BCCA 117, refd to. [para. 51].

Statutes Noticed:

Forestry Revitalization Act, S.B.C. 2003, c. 17, sect. 6(4) [para. 17].

Counsel:

K.A. Horsman, Q.C., and B.A. Carmichael, for the appellant;

J.J.L. Hunter, Q.C., and M.S. Oulton, for the respondent.

This reconsideration was heard at Vancouver, British Columbia, on May 19, 2015, by Lowry, Chiasson, and MacKenzie, JJ.A., of the British Columbia Court of Appeal. The court delivered the following reasons for judgment on June 9, 2015.