Dau v. Murphy Oil Company Ltd.

MARTLAND J.—This is an appeal from the Appellate Division of the Supreme Court of Alberta1, which allowed the respondent’s appeal from a judgment of the District Court, confirmed the award made by the Board of Arbitration on an application by the respondent under the provisions of The Right of Entry Arbitration Act, R.S.A. 1955, c. 290 (hereinafter referred to as “the Act”), and which also directed that the matter be returned to the Board to consider what additional sum, if any, should be added to its original award by virtue of the fact that the highest and best use of the subject lands seemed to be as a site for the production of the underlying oil and gas. The judgment in the District Court had substantially increased the compensation which had been determined as payable by the respondent to the appellants by the Board. The Attorney General of Alberta is an intervenant on the appeal to this Court.

At the conclusion of the argument submitted on behalf of the appellants, the Court advised counsel that we were in agreement with those portions of

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the judgment of the Appellate Division which adjudged that the judgment of the District Court Judge should be set aside, and that the amounts of compensation awarded by the Board should be confirmed.

This left in issue only the direction “that the matter be returned to the Board which should consider what additional sum, if any, should be added to the award by virtue of the fact that the highest and best use of the subject lands seems to be as a site for the production of the underlying oil and gas”.

In my opinion, when s. 20 of the Act provided that the Board of Arbitration, in determining compensation, might consider “the value of the land”, this meant value to the owner of the land. The procedures provided for in this Act are similar in nature to expropriation procedures, even though an order of the Board does not give outright title to the surface of the lands affected; the rights granted by the order may, in certain events, be terminated by the Board; and jurisdiction is given to the Board to review, rescind, change, alter or vary its orders.

It is well settled, in expropriation cases, that the value to be paid for is the value to the owner, and not the value to the taker. Reading the Act in question here, as a whole, I see no basis for interpreting the words “value of the land” in s. 20(2) (a) as involving a different meaning. The value which the Board may consider is, in my opinion, value to the owner.

If this is so, it would not be proper, as directed by the Appellate Division, for the Board to consider an additional award by virtue of the fact that the highest and best use of the subject lands would be as a site for the production of the underlying oil and gas. The appellants could not put the land to that use, since they did not own the underlying oil and gas. It would only be used for that purpose by the respondent, which did have the right to produce such oil and gas. In the result, there was no unusual feature or potentiality about the surface of the land, in question here, other than the potentiality which would exist if the respondent obtained the right to use such land for the purposes envisioned by the Act. Any

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increase in its value as a potential well-site would be entirely due to the scheme underlying its acquisition.

Accordingly, I would delete from the judgment of the Appellate Division the paragraph which directs the return of the matter to the Board for further consideration.

In the result, the appeal should be dismissed, the cross-appeal allowed and the judgment of the Appellate Division varied by deleting therefrom the third paragraph of the operative portion of the judgment roll. There should be no order as to costs.

Solicitors for the appellants: McLaws & Company, Calgary.

Solicitors for the respondent: MacKimmie, Matthews, Wood, Phillips & Smith, Calgary.