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REPORT Of the Minister of Justice upon the Statutes of the Legislative Assembly of the Province of British… British Columbia. Legislative Assembly 1918

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 REPORT
Of the Minister of Justice upon the Statutes of the Legislative Assembly of the
Province of* British Columbia passed during the Session of 1917.
By Command.
j. d. Maclean,
Provincial Secretary.
Provincial Secretary's Office,
August 12th, 1918.
At Government House,
Victoria,  B.C., 12th June, 1918.
Sir,—I have the honour to transmit to you herewith a report of the Minister of Justice,
dated the 21st May, 1918, duly approved by His Excellency the Governor-General on the 30th
May last, respecting the Acts passed by the Legislature of British Columbia in the year 1917,
7 & 8 Geo. V., which are left to such operation as they may have, with the exception of chapter
67, entitled " An Act to validate certain Sales of Land for Arrears of Taxes," and chapter 71,
entitled " An Act to amend the ' Vancouver Island Settlers' Bights Act, 1904,' " which are
reserved for separate reports.
I have also the honour to enclose herewith a report of the Minister of Justice, dated the
21st May last, approved by His Excellency the Governor-General on the 30th May last,
recommending the disallowance of chapter 71 of 7 & 8 Geo. V. (1917), assented to on the 19th
day of May, 1917, and received by the Secretary of State on the 31st day of May, 1917, entitled
" An Act to amend the ' Vancouver Island Settlers' Bights Act, 1904,' " together with the Order
of His Excellency the Governor-General declaring the disallowance of the said Act, to which
is attached the certificate of His Excellency the Governor-General as to the receipt of the said
Act in the Department of the Secretary of State.
I also have the honour to enclose a report from the Minister of Justice, dated 27th May
last, duly approved by His Excellency the Governor-General on the 30th May last, respecting
an Act to validate certain sales of land for arrears of taxes, passed in the seventh and eighth
years of His Majesty's reign, 1917, and received by the Secretary of State of Canada on the
30th day of May, 1917, and a petition from John Heron et al., praying for the disallowance of
the said Act, which, for the reason stated in the said report of the Minister of Justice, is left
to such operation as it may have.
I have the honour to be,
Sir,
Your obedient servant,
F. S. BABNAKD,
Lieutenant-Governor.
The Honourable the Provincial Secretary.
Certified Copy of a Report of the Committee of the Privy Council, approved by His Excellency
the Governor-General on the 30th May, 1918.
The Committee of the Privy Council have had under consideration the annexed report
from the Minister of Justice, dated 27th May, 1918, upon chapter 67 of the Statutes of British
Columbia, intituled " An Act to validate certain Sales of Land for Arrears of Taxes," passed
in the 7th and 8th year of His Majesty's reign (1917) and received by the Secretary of State
of Canada on the 31st day of May, 1917, and a petition from John Heron et af., praying for
the disallowance of the said Statute. E 2 Eeport on Acts of 1917. 1918
The Minister, for the reasons stated in the said report, recommends that the said Statute
be left to such operation as it may have.
The Committee concur in the report and recommendation of the Minister of Justice, and
advise that a copy hereof and of the accompanying report, if approved, be transmitted to the
Lieutenant-Governor of British Columbia for the information of his Government; also that a
copy be transmitted to the petitioners' solicitor.
All of which is respectfully submitted for approval.
BODOLPHE BOUDBEAU.
Clerk of the Privy Council.
His Honour the Lieutenant-Governor of British Columbia.
Department of Justice,
Ottawa, 27th May 1918.
To His Excellency the Governor-General in  Council:
The undersigned has had under consideration chapter 67 of the Statutes of British
Columbia, passed in the 7th and 8th year of His Majesty's reign (1917) and received by the
Secretary of State for Canada on 31st May last, intituled " An Act to validate certain Sales of
Land for Arrears of Taxes." It is recited by this Act that certain lands were sold for arrears
of taxes under the " Taxation Act," the conveyances of which were executed or delivered before
the expiry of two years from the day of sale; also, that the former Assessment District of New
Westminster was in 1895 divided into two assessment districts—viz., the District of Vancouver
County and the District of Westminster County—and that conveyances of certain lands situate
in the former Assessment District of New Westminster which by the division aforesaid were
comprised in the Assessment District of Vancouver County, but were sold for arrears of taxes
before the date of the division, were executed by the Assessor of the Assessment District of
Westminster County, and that in like manner some conveyances belonging by the division to
the Vancouver District were executed by the Assessor of the Westminster District; that doubts
have arisen as to the validity of these sales and conveyances, and that it is expedient to validate
them. Upon this narrative the Act proceeds to make the conveyances effective notwithstanding
that they were made before the expiry of the statutory period or by the wrong Assessor.
Provisions are introduced, however, for redemption of the lands sold by paying to the Collector,
for the benefit of the purchaser, the purchase price and fair value of improvements, with interest
at 12 per cent, or, if the lands be no longer held by the purchaser, that they may be redeemed
within sixty days from the passing of the Act by paying to the Collector, for the benefit of the
holder of the lands, the amount of the purchase price, the taxes paid by the holder, and the fair
value of his improvements, with interest at the rate aforesaid, and there is provision for arbitration of the value of the improvements in case of difference, and further provisions for the
necessary procedure.
A petition for the disallowance of this Act, dated 30th April last, was presented to Your
Excellency in Council by John Heron, Hugh Heron, and Charlotte Coleman, and copy of this
petition, referred for the consideration of the undersigned, was received at the Department
of Justice on 10th instant. Copy of the petition is submitted herewith, and it states in effect
that the petitioners were interesed in Lots 299, 300, and 301 of Group 1, New Westminster, now
Vancouver District, as residuary legatees of Bobert. Heron, who owned the said lots, and who
died about 13th June, 1904. The petitioners proceed to allege that " on the 22nd July, 1896,
one E. L. Kirkland, an alleged Assessor of the District of New Westminster, unlawfully and
wrongfully, and without the knowledge or consent of the said Bobert Heron or of your
petitioners, purported to sell the said lands for taxes, and on the 22nd July, 1898, purported
to execute a deed of the same to the alleged purchaser, and on the 9th December, 1903, one
W. L. Fagan, an alleged Assessor of the District of Vancouver, unlawfully and wrongfully,
and without the knowledge or consent of the said Bobert Heron or of your petitioners,
purported to sell the lands for taxes, and ou the 23rd February, 1906, purported to execute a
deed of the same to an alleged assignee of the alleged purchaser. 8 Geo. 5 Eeport on Acts of 1917. B 3
" The first-mentioned tax deed bears date one day before the expiry of two years from
the date of the tax sale—the Statute allows the deed to be made only after that period has
elapsed—and the person who executed it was not the Assessor for the County of Vancouver,
in which the land was situated, but the Assessor for the County of Westminster, who had no
authority or jurisdiction whatever in the matter.
" As to the secondly mentioned tax sale, one of the executors of the will of the said
Bobert Heron, on the 12th October, 1904, made lawful tender to the said W. L. Fagan; but the
said Fagan refused to permit the lands to be redeemed, unless under the title supposed to have
been acquired by virtue of the first sale.
" At the request of your petitioners the said executors did, by deed under seal dated 31st
July, 1913, grant and convey the said lots to your petitioners."
It appears, moreover, that the petitioners brought an action in the Supreme Court of
British Columbia on 30th September, 1913, claiming a declaration of title, and that the
conveyances were void; that they failed in this action at the trial and upon appeal to the
Court of nlppeal for British Columbia, but that on appeal to the supreme Court of Canada it
was decided, reversing the judgments below, that the sales and conveyances in question were
null and void, and that the deeds should be struck off the registry. The property in question
is said to be worth $15,000, and the petitioners claim " that the said Act (a) is unjust and
contrary to sound principles of legislation; (b) confiscates private vested rights without providing for compensation, and is, therefore, an irreparable injustice; and (c) unduly interferes
with private rights and property which has been held by the highest Court of last resort in
the Dominion to belong to your petitioners."
When the petition came to be considered in due course in the Department, the Deputy
Minister of Justice on 20th instant telegraphed the Attorney-General of British Columbia, as
the time limited was not adequate for correspondence through the usual channels, as follows :—
" John Heron, Hugh Heron, and Charlotte Coleman present petition for disallowance of
' Tax-sale Validation Act,' chapter sixty-seven of nineteen seventeen, upon ground that
petitioners' title to Lots Two hundred and ninety-nine, Three hundred, and Three hundred and
one, Group One, New Westminster District, established in litigation by judgment of Supreme
Court of Canada of twenty-fourth June, nineteen sixteen, declaring tax sale and deed to
British Columbia Land and Investment Agency null and void. Petitioners allege these lots worth
fifteen thousand dollars and that Act iu question operates to reverse judgment of Supreme
Court and confiscate petitioners' property. Please telegraph for information of Minister of
Justice any observations which your Government desires Minister to consider in reporting
upon petitioners' application.    Time for disallowance expiring."
On 24th instant the Deputy Minister, having -received no reply, again telegraphed the
Attorney-General, as follows:—
" Beply to my telegram twentieth instant re ' Tax-sale Validation Act,' urgently required,
and in this connection please state whether your Government would undertake to promote
amendment at next session providing that rights adjudicated or in pending cases shall not be
prejudiced or affected by the provisions of this Act; and afterwards on the same day the Deputy
Minister received a reply from the Attorney-General to his first message, dated 23rd instant,
reading as follows :—
" Beplying your telegram twentieth, we consider ' Tax-sale Validation Act,' chapter sixty-
seven of nineteen seventeen, fully justified under existing circumstances. Legislature considered
matter fully and came to conclusion that the Heron suit, as well as several other suits then
pending, possessed no real merit, as these suits placed in jeopardy titles of bona-ftde purchasers,
who had been in possession for years after having purchased at tax sale. There seemed to be
no good reason, for placing cases in litigation on a higher place than others. The circumstances
were peculiar. Purchasers at a tax sale held years ago in the former Assessment District of
New Westminster had tax deeds given to them one day too soon; in addition, they were
executed by the wrong Assessor owing to a division of the district in 1S95 to New Westminster
County and Vancouver County. In the case of Heron vs. Lalonde, the heirs of the original
owners, who allowed taxes to accumulate, with the result that their lands were sold for taxes
to bona-fide purchasers, asked for a declaration that the tax-sale deed was a nullity and that
they should be declared the true owners on the technical grounds referred to, notwithstanding
that in the meantime the purchasers were in occupation for years, the land greatly improved E 4 Eeport on Acts of 1917. 1918
in value, or possibly changed hands several times. The only ground for urging that this
legislation should not affect the case of Heron vs. Lalonde would be that the Legislature should
have a higher regard for the law costs which the plaintiffs incurred in the litigation than for
the undoubted rights of the purchasers. They, doubtless, incurred some costs, but they were
incurred in an effort to deprive bona-fide purchasers of their just rights, and their diligence in
that respect should not be regarded. Further, as a matter of fact, the case of Heron tis.
Lalonde was not concluded, as it might still go to the Privy Council, and I understand that
was the intention of the defendants. We did, however, provide by this Act that the original
owners might redeem by paying for the use of the purchasers the purchasers' price, taxes, and
the value of improvements, the same to be fixed by arbitration, giving them sixty days to do
so, a period quite long enough to give parties who had no moral or equitable claim to the
property. The situation was intolerable, and, as stated, hundreds of other cases were in a
similar position; we did not discriminate between titles in litigation and titles in which litigation
was not pending. Why should those who started unmeritorious litigation be placed in a better
position than others, or be allowed to get away with the fruits of litigation based on the technicalities referred to? If the Act were not passed, not only would many titles be imperilled, but
it would have affected loan securities, and investments as well. Further, these titles given to
bona-fide purchasers were Government titles and not municipal titles. They are signed by the
Government Assessor as an official deed of the Crown in the right of the Province. It was
incumbent on the Crown to protect its titles doubly, so when the mischief was caused by the
Government's division of the assessment district and the Act of its own Assessor in signing the
deed a day too soon. It is submitted that there is ample precedent for allowing Provincial
legislation overriding judgment of the Court to stand, and that following the practice laid down
in the past by your Department, legislation within the competence of Provincial Legislature
should not be disallowed on ground of alleged hardship."
Although the undersigned does not find himself in agreement with all these observations of
the Attorney-General, it is true that the situation which the Attorney-General describes was a
proper one for legislative action. Titles have been transferred for arrears of taxes in intended
execution of statutory powers, and presumably the proceeds of these sales have been appropriated
or distributed conformably to statutory requirements. There seems to have been considerable
difference of judical opinion, but in the result the conveyances have been declared invalid for
defective procedure. It is not suggested that the taxes were not justly due; that the lands were
not chargeable, or that they would have been redeemed previously to sale if the sales had taken
place at the time, or if the conveyances had been executed by the officer authorized by Statute.
The judgment of the Supreme Court directed that there should be no costs to either party in
that Court or in the Courts below, and the* Statute contains a provision, such as it is, enabling
the former proprietors to redeem their lands upon compliance with the conditions prescribed by
the Statute. In these circumstances, the undersigned is of opinion that Your Excellency in
Council would not be justified to interfere with the operation of the Validating Act, merely
because of the absence of provisions which would have commended themselves to Your Excellency
in Council for the better protection of litigants in pending cases, or of those who had already
succeeded to have their claims judicially established.
The undersigned recommends, therefore, that the Statute be left to such operation as it may
have, and that a copy of this report, if approved, be transmitted to the Lieutenant-Governor of
British Columbia for the information of his Government; also that a copy be transmitted to the
petitioners'  solicitor.
Humbly submitted.
(Signed.)    Charles J. Doherty.
Minister of Justice.
Certified Copy of a Report of the Committee of the Privy Council, approved by His Excellency
the Governor-General on the 30th May, 1918.
The Committee of the Privy Council have had under consideration the annexed report of the
Minister of Justice, dated 21st May, 1918, upon the Statutes of the Legislature of British
Columbia passed in the year 1917, 7 & S Geo. V. 8 Geo. 5 Eeport on Acts of 1917. E 5
The Committee concur in the views of the Minister of Justice as set out in the said report,
and, on his recommendation, advise that a copy hereof and of the accompanying report, if
approved, be transmitted to the Lieutenant-Governor of British Columbia for the information of
his Government.
All of which is respectfully submitted for approval.
BODOLPHE BOUDBEAU.
Clerk of the Privy Council.
His Honour the Lieutenant-Governor of British Columbia.
Department of Justice,
Ottawa, May 21st, 1918.
To His Excellency the Governor-General in Council:
The undersigned has had under consideration the Statutes of the Legislature of British
Columbia passed in the year 1917, 7 & S Geo. V., and he is of opinion that these Statutes may
be left to such operation as they may have, with the exception of chapter 67, entitled " An Act
to validate certain Sales of Land for Arrears of Taxes," and chapter 71, entitled " An Act to
amend the ' Vancouver Island Settlers' Bights Act, 1904,' " which are reserved for separate
reports.
'As to chapter 76, entitled " An Act to amend the ' Vancouver Incorporation Act, 1900,' " the
undersigned has had under consideration a complaint submitted to the Prime Minister by Messrs.
Geo. D. Atkin & Co., of London, enclosing copy of a circular letter of 14th July last, addressed
by the Secretary of British Columbia Electric Bailway Company, Ltd., on behalf of the directors,
to the shareholders of the company, explaining to the shareholders that by virtue of the legislation in question the City of Vancouver will be permitted to compete in the supply of electric
light and power after 1st June, 1919. It would appear that the city had applied to the Legislature in 1900 for reconsideration of its Act of Incorporation with a view to obtain, among
other objects, the repeal of a provision prohibiting competition with the company except upon
condition of willingness to treat for the acquisition of the company's franchise. This application
was opposed on behalf of the company, and in the result a compromise was reached, satisfactory
at the time to both parties, whereby legislation was enacted which contains certain limitations
against competition. These limitations have now been withdrawn by the legislation in question,
and it is upon that account that Messrs. Atkin & Co. protest against the legislation as affecting
investors.
LTpon consideration of the correspondence submitted, the undersigned concludes that the
rights of the company, depending merely upon antecedent legislation, were such as the Legislature might change in the execution of its constitutional powers, and that Your Excellency in
Council is not required to justify or to become responsible for the policy of the legislation in
declining to exercise the power of disallowance upon the grounds suggested.
The undersigned recommends that a copy of this report, if approved, be transmitted to the
Lieutenant-Governor of British Columbia for the information of his Government.
Humbly  submitted.
(Signed.)    Cha.rles J. Doiierty.
Minister of Justice.
Certified Copy of a Report of the Committee of the Privy Council, approved- by His Excellency
the Governor-General on the 30th May, 1918.
The Committee of the Privy Council have had under consideration the annexed report from
the Minister of Justice, dated 21st May, 1918, recommending, for the reasons therein stated, that
the Statute of the Legislature of British Columbia, chapter 71 of 7 & 8 Geo. V. (1917), assented
to on the 19th day of May, 1917, and received by the Secretary of State for Canada on the 31st
day of May, 1917, intituled " An Act to amend the ' Vancouver Island Settlers' Bights Act,
1904,' " be disallowed.
The Committee concur in the views of the Minister of Justice as set out in the said report,
and advise that the said Act be disallowed accordingly. E 6 Eeport on Acts of 1917. 1918
The Committee, on the recommendation of the Minister of Justice, further advise that a
copy hereof and of the accompanying report, if approved, be transmitted to the Lieutenant-
Governor of British Columbia for the information of his Government; also that copies be transmitted to the petitioners, the Esquimalt & Nanaimo Bailway Company, Canadian Collieries,
Limited, and the National Trust Company, Limited.
All of which is respectfully submitted for approval.
BODOLPHE BOUDBEAU.
Clerk of the Privy Council.
His Honour the Lieutenant-Governor of British Columbia.
Ottawa, 21st May, 1918.
To His Excellency the Governor-General in Council:
The undersigned has had under consideration a Statute of the Legislature of British
Columbia, chapter 71 of 7 & S Geo. V. (1917), assented to on 19th May, 1917, and received by
the Secretary of State for Canada on 31st May, intituled " An Act to amend the ' Vancouver
Isfand Settlers' Bights Act, 1904.' " This is a very short Act, consisting of two sections, which
are here reproduced as follows :—
" 1. This .icf may be cited as the ' Vancouver Island Settlers' Bights Act, 1904, Amendment
iict,  1917.'
" 2. Section 3 of the ' Vancouver Island Settlers' Bights Act, 1904,' being chapter 54 of the
Statutes of 1904, is hereby amended by striking out the words ' within twelve months from the
coming into force of this Act' in the second and third lines of said section, and inserting in lieu
thereof the words ' on or before the first day of September, 1917.' "
It will be observed that this amendment, upon the face of it, merely extends to the 1st day
of September, 1917, a time which had been limited by the " Vancouver Island Settlers' Bights
Act, 1904," and by reference to the latter Act it will be perceived that the time so limited had
expired on 10th February, 1905. But involved in this very simple legislative expedient is an
invasion of valuable proprietary rights which has occasioned an application for disallowance
based  upon  irresistible grounds.
The Act of 1904 recites an intention to make provision for persons who had settled upon
lands within the belt reserved for railway purposes on Vancouver Island by Order iu Council of
30th June, 1873, for the purpose of implementing section 11 of the Terms of Union upon which
British Columbia entered the Confederation, and that the said settlers are entitled to peaceable
and absolute possession of the land occupied by them and title thereto in fee-simple in accordance
with the Statutes of British Columbia at the time existing governing the disposal of public lands;
and it proceeds to enact that upon application on behalf of any settler to the Lieutenant-Governor
in Council within twelve months from the coming into force of the Act, which was assented to
on 10th February, 1904, showing that the settier had occupied or improved land within the
Bailway Belt prior to the enactment of the " Settlement Act" of 1883, cap. 14 of 47 Vict., with
the bona-fide intention of living on the said land, accompanied by reasonable proof, a grant of
the fee-simple in such land should be issued to him or his legal representative, free of charge,
and in accordance with the provisions of the "Land Act" in force at the time when said land
was first occupied or improved by the settler; and, moreover, that the rights granted to the
settlers under the said Act should be asserted by and defended at the expense of the Crown.
Application for the disallowance of the Act of 1004 was made to His Excellency the
Governor-General in Council upon petition of the Esquimalt & Nanaimo Bailway Company,
setting forth, as the fact was, that the lands within the Bailway Belt were granted to the
Dominion Government for the purposes of constructing and to aid in the construction of a
railway between Esquimalt and Nanaimo; that the Dominion had contracted by statutory
authority for the construction of the railway upon terms that these lands, in so far as they
might be vested in Her late Majesty, or held by Her Majesty for the purposes of constructing or
to aid in the construction of the railway, should be conveyed to the contractors upon completion
of the work to the satisfaction of the Governor in Council; that it was, moreover, agreed by the
contract that the land was to be granted to the company subject to the stipulation, proviso, or
exception, inter alia, that every bona-fide squatter who had previously occupied or improved any 8 Geo. 5 Eeport on Acts of 1917. B
of the said lands for a period of one year prior to the 1st day of January, 18S3, should be
entitled to a grant of the freehold of the surface rights of the said squatted land to the extent
of 160 acres, at the rate of $1 per acre; that the Esqui-malt & Nanaimo Bailway Company
completed the work to the satisfaction of the Governor in Council and* received from the
Dominion a grant of the lands, subject to the statutory terms and provisions. Upon these and
other allegations, which will appear upon reference to the papers herewith, the Esquimalt &
Nanaimo Bailway Company submitted that the-Act should be disallowed as affecting an unjust
confiscation of the company's rights in the property. No question was suggested as to the rights
which by the legislation of 1883 the squatters were recognized to possess, and hy which the
title of the company was affected, but it appeared that the squatters were not satisfied with
the provision made for them, and that they had agitated claims which had been the subject of
investigation, with the result that they were found entitled to further consideration by the
Provincial authorities. These facts were set up by the Government of British Columbia in reply
to the petition presented by the company, and the Government endeavoured to justify the
legislation by the submission 'of an argument intended to show that certain settlers who had,
previously to the " Settlement Act" of 1883, recorded tracts of unoccupied, unsurveyed, and
unreserved Crown lands had acquired a right by the legislation then in force to obtain title to
the lands so recorded; that this right continued irrespective of the provisions of the " Settlement Act," or was not affected by those provisions, and that the Legislature did not thereby
convey to the Dominion any lands within the Bailway Belt to which the settlers had lawful
claim; it was suggested that the alleged right of these settlers, although, in the absence of
further legislation, incapable of vindication at their own suit, could be asserted by action
brought either by the Attorney-General on behalf of the Province, or by the settlers themselves
with the aid of a Provincial legislative grant, and it was the latter course, as stated by the
Provincial reply, which commended itself to the Advisers of the Lieutenant-Governor.
It may be observed here, without inquiring further into the merit of this argument, that,
whatever weight the argument may possess as to settlers of the description to which it applies,
the settlers who are benefited by the Act of 1904 are defined to mean those persons " who prior
to the passing of the said Act (chapter 14 of 47 Vict.) occupied or improved lands situated within
the said Bailway Belt with the bona-fide intention of living thereon," and that settlers of this
description are not distinguishable from those who are otherwise named squatters.
By the report of the Minister of Justice upon the application for the disallowance of the
legislation of 1904, approved by His Excellency in Council on 21st June of that year, the Minister
stated that it was unnecessary to enter minutely into the history of the Bailway Belt; that it
was sufficient to state that it was set apart in pursuance of the Terms of Union with British
Columbia to be appropriated in furtherance of the construction of the proposed railway to
connect British Columbia with the Eastern Provinces; that by the " Settlement Act " of 1S83 the
Bailway Belt was granted to the Dominion Government for the purpose of constructing and to
aid in the construction of the Esquimalt & Nanaimo Bailway; that the Dominion in turn had
granted the property to the company, and that under these circumstances, if the Act would
have the effect apprehended by the Bailway Company of divesting the company of its title
granted by the Government of Canada in respect of any of the lands in the Belt, the Minister
would feel it to be his duty to recommend disallowance in order to prevent the consummation of
such an injustice. The Minister considered, however, that the Act could not have this effect for
reasons which he stated; but unfortunately it transpired ultimately by the judgment of the
Judicial Committee of the Privy Council in the case of McGregor vs. Esquimalt & Nanaimo
Bailway Company, 1907 .\ppeal Cases, 462, that the Provincial grants authorized by the Statute
did operate to convey the fee-simple, notwithstanding the previous transfers or conveyances as
between the Governments and as between the Dominion and the respondent company. In the
meantime the Esquimalt & Nanaimo Bailway Company, which had been constructed and was
being worked under Provincial powers, was by Dominion Statute of 1905 declared to be a work
for the general advantage of Canada, and the Provincial powers of legislation with regard to
the company were thereby transferred, but this circumstance was, upon ordinary principles, held
not to affect the consideration of rights in the pending case. Subsequently, in view of the result
of the litigation, the company succeeded in obtaining from the Government of British Columbia
an agreement of indemnity or for compensation in respect of the lands of which the company B 8 Eeport on Acts of 1917. 1918
had been thus deprived, and this arrangement is evidenced by Provincial Statute, chapter 17 of
1910, which does not, however, extend to provide any compensation for the loss to which the
company is subjected by the operation of the present Statute.
The Esquimalt '& Nanaimo Bailway Company, the Canadian Collieries (Dunsmuir L Limited,
and the National Trust Company, Limited, have now submitted a joint petition for disallowance
of the Statute, chapter 71 of 1917, copy of the petition submitted herewith, and these companies
represent that the legislation constitutes an undue interference with the policy of the Dominion
in respect of the disposition whereby in the general public interest the Bailway Belt was made
available to the Esquimalt & Nanaimo Bailway Company in consideration of the building of the
railway, abrogating pro tanto the agreement between the Dominion and the Province of 1883,
and derogating from the grant made by the Dominion to the Bailway Company in pursuance of
the general arrangement, and, moreover, divesting the Bailway Company and the Canadian
Collieries, claiming under the company, as well as the bondholders represented by the Trust
Company, of a very valuable portion of their assets or security; the lands in question being
coal-bearing lands of great value, either as ascertained or iii prospect.
Upon reference of the petition for the consideration of the local Government the Attorney-
General of the Province submitted in reply a memorandum, copy herewith, in which he urges
that the amending Act involves no pplnciple not sanctioned by the Act of 1904, and that, since
the latter Act was permitted to remain in operation, Your Excellency's Government, for the sake
of consistency, should reject the petitioners' claim. The Attorney-General, however, relies
principally upon the fact, which the petitioners indeed may admit without affecting their case,
that the settlers had claims which were entitled to be considered, and that this fact was
recognized not only locally, but by the Government of the Dominion, which issued a Commission
in 1897 to inquire into the matter. The Commissioners' report is quoted, finding that, although
the settlers, speaking generally, had no legal claim to the coal and other, minerals under their
lands, they had a just claim for redress at the hands of the Province, which it was the duty of
the Province to accommodate. Upon these findings the Attorney-General contends, remarkably
enough, that the legislation is in keeping with the policy of the Dominion, because the Dominion
caused the claims of the settlers to be investigated, and in execution of the duty and obligations
of the Province, because it was found that the Province should compensate the settlers. He
urges, moreover, that the Act is intra vires of the Province, which is not denied, and that
disallowance would involve a serious interference with Provincial rights.
The petitioners having expressed a desire that counsel should be heard on their behalf, an
appointment was made, in exception to the ordinary procedure for consideration of applications
for disallowance, and the Attorney-General was notified as well as the petitioners. The argument was heard before the Prime Minister, the undersigned, and the Minister of Public Works,
counsel representing the three petitioning companies, and also, in opposition, the Granby
Consolidated Mining, Smelting, and Power Company, Limited, which is understood to claim
under grants issued by the Province pursuant to the authority of the Act under consideration.
The Attorney-General of British Columbia was not represented, but presumably the Granby
Company was notified by the Attorney-General, and represented view7s with which he was in
accord. At the hearing the matter was very fully discussed, and the principal argument
presented in support of the legislation on behalf of the Granby Company, which was the only
interest appearing to uphold the legislation, was that the settlers' claims had been of long
standing, antedating in their origin the legislation under which the title passed from the
Province to the Dominion, and from the Dominion to the Esquimalt & Nanaimo Bailway Company ; that the quieting of these claims was eminently a proper matter for disposition by the
local Legislature, and that Your Excellency's Government ought not to review the conclusions
reached and Provincially sanctioned for the settlement of these claims.
On the other hand, it was urged, and in fact it was not denied, that the company had
received its land grant in pursuance of the agreement of the Government of Canada founded
upon legislation sanctioned by the Dominion and the Province, which defined precisely the
measure of the settlers' claims; that large pecuniary interests were involved, and that the
companies were not in anywise responsible for the settlers' claims, or affected by them, otherwise than in so far as the Act in question, or the exercise of the powers conferred by the Act,
might operate to transfer the title or diminish the area of the company's coal-bearing lands. 8 Geo. 5 Eeport on Acts of 1917. E 9
It will be observed that, although after the effect of the Statute of 1904 had been judicially
declared, an agreement was reached between the Bailway Company and the Province, as
evidenced by the Statute of 1910, to afford the company a measure of compensation for the loss
which it had suffered through the operation of the Act; no provision is now made or suggested
to compensate for the loss which the petitioners suffer by reason of the further grants issued
under the authority of the present legislation, and, indeed, it is urged on their behalf that it is
impossible in the present state of development of the property to realize the loss to which they
are subjected by reason of the granting of their lands and mineral rights by the Province under
the authority of the Statute.
' In these circumstances the question which presents itself for Your Excellency's consideration
is whether it is compatible, with a proper fulfilment of the duty charged upon Your Excellency
in relation to the power of disallowance, that the Act now in question should be permitted to
remain in operation.
It will be perceived by review of the reports of the Ministers of Justice from the Union to
the present time that there has been great reluctance to interfere with Provincial legislation,
and that, notwithstanding a considerable number of cases in which disallowance was sought upon
established grounds, perhaps not -more than a single Statute has been actually disallowed by
reason merely of the injustice of its provisions. Cases are not lacking, however, in which
disallowance has been avoided by reason of amendments undertaken by the local authorities,
upon the suggestion of the Ministers of Justice, to remedy the complaints against the original
Acts; and certainly the constitutional propriety and duty of reviewing Provincial legislation
upon its merits when it is the subject of serious complaint has been maintained by every
succeeding Minister of Justice from the time of the Union, save only the immediate predecessor
of the undersigned, who suggested in effect that the power had become obsolete. In the opinion
of the undersigned the power is unquestionable and remains in full vigour. Indeed, the very
careful consideration which the Ministers have been accustomed to give to applications presented
from time to time for disallowance depending upon reasons of inequality or hardship is inconsistent with any other view. But although the Governor in Council exercises constitutionally a
power of review and control, he is certainly not responsible for the policy, wisdom, or expediency
of Provincial legislation, and therefore he should not disallow merely because an Act is in his
judgment ill-advised, untimely, or defective; or because its project lacks either in principle or
detail that degree of equity and consideration of the existing situation which in the opinion of
the Governor in Council should have commended itself to the Legislature. Indeed, it must be
realized in the exercise of the power of disallowance that legislative judgment upon Provincial
matters is committed to the Legislatures and not to Your Excellency in Council, and that the
former therefore have a reasonable and just degree of freedom to work out their measures of
legislation in the manner which the legislatures deem requisite or advisable or best adapted
reasonably to provide for the situation in hand. On the other side, it cannot he denied that
there are principles governing the exercise of legislative power, other than the mere respect and
deference due to the expression of the will of the local constituent assembly, which must be
considered in the exercise of the prerogative of disallowance. It may be difficult, and it is not
now necessary to define these principles for purposes of general application; certainly, although
legislative interference with vested rights or the obligation of contracts, except for public
purposes and upon due indemnity, are processes of legislation which do not appear just or
desirable, nevertheless, it would, in the opinion of the undersigned, be formulating too broad a
rule to affirm that local legislation affected by these qualities should in all cases be displaced by
means of the prerogative.
The present case is, however, of very exceptional character, and it must fall within any
just limitation of the rule. There can be no doubt about the intention of the enactment having
regard to the sequence and history of the legislation. A large area of valuable land was transferred by the Province to the Dominion destined and appropriated by statutory arrangement
and sanction as between the two Governments for the benefit of the Esquimalt & Nanaimo
Bailway Company, which undertook the burden of constructing and operating the railway.
These lands were in turn transferred by the Dominion to the company upon the terms of its
contract. The stipulations as to title were precise and definite, and the situation, claims, or
rights of settlers and squatters were particularly considered and provided for.   The settlers were accorded the right to obtain grants of 160 acres for a period of four years upon payment of
$1 per acre, and squatters who had been on the land for the purpose of improving it for at least
one year were entitled to receive the surface rights only of 160 acres each upon payment of the
like price. Subject to these conditions the lands passed to the company, and the company is
certainly justified to look not only to the Province, but also to the Dominion, with whom it
contracted and from whom it received its grant, to see that its title is not impaired by legislative
revision of the terms after performance of the contract hy which the lands were earned. The
identic legislation on the part of the Province and of the Dominion of 1883 evidences a matter
of Dominion as well as of local policy which has its foundation in the terms upon which British
Columbia entered the Union, by which, in consideration of the construction, equipment, and
undertaking to operate and maintain the railway, the company received the statutory subsidies,
including the lands in question, subject to the special accommodation of the claims of settlers
and squatters, for which provision was expressly made; and the process by which, notwithstanding these solemn assurances, a valuable portion of the property which it was thus intended
that the company should receive, and which the company did receive, is taken away by the
exercise of the legislative authority of one of the parties to the tripartite agreement cannot
adequately be characterized in terms which do not describe an unjustifiable use of that authority,
in conflict with statutory contractual arrangements to which the Government of Canada as well
as the Province was a party. The Bailway Company, the Collieries Company, as assignee of
some of these lands, and the bondholders who have loaned their money to assist in the operation
of the mines upon security of a statutory title, the most conclusive which the law knows, submit
their case for the consideration of Your Excellency in Council; they invoke the powers conferred
by the " Constitutional Act" ; and the undersigned, in agreement with his predecessor of 1904,
considers that both the proper execution of these powers, and the obligation of honour and good
faith in the administration of the transaction on the part of Your Excellency in Council, require
that the Province should not be permitted substantially to diminish the consideration of the
contract.
Upon the submission of the Attorney-General that disallowance would involve a serious
interference with Provincial rights, the undersigned observes that Provincial rights are conferred
and limited by the " British North America Acts," and while the Provinces have the right to
legislate upon the subjects committed to their legislative authority, the power to disallow any
such legislation is conferred by the same constitutional instrument upon the Governor-General
in Council, and incident to the power is the duty to execute it in proper cases. This power and
the corresponding duty are conferred for the benefit of the Provinces as' well as for that of the
Dominion at large. The system sanctioned by the Act of 1867, as interpreted by the highest
judicial authority, " provides for the federated Provinces a carefully balanced constitution, under
which no one of the parts can pass laws for itself, except under the control of the whole acting
through the Governor-General." The mere execution of the power of disallowance does not
therefore conflict with Provincial rights, although doubtless the responsibility for the exercise
of the power which rests with Your Excellency in Council ought to he so regulated as not to be
made effective except in those cases in which, as in the present case, the propriety of exercising
the power is demonstrated.
The undersigned recommends, therefore, that the said Statute, chapter 71 of 1917, intituled
" An Act to amend the ' Vancouver Island Settlers' Bights Act, 1904,' " be disallowed, and that a
copy of this report, if approved, be transferred to the Lieutenant-Governor of British Columbia
for the information of his Government; also that copies be transmitted to the petitioners, the
Esquimalt & Nanaimo Bailway Company, Canadian Collieries, Limited, and the National "Trust
Company, Limited.
Humbly submitted.
(Signed.)    Charles J. Doherty.
Minister of Justice. 8 Geo. 5 Eeport on Acts of 1917. E 11
AT THE GOVERNMENT HOUSE AT OTTAWA.
Thursday, the 30th day of May, 1918.
Present :
HIS EXCELLENCY THE  GOVERNOR-GENERAL IN COUNCIL.
Whereas the Lieutenant-Governor of the Province of British Columbia, with the Legislative
Assembly of that Province, did on the 19th day of May, 1917, pass an Act, chaptered 71, and
intituled " An Act to amend the ' Vancouver Island Settlers' Bights Act, 1904 ' " :
And "whereas the said Act has been laid before the Governor-General in Council, together
with a report from the Minister of Justice, recommending that the said Act should be disallowed:
Therefore, His Excellency the Governor-General in Council has this day been pleased to
declare his disallowance of the said Act, and the same is hereby disallowed accordingly.
Whereof the Lieutenant-Governor of the Province of British Columbia and all other persons
whom it may concern are to take notice and govern themselves accordingly.
BODOLBHE BOUDBEAU.
Clerk of the Privy Council.
His Honour the Lieutenant-Governor of British Columbia.
I, Victor Christian William, Duke of Devonshire, Governor-General of Canada, do hereby
certify that the n^ct passed by the Legislature of the Province of British Columbia on the 19th
day of May, 1917, chaptered 71, and intituled " An Act to amend the ' Vancouver Island Settlers'
Bights Act, 1904,' " was received by me on the 31st day of May, 1917.
Given under my hand and seal this thirtieth day of May, nineteen hundred and eighteen.
[Seal.] DEVONSHIBE.
VICTORIA,   B.C. :
Printed by William H. Ccllin, Printer to the King's Most Excellent Majesty.
191S.

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