In reasons released on May 30, 2014, the B.C. Supreme Court set
aside the B.C. Surface Rights Board's compensation award to a
landowner in northern B.C. and remitted the case back to the Board
for reconsideration: Progress Energy Canada, Ltd. v.
Salustro, 2014 BCSC 960. The case sets out some
important principles as to how the Board should assess the
compensation payable to a landowner under a surface lease.
The Board is the statutory decision maker set up to resolve
disputes between landowners and companies that require access to
private land to explore, develop, or produce Crown-owned subsurface
resources such as oil, gas, and minerals. Its mandate includes
determining the amount to be paid to a landowner for a
company's entry, occupation, and use of private land upon an
application for rent review. Due to the lack of case law and
inconsistencies that have emerged in the Board's compensation
awards, operators have in recent years faced unpredictable results
in Board decisions following a rent review hearing initiated by a
The decision in Progress should provide much needed
clarity as to the principles applicable to the Board in assessing
the compensation payable to a landowner at a rent review hearing.
Some of the key principles in the decision are as follows:
If a landowner brings an application for a rent review, the
onus of proof is on the landowner.
This onus requires the landowner to establish ongoing
prospective losses and to establish that any increase is
An award for loss of profits must be based on "actual
ongoing losses and impacts as well as probable and reasonably
foreseeable ongoing and recurring loss or damage that can be
Evidence of a property having potential to be farmed is not the
same as evidence demonstrating that a property is, or is intended
to be, farmed. As such, evidence of a property having potential to
be of agricultural use is not sufficient to determine that
agricultural use of the property is reasonably probable and
Both the operator and the Board have 30 days to appeal the
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