British Columbia v. Teal Cedar Products Ltd., 2013 BCCA 326

• Judge: Finch, C.J.B.C., Lowry and MacKenzie, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: July 10, 2013
• Jurisdiction: British Columbia
• Citations: 2013 BCCA 326;(2013), 340 B.C.A.C. 256 (CA)

B.C. v. Teal Cedar (2013), 340 B.C.A.C. 256 (CA);

    579 W.A.C. 256

MLB headnote and full text

Temp. Cite: [2013] B.C.A.C. TBEd. JL.031

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

(CA039893)

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

(CA039894; 2013 BCCA 326)

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

British Columbia Court of Appeal

Finch, C.J.B.C., Lowry and MacKenzie, JJ.A.

July 10, 2013.

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 appealed.

The British Columbia Court of Appeal, Finch, C.J.B.C., dissenting, allowed the appeal. 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.

Arbitration - Topic 8301.1

Judicial review (incl. appeals) - Grounds - Question of law - See paragraphs 57 and 101 to 121.

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - See paragraphs 101 to 122.

Contracts - Topic 7404

Interpretation - General principles - Ordinary meaning (Golden rule) - General - See paragraphs 123 to 130.

Forests and Forest Products - Topic 2435.1

Forest regulation - Licensing - Forest licence - Deletion of land - Compensation - See paragraphs 50 to 137.

Forests and Forest Products - Topic 2470

Forest regulation - Timber harvesting - Allowable annual cut reduction - See paragraphs 50 to 137.

Interest - Topic 2021

Agreement to pay interest - What constitutes an agreement to pay interest - General - See paragraphs 123 to 130.

Practice - Topic 8800.2

Appeals - General principles - Duty of appellate court regarding findings of law - See paragraphs 57 and 101 to 121.

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 67 to 72.

Cases Noticed:

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 69].

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. 95].

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. 111].

Athwal v. Black Top Cabs Ltd. (2012), 316 B.C.A.C. 296; 537 W.A.C. 296; 2012 BCCA 107, refd to. [para. 112].

Dowling (Greg) Architects Inc. et al. v. Griffin (J. Raymond) Architect Inc. et al. (2012), 327 B.C.A.C. 155; 556 W.A.C. 155; 2012 BCCA 366, refd to. [para. 112].

Easingwood v. Easingwood Estate et al. (2013), 337 B.C.A.C. 66; 576 W.A.C. 66; 2013 BCCA 182, refd to. [para. 112].

Elk Valley Coal Partnership v. Westshore Terminals Ltd. (2008), 254 B.C.A.C. 108; 426 W.A.C. 108; 77 B.C.L.R.(4th) 53; 2008 BCCA 154, dist. [para. 116].

Group Eight Investments Ltd. v. Taddei et al. (2005), 217 B.C.A.C. 184; 358 W.A.C. 184; 47 B.C.L.R.(4th) 278; 2005 BCCA 489, refd to. [para. 120].

Statutes Noticed:

Forestry Revitalization Act, S.B.C. 2003, c. 17, sect. 3(5.1) [para. 86]; sect. 6(4) [para. 50]; sect. 6(5) [para. 85].

Authors and Works Noticed:

Driedger, Elmer A., Construction of Statutes (2nd Ed. 1983), p. 87 [para. 69].

Counsel:

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

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

This appeal was heard at Vancouver, British Columbia, on April 22 and 23, 2013, by Finch, C.J.B.C., Lowry and MacKenzie, JJ.A., of the British Columbia Court of Appeal. The judgment of the court was released on July 10, 2013, with the following opinions:

MacKenzie, J.A. (Lowry, J.A., concurring) - see paragraphs 1 to 137;

Finch, C.J.B.C., dissenting - see paragraphs 138 to 149.