New Brunswick – justice of the court serves as statutory arbitrator in land expropriation dispute

In McMackin v. Village of Salisbury, 2019 NBQB 99, Mr. Justice George S. Rideout served as arbitrator under the provisions of the Expropriation Act, RSNB 1973, c E-14 to resolve a dispute between a land owner and a municipality in New Brunswick following the latter’s expropriation of part of the land.   Despite its “arbitration” label, the process set out in the legislation and Rideout J.’s reasons appears indistinguishable from a court proceeding.  Without more information, the “arbitration” set out in the legislation does not qualify as an ‘alternative’ to dispute resolution offered by the court.

Section 30 of the Expropriation Act assigns exclusive jurisdiction to New Brunswick’s Court of Queen’s Bench to hear and determine all questions of compensation required to be paid under the Expropriation Act or arising out of an expropriation or “injurious affection” to which the Expropriation Act applies.  The legislation succinctly defines “expropriation” as, principally, among other acts, taking land without the consent of the owner.  “Injurious affection”, however, earns a more nuanced definition which focusing on the reduction in market value caused to the remaining land by taking the land, constructing works thereon and/or using the works thereon.

A party wishing to “invoke” the court’s jurisdiction does so by filing a notice of arbitration (“Notice”) and serving a copy on the other party.  The Notice must contain information “as the Court directs”.  In case of doubt, section 31(3) itemizes the relevant contents of the Notice.

Section 31(4) authorizes the court to consolidate any proceedings provided the court is “of the opinion that it is convenient to do so and that it will not prejudice the opportunity of a party to present his case before the Court”.

Section 32 stipulates that New Brunswick’s Rules of Court, NB Reg 82-73, under the Judicature Act, RSNB 1973, c J-2 apply in all proceedings before the Court under this Act subject to procedural requirements prescribed by section 31 and the regulations.

General Regulation, NB Reg 84-11, a regulation made under section 56 of the Expropriation Act, provides additional particulars to govern the formalities of such arbitrations, including deeming that a Notice is an originating process within the meaning of Rule 16 of the Rules of Court and that the Rules of Court apply “with such changes as are necessary” to a notice of intent to reply and to a reply.   The result reverts the arbitration into the equivalent of a court proceeding.

The General Regulation also provides forms, in Appendix B, the be used in matters dealt with in Part II of the Expropriation Act, including arbitrations before the court.  Such forms include Form B-1 Notice of Arbitration, Form B-4 Notice of Intent to Reply and Form B-5 Reply.

Despite including the forms, the General Regulation at section 3(4) provides that no proceeding before the court shall be defeated or affected by any technical objection as to the form used or based on defects in the form.

New Brunswick’s Arbitration Act, RSNB 2014, c 100 makes no express mention of this form of court run arbitration or of any process arising from a decision involving an expropriation within the province.

Rideout J. at para. 2 reproduced the notice of arbitration filed by the landowner and the reply filed the municipality.  The landowner identified the issue as being the amount of compensation owing to her for the expropriation of her land.  The municipality stated that the issues for arbitration were (i) the appropriate compensation to be paid and (ii) whether the landowner had a valid claim for “injurious affection” on the facts.

The landowner claimed (i) $2,850.00 per acre and (ii) $32,000.00 for injurious affection.  The municipality asserted (i) $17,500.00 per acre, much higher than the landowner’s appraisal but (ii) zero for injurious affection.

Despite having adduced evidence and provided argument on the issue, at the time the reasons issued, the parties had not clearly stated to Rideout J. whether the landowner had or had not received a partial payment from the municipality.

[20] Mrs. McMackin appears to have been paid the $14,070.00 appraisal value of the property or the Village of Salisbury stands ready to pay that amount.

Following his analysis, Rideout J. ordered the municipality to pay the landowner the amount of $14,070.00 if it had not already done so.

urbitral note – Other than being identified as an “arbitration”, the process before the court offers little, if any, of the promises made for arbitration.  Imposed by statute, there is no pretense that the choice of “arbitration” was due to party autonomy or any choice.  It is unclear if the process before the court was faster or less expensive than a regular court proceeding.  There is not mention whether the court had a particular expertise which, if the parties had been free to do so, would have been sought by the parties.  The process was not private or confidential, a reasonable result which may flow from the nature of the dispute, namely a public authority ‘taking’ private assets.  Such a “taking” benefits from a public process and scrutiny. 

Being subject to the Rules of Court and the Judicature Act, there appears to be no economy of procedure or tailoring to suit the parties’ needs.  The ensuing decision by the court is already a decision of the court and need not be recognized or enforced before having the effect of being a court decision.  Section 24(2)(a) mentions the possibility of an appeal in compensation issues.  All said, one wonders why identify the process as an “arbitration” at all as the process has none of the elements indicating it as an alternative to dispute resolution before the court?