Chemainus Park Holdings Ltd. Plaintiff v. Island Timberlands GP Ltd. and, 2013 BCSC 2271

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Chemainus Park Holdings Ltd. v. Island Timberlands GP Ltd., 2013 BCSC 2271 Date: 20131211 Docket: 11-2342 Registry: Victoria Between: Chemainus Park Holdings Ltd. Plaintiff And Island Timberlands GP Ltd. and Her Majesty the Queen in Right of the Province of British Columbia as represented by The Ministry of Transportation and Infrastructure Defendants Before: The Honourable Mr. Justice Crawford Reasons for Judgment Counsel for the Plaintiff: L.J. Alexander, L.R. LeBlanc Counsel for the Defendant Island Timberlands GP Ltd.: R. Davies, Q.C., L.A.E.

Blake-Borrell Place and Date of Trial: Nanaimo, B.C. January 14-17, 21,22, 2013 Place and Date of Judgment: New Westminster, B.C.

December 11, 2013 Introduction [ 1 ] The Transportation Act , S.B.C. 2004, c. 44, s. 42 provides that: if public money is spent on a public road that is not a highway, the travelled road is deemed and declared to be a highway. [ 2 ] Before December 31, 2004, s. 42 was s. 4(1) of the 1979 Highway Act and its successor editions carried the same provisions s. 42 of the Transportation Act now contains. [ 3 ] The plaintiff put in issue 350 metres of road located west of the Vancouver Island Highway and the MacMillan Bloedel (“MB”) Haul Road intersection near Chemainus, BC.

Throughout the evidence, the road was called various names - the Mainline or Haul Road. I will use the term Haul Road. The Haul Road was used for much of the twentieth century to haul logs from the Vancouver Island’s interior to MB’s Chemainus log sort.

The plaintiff’s predecessor in title paid a license fee to use the Haul Road to access its property. [ 4 ] The reason the plaintiff seeks a declaration that the private roadway is a public road is because they acquired the property on the intersection’s southeast corner and are now developing it, and do not want to pay the access license fee. [ 5 ] In April 2007, the plaintiff acquired the property they currently are developing. Doman Timber previously owned the land, and it paid a licence fee to use Haul Road.

However, the proposed change in land use by the plaintiff and the perceived increased traffic entering and exiting the plaintiff’s lands made Island Timberlands (successor in title to MacMillan Bloedel) increase the annual user fees. [ 6 ] Consequently, the plaintiff’s employees reviewed Haul Road’s history and noted that the 1990s Island Highway development included traffic improvements at the Island Highway and Haul Road intersection. Specifically, the Island Highway was widened, signal lights were installed, and the area - including part of Haul Road - was paved.

These improvements form the plaintiff’s argument that public monies were spent on the private Haul Road, and thus it seeks the Court’s declaration that a 350 metre portion of Haul Road is “a

highway”. [ 7 ] In this case, neither the Province nor the Ministry of Highways seek the declaration. In fact, the Ministry of Transportation and Infrastructure (“MOTH”) was a party defendant, but the plaintiff discontinued its action against them before trial. [ 8 ] I was invited to view the roadway. It is paved but without road markings and private road signs are posted. Island Timberlands does not gate the road, and the only other ownership indication is the occasional retainer of a security firm to remind people the road is actually private.

However, given its location, the public clearly uses the road to go from the Island Highway into Chemainus, and from Chemainus to the Island Highway, although parallel public roads - both north and south - allow the same access to the Island Highway or Chemainus. [ 9 ] The real issue is whether, in terms of the Transportation Act , a “public expenditure” occurred - i.e., have public monies been expended on the travelled road? The Ministry has clearly not considered this road part of its road system, nor does any public body maintain the road.

The pertinent period is 1998-1999 when a major upgrade to the Island Highway from Victoria to Campbell River occurred. [ 10 ] For the intersection itself, four documents come into focus - the gravel agreement: tab 29; the MB licence to MOTH for access to the intersection: tab 53; the MB and Doman access agreement: tab 70; and the MOTH-Doman Industries land transfer that permitted creating a deceleration lane on the edge of the Doman lands going north on the Island Highway and turning right onto Haul Road: tab 71. Facts.

History [ 11 ] Haul Road, as it is titled, reflects that MB and its predecessors harvested timber from Vancouver Island’s interior and then brought the logs down Haul Road to its log sorting location in Chemainus. [ 12 ] Haul Road was registered as a private road under the Industrial Roads Act , R.S.B.C. 1996, c. 189: see tab 3; tab 84. [ 13 ] The roadway in question is described as Lot 6 Plan 12657 and was created in 1958. [ 14 ] The paved road is approximately eight metres, and after the Doman entrance at 350 metres, it narrows to seven metres.

Both sides have two metre ditches and a one metre shoulder. [ 15 ] The plaintiff’s focus is the 350 metres from the Island Highway to its Haul Road entrance. 1992 - 1993: Traffic lights installation [ 16 ] In 1990, Hamilton Associates prepared an intersection review (tab 4) that noted the Haul Road is “a one-lane road and is paved east of the highway and is a gravel road west of the highway”.

The paved portion extended 150 metres from the Island Highway east towards Chemainus. [ 17 ] In 1990, MB expected to continuously harvest timber on a long-term sustainable basis, and the logging operation used off- highway logging trucks to bring the logs from the Cowichan woodlands harvest site to its Chemainus Bay dryland sort operation. [ 18 ] The intersection review noted the problem of large logging trucks slowing, crossing, or turning at the intersection.

A few years before the review, an accident occurred when a logging truck turning west onto Haul Road was rear-ended by a south bound passenger car that caught fire. [ 19 ] In May 1991, the North Cowichan Mayor wrote to the Ministry of Highways noting the crossing traffic was mainly off-road and highway logging trucks that, when fully loaded, take a considerable time to cross the highway.

The council had grave concerns about the increasing traffic volume on the Trans-Canada Highway (as the Island Highway was then called) creating the potential for a serious accident. [ 20 ] Consequently, a traffic signal was installed with the province and the municipality sharing the estimated $70,000 cost. [ 21 ] MB also agreed to share the activated traffic signal costs and contributed one-quarter of the final cost.

I infer the work included installing detection loops to trigger the signal and paving on the westerly portion of Haul Road, i.e. west of the Trans-Canada highway. [ 22 ] Apparently, the works were completed, and MB covered the cost because paving was required for detection loops to trigger the signal (tab 9, tab 11). 1994: Doman Forest Products [ 23 ] Doman opened a manufacturing facility on the north-east corner of the Island Highway and Haul Road.

It was referred to in evidence as the reman or value added plant, and it had access points on Haul Road’s north side. [ 24 ] Doman and MB negotiated a non-exclusive licence - i.e., Doman obtained a licence to use the private road: see tab 15. The agreement covers 170 metres of Haul Road east of the Highway, and MB agreed to widen part of the Haul Road’s paving to accommodate an additional lane of traffic between the access point and the highway. As well, Doman agreed to pay MB a pro-rated share of the annual road maintenance of the used portion based on truck volume per year.

And Doman contributed part of MB’s contribution towards the highway intersection traffic signal.

[ 25 ] In a letter on December 30, 1994, MB’s property manager, Ms. Thomas, noted that because the asphalt on the “170 metre portion used by (Doman) was just placed this year, no maintenance is payable.” Intersection improvements [ 26 ] MOTH had an ongoing concern about the public’s safe use of the Trans-Canada highway’s (as it was then called). In November 1994, the Ministry was consulting with MB regarding their access permit. It sought to improve the northbound and southbound right- hand turn lanes at the Haul Road at MB’s cost. [ 27 ] Ms.

Thomas, in a February 27, 1995 internal memorandum (tab 22), noted that MOTH required a guardrail around the light on the northbound side. The main change was creating a right turn lane for the southbound traffic , which would require a ten metre by nine metre land grant from Futura Forest Products (who owned the northwest corner). [ 28 ] Ms.

Thomas sought contributions for the right turn lane’s improvement from Haul Road’s users with the plain intention that those who were licensed to use Haul Road would contribute to MB’s costs. [ 29 ] By December 1998 (see tab 57), the right turn lane for southbound traffic was evidently in place: see also 1998 aerial photograph, tab 135. [ 30 ] During the 1990s, MOTH upgraded the Island Highway from Victoria to Campbell River, and in 1999, the portion south of Chemainus was completed. MOTH did this work via the Vancouver Island Highway Project (VIHP). The project’s principal guideline was public safety.

The VHIP: 1. widened the highway; 2. put a concrete median barrier down the middle of the highway; 3. controlled intersections with signal lights; 4. created deceleration and acceleration lanes; and 5. removed logging trucks from the highway. [ 31 ] In the minutes of a July 27, 1998 project meeting, the project team discussed the Island Highway Haul Road intersection, as noted at tab 26, s. 2.02.03, which read: The intersection will essentially remain as is, although existing islands may have to be relocated if they present a conflict with the TCH through lanes.

Construct deceleration lanes for northbound to eastbound and southbound to westbound movements. [ 32 ] The documents produced at trial show MOTH carried out its intentions in four steps: 1. reached an agreement with MB to obtain 25,000 cubic metres of gravel in exchange for paving a portion of Haul Road east of the highway and other repairs to Haul Road; 2. constructed improvements to the intersection’s signal lights, electrical equipment, and related works; 3. acquired a strip of land from the Doman Nanoose sawmill property located on the intersection’s southeast corner to create a deceleration lane for northbound traffic turning east onto Haul Road; and 4. persuaded MB to amend Doman’s access licence to Haul Road (which Doman had for the northside access to its re-manufacturing plant) so that Haul Road could be used to access the Nanoose sawmill (to the south of Haul Road at an entrance 350 metres east of the intersection).

Consequently, the Island Highway access to the Nanoose sawmills would be closed. The gravel and paving agreement [ 33 ] The agreement (tab 29) is dated September 14,

Article 6 provides: In consideration of the removal of 25,000 square metres of the lands, MOTH will provide paving services to MB on the unpaved portion of the Haul Road containing approximately 800 metres and shown on

Schedule “B”. [ 34 ]

Article 10 provides for MOTH’s non-exclusive use of Haul Road, and MOTH undertook to repair any damage to Haul Road and surrounding lands. [ 35 ]

Article 11 provides: In performing the work on MB’s Haul Road, MOTH agrees that the road is privately owned by MB Limited and that MOTH will not take any steps to dedicate or that may be calculated to dedicate any of the Haul Road or portions thereof as a public Highway. Additionally, the performance of work on MB’s Haul Road by MOTH is considered to be work in lieu of dollars in the payment for gravel removed, and is expressly agreed not to constitute an expenditure of public money pursuant to section 4(1) of the Highway Act, RSBC 1996, c. 188 .

[ 36 ]

Article 11’s intention is clearly expressed by Mr. Dodsworth on MOTH’s behalf in his September 17, 1998 letter (tab 38) to Ms. Thomas: We want to make sure that someone doesn’t try to have the haul raod (sic) declared public, due to public funds used in paving. Our property people have suggested the following clause that you may want to consider…. [ 37 ] The work timetable and the paving contract suggest that the gravel was extracted in the last two weeks of September 1998 (tab 46) and the paving done in the summer 1999. [ 38 ] On September 24, 1998, Ms. Thomas wrote to Mr.

Dodsworth noting she was looking forward to receiving “our part of the bargain” next summer. [ 39 ] MOTH took more than the agreed upon 25,000 cubic metres of gravel; in other words, a gravel overrun occurred. [ 40 ] In mid-1999, Weyerhaeuser acquired MB’s assets. By November 17, 1999, MOTH completed extra work to compensate for the gravel overrun, the project was completed, and MOTH did not pay any money to MB. Access agreement [ 41 ] On January 21, 1999, Mr. Lumb, VIHP’s representative, forwarded Mr.

Hayley, MB’s representative, a draft license allowing the project access to Haul Road for upgrading the intersection: The license is required to upgrade the electrical and other works. As well as tying in any pavement works. Highways has dropped its requirement for a Road Take and opted for the license to const. [ 42 ] Mr. Lumb also raised the issue of Domans using Haul Road to access the north side to which I will soon refer. [ 43 ] MB forwarded a “standard licence” that allowed the project to proceed with the intersection improvements for $500.

The diagram shows two sections of Haul Road being involved, one to the east and one to the west of the Island Highway, which includes the intersection’s curve on the east side for approximately 30 metres on to Haul Road: see tab 55. [ 44 ] The documents indicate the area sought for the licence had been under consideration since mid-November 1998 when MOTH talked of a right-of-way that was required for Haul Road: see tab 52. [ 45 ] On March 12, 1999, Mr. Macleod, MOTH’s representative, and Mr. Hayley, MB’s representative, signed the license.

Doman’s access on the intersection’s southeast corner for the Nanoose sawmill property [ 46 ] MOTH contacted MB about MB giving Doman access to the Nanoose sawmill via Haul Road. [ 47 ] I see this request as part of the Ministry’s desire to have logging trucks not entering or exiting a plant site off the highway when they could do so off a side road.

As well, by placing the concrete medians down the centre of the highway, it meant southbound traffic (logging trucks) could not access the Nanoose sawmill by its west boundary entrance facing onto the Island Highway. [ 48 ] Thus, to placate Doman wanting its logging trucks having access to the Nanoose sawmill and to persuade it to close the west- side entrance, MOTH used its influence with MB to have MB amend its existing licence to Doman (for access to the northside of Haul Road) to add access from Haul Road’s south side to the Nanoose sawmill.

Thus, all traffic going into the Nanoose sawmill, whether it was coming from the north or south, could exit east onto Haul Road and into the Nanoose sawmill entrance. [ 49 ] The Ministry also acquired a sliver of land running along the highway’s edge adjacent to Doman Nanoose sawmill site to create a deceleration lane for the northbound traffic turning east onto Haul Road. [ 50 ] To continue with the history between MB and Doman’s Nanoose mill access, on January 21, 1999, Mr. Lumb, VIHP’s representative, forwarded a licence to Mr.

Hayley, MB’s representative, for the intersection improvement. [ 51 ] He said: The other item Highways has asked me to look into is a Road Use Agreement between MacBlo and Doman. As the Haul Road intersection is to be upgraded, Highways would like to work out a deal that would allow south bound traffic to Doman’s millsite to use this intersection to access your Haul Road. The mill traffic could use the existing entrance off the Haul Road to access the millsite. [ 52 ] On April 21, 1999, Mr. Hayley wrote to Doman concerning renewing the 1994 licence (tab 15), and he set out the renewal terms (tab 70). [ 53 ] Mr.

Hayley added: On another note, we understand form (sic) Highways that you wish to have another access point to our mainline and we would be agreeable to amending this licence to accommodate that requirement. Please provide us with a map showing the planned location for this access point. We will amend the licence once received to cover this additional area. [ 54 ] Doman retained Mr. Robert Flitton, a former MOTH Deputy Minister, as a consultant.

[ 55 ] Mr. Flitton indicated in his letter of April 29, 1999 that he would be meeting with MOTH to finalize matters and submitting a map and request to amend the licence. [ 56 ] At trial, Mr. Flitton gave evidence that he was aware the Ministry wanted Doman to stop using the Trans-Canada highway access to the Nanoose sawmill. In January 1999, a proposal was made that Doman might move the entrance south to the Smiley Road traffic light: see Mr. Sheard’s letter at tab 66.

That letter concluded that an agreement regarding the entrance to and exit from the mill was contingent on an agreement between Doman, Highways and MB for Doman’s use of Haul Road. [ 57 ] I am satisfied the Ministry spoke with MB; then MB and Doman discussed the matter directly. [ 58 ] On May 14, 1999 (tab 73), Mr. Flitton wrote to Mr. Hayley providing him a map of the proposed access point.

He asked him to amend the current non-exclusive licence with Doman to reflect MB’s approval for the second access point from the Island Highway to the existing entrance on the parcel of land legally described as Parcel 2, Plan 12657. He enclosed a copy of a sketch titled SK-15 entitled “Proposed Access to Doman Yard.” [ 59 ] The sketch shows that MB Haul Road’s gravel portions had to be paved to a width of seven metres as the gravel removal and paving agreement shows.

Indeed, the agreement shows the 170 metres from Island Highway east as “existing asphalt” and thereafter as “existing gravel”. [ 60 ] The Ministry appears to have accepted Mr. Flitton’s request on behalf of Domans to provide an eight meter paving width to Domans Nanoose mill entrance as ancillary to the “Sliver” Agreement as evidenced in Mr. Sheard’s letter of May 20, 1999 (tab 75) which references the road work and “widening out the apron area abutting the haul road”. [ 61 ] Doman renewed the Road Use Licence in 2004.

The deceleration lane: the Doman sliver [ 62 ] On April 27, 1999, MOTH and Doman reached an agreement (tab 71) whereby MOTH paid $18,840 for land - i.e., a strip of land on the Nanoose sawmill’s west edge - to create the deceleration lane. Mr. Flitton’s evidence [ 63 ] Mr. Flitton gave evidence about watching the Haul Road paving occur; he thought the paving was part of an agreement whereby Doman gave up their entrance on the Trans-Canada highway. He saw the paving go “right around the corner at the intersection of Haul Road and down the road.” Mr.

Flitton believed this paving was an expenditure of public monies on a public road, but he did not know anything about the gravel removal and paving agreement. He acknowledged the agreement predated his involvement. The Parties’ Submissions The plaintiff’s submissions [ 64 ] Both parties agree the issue does not turn on interpreting the applicable statute, which though re-worded, does not change the statutory intent. [ 65 ]

Section 42 of the Transportation Act has three requirements: the road’s type (i.e., not a highway), whether the road was a travelled road, and whether was public money spent on the travelled road. [ 66 ] No issue arises regarding the road not being a highway. The plaintiff says it is the 350 metres of the Haul Road from Island Highway eastward to the entrance to its lands that it acquired from Doman. Lot 6 Plan 12657, created in 1958, is 7.1 acres (28,730 square metres). [ 67 ] On the second requirement, the plaintiff submitted the evidence is clear: the public travelled the road.

Several persons gave evidence in this regard, and I need not repeat it. [ 68 ] MB and its successors posted sign posts advising the road’s users that it is a private road, and occasionally it uses security forces to reinforce the road’s privacy. However, the general public clearly uses the road notwithstanding that huge logging trucks often occupy it, that it is relatively narrow, that it has are no road markings, that MOTH does not maintain it.

Expenditure of public funds [ 69 ] The plaintiff submitted MB knew of the proposed works involving Haul Road, and it noted that, regarding the intersection improvements, MOTH had threatened a “road take”: see Lumb to Hayley, tab 58 January 21, 1999: “Highways has dropped its requirement for a road take and opted for the licence to const.” [ 70 ] The plaintiff noted the licence agreement for the intersection improvements and submitted that MB knew and acquiesced in the works done on Haul Road. [ 71 ] The plaintiff relied on Mr.

Flitton’s evidence noting he asked to be advised when the paving was done; additionally, he noted he stood on Haul Road and watched the paving being done, and by the time he returned a few days later, the paving to the Doman Nanoose entrance was complete.

[72] The plaintiff submitted the paving was a public expenditure on a public project, and it argued the expenditure was significant interms of the case law, citing Okanagan Similkameen Cooperative Growers Assn. v. Osoyoos (Town), [1994] B.C.J. No. 1957; Campbellv. Thomson, [1990] B.C.J. No. 2237 (B.C.C.A.). [73] Whistler Service Park Ltd. v. Normway Industries Ltd., [1990] B.C.J.

No. 940 was cited to establish that paving and roadconstruction are sufficient expenditures to come within meaning of s. 4 of the Highway Act. [74] The plaintiff noted that in Campbell that the trial judge found that installing four culverts, removing rocks, fixing wet spots andusing an old government grader was “significant”. [75] The plaintiff submitted paving costs (at 1998 rates) at $16 a square metre for 1,480 square metres to its Haul Road entrancewould have cost $23,680 [76] The plaintiff noted MOTH paid Doman $15 a square metre for the highway frontage to create the deceleration lane for a total$18,840.

In contrast, given the current assessed value, the deprivation of the defendant’s 17 metre wide roadway parcel for 350 metreswould be less than $5,000. [77] The plaintiff submitted that improving the Haul Road intersection benefited the successive road owners - namely MB,Weyerhaeuser and Island Timberlands - because the public expenditures were used for improvements, and the owners alone received thebenefit of keeping their crossing permit over the Island Highway.

Defendant’s Submissions [78] The defendant submitted Haul Road is a private logging road. [79] First, the defendant uses private security to conduct spot checks on the traffic and re-direct non-private users away, and theshort-term licences all indicate the road is not a travelled road. [80] Second, regarding public expenditures, the defendant submitted the 1992 expenditures on the intersection’s traffic lights and the1999 expenditures of road widening, creating acceleration and deceleration lanes, improving traffic lights and Haul Road itself were notexpenditures of public money. [81] The defendant traced the history in detail.

I have already touched on much of it. [82] The defendant noted that Mr. Flitton was unaware of the gravel removal and paving agreement when he testified, and he did notseem to understand the reasons for Haul Road being paved. Some emphasis was placed on the expert’s varying opinions regardingwhether the whole of the roadway from the Island Highway and past the Nanoose sawmill entrance was one lot of paving or two. [83] The defendant noted that little or no evidence demonstrated any public expenditure of monies in maintaining the road, and atbest, such evidence was hearsay.

Moreover, the Highway Act stipulates that expenditures for snow plowing are not public expenditures.Nor is Haul Road included in any intermediary roads that Mainroad maintains under its road maintenance contract with the Ministry. [84] The defendant submitted little difference exists between s. 4 of the Highway Act and the present

section created in s. 42 of theTransportation Act. I agree. [85] The defendant referred to Griffin J.’s judgment in Vesuna v.

British Columbia (Transportation), 2011 BCSC 941 in arguing thedefendants had not permitted the general public to travel Haul Road. [86] The defendant argued that to be a public expenditure, cogent and substantial evidence must prove an expenditure of publicmoney; mere incidental expenditures, such as ones made by inadvertence, are insufficient to trigger the section’s operation: WhistlerService Park Ltd. [87] The defendant argued that acquiescence or concurrence by the road’s owner regarding the expenditure is necessary: OkanaganSimilkameen. [88] Finally, expenditure of public funds on part of a road is not sufficient to render the road public.

But once a road becomes public,it remains public. [89] The defendant placed some emphasis on the Locke J.A.’s words Whistler Service Park where he said: In each case the burden of proof in Dunstan must be met, and the evidence must be of so substantial a nature and demonstrate suchcircumstances as to remove any suspicion that an expropriation without compensation is taking place. [90] The defendant submitted MOTH entered an agreement to purchase gravel and paid for the gravel by paving part of the road.MB’s practice of asserting its private road rights, extracting licence fees from users and various other actions ensured it never intended toaccept any public expenditure to make the road public. [91] As well, the public funds needed to be spent on the whole portion of the road - not just a part of it - as reflected in the change tothe legislation from in 1945.

The 1945 legislation deleted the words “on any portion of which public money” has been expended. Reference was then made to Emmett v. Arbutus Bay Estates Ltd., (BC CA), [1994] B.C.J. No. 66 (B.C.C.A.) andSilvern Estates Ltd. v. British Columbia., 2005 BCSC 1071 (as well, see 2007 BCCA 284) [92] The defendant’s submission was that the expenditure of public funds on a discreet portion of road did not transform the entireroad into a public road.

[ 93 ] Last, the defendant submitted the interlocutory injunction that had been set aside should be dissolved, and the Court should order an inquiry into the damages the defendant sustained and payment of the sustained damages. Reply [ 94 ] In reply the plaintiff reiterated the evidence given regarding the travelled road. [ 95 ] Regarding the public expenditure, the gravel and paving agreement excluded Haul Road’s first 170 metres. [ 96 ] Additionally, relying on the evidence of Mr.

Flitton, it was submitted the paving was partly compensation to Doman. [ 97 ] In disputing lack of acquiescence, it was argued: MOTH provided paving for the Doman Nanoose sawmill access from Haul Road; the gravel removal and paving agreement did not include the intersection road improvements; and MB provided the MOTH /VIHP with a licence over Haul Road to do the improvements. [ 98 ] In terms of additional legal analysis, it was noted the Court of Appeal handed down its decision on Vesuna v. Drysdale, 2013 BCCA 10 (leave to appeal ref’d [2013] S.C.C.A.

No. 154) shortly after final argument concluded. [ 99 ] In that case, the trial judge said it was the forestry legislation that was applicable and not the Transportation Act . As well, apart from terms of the right-of-way agreement, the Crown considered the road private and not open to public use; additionally, the road was gated and locked. The annual fees were nominal and not of great benefit to the owner. Consequently, the Court concluded the road was not travelled within s. 42(1) of the Transportation Act .

As well, the contract demonstrated the Crown and the corporate defendant’s intention to keep the road private.

To ignore such intent would be sanctioning expropriation without compensation. [ 100 ] At para. 118, the learned trial judge noted: Further, in the circumstances of this case, where the Crown has expressly agreed with the private property owner that its expenditures and use do not transform an otherwise private road into a public highway, and where there is no evidence that the road has been generally used by the public, I find that the Disputed Road is not a “travelled road” pursuant to s. 42(1) of the Transportation Act , and so that

section does not apply to deem the road a public highway. [ 101 ] The plaintiff noted the right-of-way agreement in Vesuna was nothing like the licence agreement for the intersection improvements in this case and submitted clear evidence demonstrated an expenditure of public money. [ 102 ] It submitted MB was aware, knowledgeable and acquiesced in the expenditure of significant public monies. [ 103 ] Regarding the suggestion about estoppel, i.e. the plaintiff’s initial acceptance of the defendant’s licencing requirements, it was submitted that acceptance occurred before the plaintiff became aware of its rights and the historical evidence. [ 104 ] Finally, the plaintiff disagreed with the defendant’s submission that a declaration of a public roadway could only be for the whole road and not for a specific portion; it noted that in Campbell , the travelled road was more than the portion marked by installing culverts and ditches and was in all of the travelled portion. [ 105 ] Reference was also made to the Court of Appeal of decision in Silvern Estates Ltd.

In sum, the plaintiff submitted the evidence was overwhelming that the part of the road the intersection improvement covered was affected by public monies, and that the paving of the acceleration and deceleration lanes continued up to the entrance to the Doman Nanoose mill entrance. Discussion [ 106 ] On the first two issues, namely the portion of roadway that is in issue and the travelled road, I can shortly say both elements are established clearly on the evidence.

That is not to say that I agree that the legislative change in 1945 is of no consequence, for the effect of granting the plaintiffs declaration would be to create a 350 metre public road connected to several kilometers of narrow winding road without a centre line, and commonly used by large logging trucks.

The legislation is a caution against creating bits and pieces of public highway and public road. [ 107 ] I do agree the road is a travelled road in the sense that the public as well as the authorised users drive the road in both directions. [ 108 ] The remaining issue is whether public monies were expended on the travelled road. [ 109 ] In its ordinary sense, as seen in a number of the reported cases, one would expect to establish the spending of taxpayer’s monies by reference to MOTH or VIPH records showing that monies allocated to MOTH were expended on the travelled road. [ 110 ] In effect, the plaintiff relies on the monies expended on the intersection and its immediately adjacent area that encroaches on Haul Road, and the paving of Haul Road eastward for some 800 metres. [ 111 ] The context, however, is not to be lost, namely MOTH’s principal concern of was public safety given the increasing north/south use of the Island Highway and the dangers inherent in the logging industries’ large trucks.

Some of those trucks would use the main highways if so authorized, but other kinds of huge logging trucks would use the private roads, such as Haul Road, to move logs from the Island’s interior to the Chemainus log sort, and crossing the Island Highway. [ 112 ] It does not take much thought to see the potential public danger to ordinary motorists of huge, slow moving logging trucks trying to traverse a public highway and the need to control the traffic by the means MOTH used.

[ 113 ] Regarding the Haul Road intersection, the project needed MB and Doman’s agreement. [ 114 ] MOTH wanted to keep the Doman logging trucks off the Island Highway, and it wanted to provide safe exit and entrance to the highway for the logging trucks. It needed to acquire additional strips of land adjacent to the highway, and it needed to improve the signal system.

As well, in its road widening, road improvement and paving, it needed gravel, and MB had a nearby gravel pit. [ 115 ] Thus, notwithstanding the various negotiations that took place - resulting in the gravel and paving agreement, the intersection improvement/access agreement, the road purchase agreements for the deceleration lane, and MB and Doman’s licencing agreement to use MB’s Haul Road for Doman’s logging trucks - public monies were expended to improve the electrical and related facilities for the intersection’s traffic signal lights.

But these improvements were only a relatively short encroachment, if any, of some 30 metres east of the intersection.

I do not regard those expenditures as giving rise to a declaration in favour of the plaintiff. [ 116 ] The gravel and paving agreement provided not only for 800 metres of paving but also additional repair works further east towards Chemainus. [ 117 ] Given the various works’ timing, it is my view that the road paving began on the west side of the Doman Nanoose property and that meant it was likely that the paving works in total would have run the length of the deceleration lane, around the corner of Haul Road, and then east on Haul Road over the 170 metres of existing asphalt and then 800 metres over the gravel road. [ 118 ] That finding is consistent with Mr.

Flitton’s observations of the work that was done all at one time, or at least the portions he saw. The plaintiff relied heavily on Mr. Flitton’s observations and belief. But oddly, at least in my view, Mr. Flitton was not aware of the gravel and paving agreement. Mr. Flitton was a former Deputy Minister of Highways.

The contract documents belie his belief that the paving was part of some form of consideration for Doman giving up its Island Highway entrance, though it does appear Doman obtained a metre more in road width to its entrance, which was also paved. [ 119 ] The pertinent issue is whether the portion that was paved from the Island Highway intersection past the Nanoose entrance to the end of the 800 metre portion of gravel road reflects a significant expenditure of public monies. [ 120 ] The paving agreement, in itself, does not reflect expenditure of public monies in the ordinary sense.

The contract was to purchase 25,000 cubic metres of gravel plus other runs up to 50,000 cubic metres. [ 121 ] Importantly, in exchange, the parties agreed that MOTH would pave 800 metres of Haul Road. In effect, they made a barter agreement. And most importantly, the parties specifically agreed that such expenditure would not constitute expenditure of public funds for the purposes of the Highway Act, s. 4(1).

This MOTH/VIHP acquired a huge amount of gravel for the Island Highway project road building with a direct expenditure of public monies. [ 122 ] The Province and the road owner entered into that agreement, and they explicitly addressed the potential situation the legislation created regarding an expenditure of public monies. That is not to say the private agreement prevents the courts consideration of the issue.

But the parties’ agreement is a factor to weigh. [ 123 ] Neither previously nor subsequently has there been the expenditure of public monies in the ordinary sense of maintaining the Haul Road for public use. [ 124 ] Had MOTH simply purchased the gravel from MB and paid for it, and had MB then hired the paving contractor to pave the 800 meters, could there be any argument that public monies were expended?

Plainly the answer is no. [ 125 ] Given that I regard the intersection’s works as not improving MB’s private roads but rather expenditures made for public safety, and that the paving of the 800 metres of the Haul Road is not a direct expenditure of public monies, I find there has not been an expenditure of public monies that triggers the deeming provisions of the Transportation Act . [ 126 ] As well I take heed of the cautionary note mentioned in previous cases that there not be an expropriation without compensation. Conclusion [ 127 ] In sum, while I find Haul Road (or at least that

part in dispute in this case) a “travelled road”, I am not satisfied and I find not proven that an expenditure of public monies in its ordinary sense occurred. Accordingly, I dismiss the plaintiff’s claim. [ 128 ] Regarding the counterclaim, if the parties do not settle it directly, I invite the parties’ submissions. To facilitate same, I would ask counsel to contact the trial scheduler for a trial management conference. [ 129 ] The defendant is entitled to its costs. “The Honourable Mr. Justice Crawford”