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T-758-82
In re the Interpretation of a Certain Agreement Entered Into Between Canada and Alberta on
March 29, 1973
Trial Division, Jerome A.C.J.—Edmonton, June 17; Ottawa, October 28, 1982.
Crown — Contracts — Application pursuant to s. 19 of the Federal Court Act and para. 8 of Agreement between govern ments of Canada and Alberta for transfer of ownership and management of Bow River and St. Mary's irrigation projects from Canada to Alberta, to resolve controversy over Canada's obligation under Agreement to transfer mineral rights over certain titles in Bow River Project — Language of paras. 3(1) and 1(b) and Sch. B of Agreement clearly requires that Canada transfer to Alberta all interests in land and mineral rights acquired for purposes of Bow River Project, whether or not presently held for that purpose — Para. 3(1) provides that Canada will transfer all rights and interests in real and personal property in Bow River Project to Alberta; para. 1(b) defines Bow River Project as being management, administra tion and control of all property, real and personal, and all rights and obligations owned, held and enjoyed by Canada within project and owned and used by Canada in association with operation and maintenance of said project as described in Sch. B — Sch. B includes in Project all lands and interests in land held by Canada, including mineral rights (heretofore) under Canada's Bow River Project management — Use of word "heretofore" makes it clear Canada obliged to transfer any mineral rights it owned at time of execution of Agreement and which had been at any previous time under Canada's management for purpose of Bow River Project — Canada originally purchased all land, interest in land and mineral rights in question for purposes related to Bow River Project Fact that responsibility for mineral titles was removed from the Prairie Farm Rehabilitation Administration, which has overall responsibility for Bow River Project, and transferred to different Ministry, which had no connection with project, is inconsequential — Arrangements were essentially in nature of internal management and do not alter Canada's ownership in titles at date of 1973 Agreement nor do they change purpose for which titles were originally acquired — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 19.
COUNSEL:
D. Friesen and J. A. Pethes for Government
of Canada.
A. P. Hnatiuk for Government of Alberta.
SOLICITORS:
Deputy Attorney General for Canada. Attorney General for Alberta.
The following are the reasons for judgment rendered in English by
JEROME A.C.J.: On March 29, 1973, the gov ernments of Canada and Alberta entered into an agreement for the purpose of transferring from Canada to Alberta ownership and management of the Bow River and St. Mary's irrigation projects. This application, contemplated by paragraph 8 of the Agreement and by section 19 of the Federal Court Act' is to resolve a controversy over Cana- da's obligation to transfer mineral rights in respect to certain titles in the Bow River Project. Clause 8 of the said Agreement provides that:
8. If any dispute arises as to the interpretation or application of this Agreement in respect to any matter, if the matter in dispute cannot be resolved by the Ministers, Canada and Alberta will by appropriate Agreement submit the questions of fact and law in dispute to the Federal Court of Canada for determination.
Section 19 of the Federal Court Act is as follows:
19. Where the legislature of a province has passed an Act agreeing that the Court, whether referred to in that Act by its new name or by its former name, has jurisdiction in cases of controversies,
(a) between Canada and such province, or
(b) between such province and any other province or prov inces that have passed a like Act,
the Court has jurisdiction to determine such controversies and the Trial Division shall deal with any such matter in the first instance.
After the 1973 Agreement had been executed but before any actual transfers of land had taken place, the parties were in disagreement over all mineral rights. Accordingly, the first transfer from Canada to Alberta, pursuant to the 1973 Agree ment, was of surface rights only. Subsequently, Canada acknowledged the responsibility to include mineral rights where they were jointly held with surface rights and did execute the appropriate transfer. Mineral rights are separately held with respect to forty-nine (49) titles and these remain the subject of controversy. Three (3) such separate mineral titles were acquired by Canada some time after the original acquisition of the land for the Bow River Project and the remaining forty-six
' R.S.C. 1970 (2nd Supp.), c. 10 and amendments thereto.
(46) were acquired at the same time but subse quently placed under the direction and manage ment of a Ministry which was not involved in any way with the Bow River Project or with the execu tion of the 1973 Agreement. The question to be resolved in this application is whether the Agree ment of March 29, 1973, requires Canada to transfer to Alberta any or all of these forty-nine (49) mineral titles. After careful consideration of the evidence and of representations made by coun sel for the parties at Edmonton on June 17, 1982, I have reached the conclusion that the Agreement does require Canada to make such a transfer.
Paragraph 3(1) of the 1973 Agreement is as follows:
Canada will transfer to Alberta all of Canada's rights and interest in property, real and personal, including accounts receivable of the Bow River and St. Mary Projects and Alberta agrees to accept the management, administration and control of all Canada's rights, title and interest in the Bow River and St. Mary Projects as of and from the 1st of April, 1973 or such other date that the Ministers may agree to prior to the 1st of April, 1974.
Paragraph 1(b) of the Transfer Agreement defined the Bow River Project in the following terms:
'Bow River Project' means the management, administration and control of all canals, reservoirs and other irrigation works held by Canada, from the point of intake on the Bow River in Section 31, Township 21 and Range 25, West of the 4th Meridian in the Province of Alberta, to and including the irrigation works in the Hays District bounded on the east by the Bow River in Townships 12 and 13 in Range 12, West of the 4th Meridian, together with all property, real and personal, and all rights and obligations owned, held and enjoyed by Canada within the said Bow River Project area and owned and used by Canada in association with the operation and mainte nance of the said project, as further described in Schedule 'B' attached.
Schedule "B" to the Transfer Agreement reads as follows:
BOW RIVER PROJECT
(i) All the lands and interests in land held by Canada including rights of way, easements, licences of occupation and mineral rights (heretofore) under Canada's Bow River Project manage ment, and as shown on Plan No. R623 attached hereto;
(ii) All choses-in-action which Canada is entitled to enforce or enjoy arising from its operation of the said project;
(iii) All and sundry the property of Canada, real and personal, and interests in lands within the Project area sold by Canada under Agreement for Sale;
(iv) All those assets owned and used by Canada in association with the operation and maintenance of the project and being: all distribution facilities for the supply and distribution of water; all buildings, shops, machinery, equipment, tools and instruments owned and used by Canada in the repair, mainte nance and operation of the said Project; the stores and inven tory owned and used by Canada for the said Project; grain and feed on land; the benefits of any and all agreements for the sale of lands, leases, permits and for the distribution of water to users within the Project.
I do not find the language of these paragraphs either vague or ambiguous. Paragraph (i) of Schedule "B" places Canada under the clear obli gation to transfer all interests in land and all mineral rights under Canada's management for the Bow River Project. Without the bracketed word "heretofore" in paragraph (i) of Schedule "B", there might be some question whether Cana- da's obligation would go beyond those interests or rights actually held for that purpose at the time of the execution of the agreement, but the presence of the word "heretofore" removes any possibility for doubt. It can only mean that Canada is obliged to transfer any mineral rights which it owned at the time of the execution of the agreement and which had been at any previous time under Canada's management for the purpose of the Bow River Project.
Canada's original acquisition of the Bow River Project took place by Agreement dated July 14, 1950, whereunder Canada acquired from the Canada Land and Irrigation Company Limited an irrigation project in the Province of Alberta which included the Bow River Project. In paragraph 4 of the Agreement Canada bought "... the undertak ing of the company . ..", and in paragraph 5 the term "undertaking" was defined to include "(a) all of the land and interests in land held by the company including rights of way, licences of occu pation and mineral rights". Of the mineral rights thus acquired by Canada, all but forty-six (46) were in relation to certificates of title for both surface and mineral rights, but there is no indica tion that the purpose of acquisition by Canada of the forty-six (46) separate mineral titles was in any way different from the purpose of the balance of the acquisition. All titles were acquired for the purpose of the Bow River Project. Similarly, with
the remaining three (3) separate mineral titles. These were acquired by Canada from sources other than the Canada Land and Irrigation Com pany Limited, but that fact does not in any way alter Canada's purpose in the acquisition. It was equally for the purposes related to the Bow River Project.
Counsel for the Crown made reference to the fact that after these acquisitions, responsibility for the Bow River Project fell to the Prairie Farm Rehabilitation Administration which was initially within the Department of Agriculture and later within the Department of Regional Economic Expansion. Responsibility for the forty-nine (49) separate mineral titles, however, was transferred to a different Ministry and in March of 1973 was under the management of the Department of Northern Affairs and Natural Resources which was charged by statute with responsibility for Canada's interest in mineral rights. I also note that this latter Ministry had no involvement at any time with the Bow River Project and that the 1973 Agreement, which is in issue here, was not exe cuted by a Minister responsible for Northern Affairs and Natural Resources, but solely on behalf of Canada by the Minister of Regional Economic Expansion. I consider these arrange ments to be essentially in the nature of internal management. They do not alter Canada's owner ship of these titles at the date of the 1973 Agree ment. Neither do they change the purpose for which these titles were originally acquired by Canada.
To repeat, the language of the 1973 Agreement is neither vague nor ambiguous. It requires Canada to transfer mineral rights which it acquired for the purposes of the Bow River Project. The forty-nine (49) separate mineral titles were owned by Canada at the date of the 1973 Agreement and had been acquired for the purpose of management of the Bow River Project and I therefore conclude that it is Canada's obligation under the 1973 Agreement to transfer these forty- nine (49) separate titles to Alberta.
No reference was made by counsel to the ques tion of costs and I am not aware if the agreement between the parties for the resolution of this con-
troversy contains any special arrangements in that regard. It is my view that since the controversy was resolved in favour of Alberta, costs should be awarded to the Government of Alberta, but if the parties wish to make further submissions in that regard, I will hear them.
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