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Nanoose expropriation set aside
March 8, 2002

In a decision dated March 5th, the Federal Court (Trial Division) has set aside a high profile expropriation commenced almost three years ago. The case is known as Society Promoting Environmental Conservation v. Canada (Attorney General), [2002] EXLAW 303.

The case involves a military training facility operated by the Canadian Forces on and adjacent to Vancouver Island at Nanoose Bay. The facility is known as the Canadian Forces Maritime Experimental Testing Range (CFMETR). The facility includes a large underwater torpedo testing range located in Georgia Strait. This body of water lies between Vancouver Island and mainland British Columbia. The facility is used jointly by Canada, the United States and other countries.

The seabed of Georgia Strait falls within the exclusive jurisdiction of the Province. A long term lease agreement for the land was last negotiated between Canada and British Columbia in 1989. This ten year agreement expired on September 5, 1999. In the spring of 1999, after efforts to renegotiate the lease collapsed, the federal government commenced proceedings under the federal Expropriation Act, R.S.C. 1985, c. E-21.

The proceedings were commenced by the issuance of a Notice of Intention to Expropriate on May 10, 1999. This notice took effect from May 22, 1999, the date it was published in the Canada Gazette.

Following publication of the notice, the government received 3,000 Notices of Objection delivered pursuant to s. 9 of the federal statute. Under this statute, Canada is required to conduct a public hearing upon receipt of an objection. A hearing officer was therefore appointed on July 5, 1999. A public hearing took place from July 19 to August 17, 1999 in Nanaimo and Vancouver. More than 220 parties appeared at the hearing to state their objections. The hearing officer delivered his report on September 2, 1999. The Minister of Public Works confirmed the expropriation on September 10, 1999 and registration of title in the Land Title Office occurred shortly thereafter.

Ironically, while the Province was the only owner of the land intended to be expropriated, the Province did not directly participate in this legal action. The Province did commence its own separate legal action to challenge the expropriation but it does not appear to have been actively pursued.

The decision released this week resulted from an action brought by an environmental group, the Society Promoting Environmental Conservation (S.P.E.C.). It challenged the inquiry procedure, citing several alleged flaws. The court upheld some of those objections and set aside the expropriation.

The primary basis for the decision was the failure of the hearing officer to deliver notices of the public hearing to all of the objectors within a seven day time limit which the Court found was applicable. This had resulted from an oversight although notices to these objectors was delivered two weeks later while the hearings were underway. A second error was made when the hearing officer's report did not comply with the mandatory requirements of the Act. The Court concluded that both errors were fatal to the process such that the Minister's subsequent confirmation of the expropriation was without jurisdiction.

The implications of this decision are likely to be far reaching. The Expropriation Law Centre will be following the subsequent developments with great interest.

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