Palmer and Collier to Cardwell

We are honored with Your commands, signified in Mr Elliot's letter
of the 21st day of June, ultimo, stating that he was directed by you
to bring under our consideration the following question, which has
arisen in Vancouver Island, respecting the sale, by the Hudson's Bay
Company, of a lot of land (hereafter called lot Z,) which is claimed
by the Government, as a Government reserve.

Mr Elliot was pleased to state that in 1849 the Hudson's Bay Company
applied to the Secretary of State for confirmation of their title to
certain lands, then of little value, which they had occupied in
Vancouver Island in connection with a certain license of exclusive
trade granted on the 13th of May, 1838, (Parliamentary Paper, House
of Lords, 12th February 1849, No 1). That, after a short
correspondence, Lord Grey admitted the principle of their demand,
(Parliamentary Paper, 12th February, 1849, No 4), and directed the
Company to frame, for his consideration, a draft conveyance of the
lands which they desired to obtain.

But that this narrower question was almost immediately merged, and
lost sight of, in a larger proposal, which was made at the same time,
and ended in a grant of all Vancouver Island to the Husdon's Bay 
Company, for purposes of settlement (13 January 1849).

That this grant (Parliamentary Paper, House of Commons, 7th March,
1849, pages 13 to 16,) was made in trust, inter alia, to sell the
land, "except so much thereof as might be required for public
purposes," and to apply 9/10 of the proceeds to the colonization and
improvement of the Island, reserving the remaining 1/10 as profit to
the Company. That it also reserved to the Crown the right of
repurchasing the Island, on certain terms, upon the expiration of the
exclusive license to trade, viz: 13th May 1859.

That the lands originally claimed by the Hudson's Bay Company were
not excepted from the grant in trust. That the Company, however, on
the strength of Lord Grey's admission, and in spite of the grant,
continued to treat them as their private property. That they had
them marked out, on their own authority, apparently, in 1851, to the
extent of 3084 acres; in 1853 they directed them to be registered as
belonging to themselves, and reported them to the Colonial Office as
their own property: (Parliamentary Paper, No 83, of 1852, page 2.
Colonial Pamphlet p.p. 10-12, with Governor's despatch 10, of 2nd
February, 1865).

That, in 1854, about 10 acres of this land were dedicated as an
Indian Reserve by the Officers of the Company in the Island. That
this act was reported to the Company, by whom that Reserve is in
principle acknowledged: (despatch 10, of 2nd February 1865, and
enclosure, and Memorandum by Company's Solicitor).

That, in 1858, Mr Douglas who had been appointed Governor by the
Crown, (Parliamentary Paper 7th March, 1849, page 18,) and was also
the Company's Agent, with full authority in matters effecting the
disposal of land, and Mr Pemberton, who was acting for the Company
as Surveyor General, framed, and, it is said, published, an Official
Plan of the proposed town of Victoria, of which a copy was annexed,
printed subsequently in 1861. That, in this plan, the lands about
the reserve were divided off into building lots, the reserve itself
was marked as occupied by Government buildings, (which were shortly
afterwards built,) and its southern and western boundaries were
altered.

That the Company allege, that the original boundary was what the
Colonial Government describe as an open drain, but the Company as an
old ox fence, separating that reserve from a farm called Bexley or
Dutnell's farm, which is marked in the printed plan by a dotted line
in ink.

That the substituted Southern boundary is that which is given in the
official plan, and forms, as will be seen, one side of a proposed
street.

That the strip of land lying between the two lines, and now marked in
the plan as lot Z, was thus, according to the Company, added to the
reserve. That it contains nearly 3 acres.

That the fact of an addition is admitted by the Government; but
there is a question as to the position of the original boundary, and
consequently as to the extent of the addition: (see tracing B with
Despatch 10 of 2nd February 1865).

That, in January, 1858, the Home Government gave Notice of their
intention to repurchase the Island, under the powers reserved in the
deed of grant; and in the course of the year the Governor, Mr
Douglas, ceased to be an Agent of the Company. That he was succeeded
in the latter capacity by Mr Dallas.

That Mr Dallas made fresh plans, more or less at variance with those
of 1858, under which he proceeded to sell, for the exclusive benefit
of the Company, what he considered as their private property. That,
among other things, he sold lot Z, notwithstanding its reservation
for public purposes in 1858, by Mr Douglas and Mr Pemberton, of
which he declares himself to have been ignorant.

That this was an evident injury to the Government buildings, as it
deprived them of one of their street frontages, and more than 1/4 of
the ground attached to them. That it is also alleged to be an injury
to those who had bought building lots on the opposite side of the
street, believing, on the faith of the plans of 1858, that they
would have opposite them a Government reserve.

That, meantime, the notice of repurchase, given in 1859, had raised a
further and larger question which in 1860 it was determined to refer
to the Judicial Committee of Privy Council—vizt: the question,
whether the Company were really entitled to treat as private property
the 3084 acres above mentioned, which comprise the site of a great
part of Victoria, and for the sale of which they had now realized
enormous sums of money, chiefly in consequence of the gold discoveries.

That the negociations for the repurchase ended in an arrangement,
intended to settle all these questions, and to restore the lands of
the Colony to the absolute control of the Government.

1. That, under that arrangement, the Home Government was to pay the
company a sum of about fifty five thousand pounds, being the
reimbursement of money spent by them in Government and Colonization.

2. That the Emigration Commissioners, on the one side, and the
Company on the other, executed an indenture dated 3rd February,
1862, containing the following provisions (Colonial pamphlet pages
41-42).

(1) "That all sales made by the said Company, previous to the
first day of January 1862, of any portions of the land so occupied by
them as aforesaid," (viz: the 3084 acres,) "before the 13th January
1849, including water frontages, and the spaces between high and low
water mark, abutting on such portions of land, shall be valid and
effectual, as against Her Majesty, Her heirs, and successors."

(2) "That the Company shall retain, for their own use and benefit,
the proceeds and purchase monies of all lands so sold by them as
aforesaid."

(5) "That the whole of the remaining unsold lands in the said
Victoria district, lying to the south and west of James Bay,
including the site of the new Government Buildings, as far as the old
fence in the rear thereof dividing it from a farm known as Bexley
Beckney or Dutnell's farm shall be forthwith conveyed and surrendered
by the Company, unto and to the use of Her Majesty, Her heirs, and
successors."

That, under these circumstances, the Colonial Government desires to
retain or regain possession of lot Z, while the Company desire, that
the title of their purchaser should be completed or allowed.

That it is urged on the part of the Government, and public of
Vancouver Island, that the sale of lot Z, was no sale, and should not
be considered as covered by the Indenture of 1862; 1st because the
Company were not authorized, by the Grant of 1849, to sell land
required for public purposes, and lot Z was so required, having been
reserved for Government buildings by Mr Douglas, in his double
capacity of Governor and Company's Agent: 2ndly, because the
offical plan of 1858, which represented lot Z as Government reserve,
constituted a pledge to the public that it should be so maintained;
on the faith of which pledge certain lots of land have been bought,
and particularly those on the opposite side of the street.

That the Colonial Government therefore desire, that proceedings
should be taken against the present occupants under the grant from the
Hudson's Bay Company.

That, on the other hand, the Company will probably contend, that
reserves of this kind, especially reserves of what they consider to
have been their private property, unaffected by the Trusts of the
Deed of Grant, ought to be held to have been provisional, at any rate
till confirmed, or till granted to the Government in trust for the
Colony by them, (the Company); in the present case no such
confirmation was given or grant issued: that, as between the
Government and the Company, the sales of Government Reserves could no
doubt have been effected by common consent; and, therefore, whatever
may be the rights of private persons, the Crown at least is precluded
from calling the sale in question, by the first clause of the
Indenture of 1862.

That the Company is, of course, concerned to avoid any step which
would throw a general doubt upon their right to deal as they have
done with lands in and near Victoria under their second plan of 1859.

That it is extremely undesirable, that the question should remain
unsettled; because, till it is decided, the reconveyance of Vancouver
Island, to the Crown, is delayed; and it is of course possible that
much public inconvenience, and insecurity, may be caused in the
Colony by this delay.

Mr Elliot was therefore desired by you, Sir, to request, that we
would take these circumstances into our consideration, and favor you
with our opinion

1. Whether the Reserve and dedication of lot Z to public purposes
was effectually made by or on behalf of the Company.

2. If so, whether the Company, with or without the concurrence of
the Crown, could afterwards cancel that reservation, so as to enable
them to sell part of the reserve for their private advantage.

3. Whether the agreement of February 1862 would operate
retrospectively as a confirmation of the cancellation and sale, or
preclude the Crown from impugning their validity.

4. Generally, what course we would recommend the Crown to pursue,
having reference to its duty to give all just protection to the
interests of the Colony, and, on the other hand, to its equitable or
legal obligations to the Hudson's Bay Company.

In obedience to your commands, we have the taken this matter into
consideration, and have the honor to
Report:

1. That, after all that has occurred, we do not think the
Crown can now dispute the right of the Hudson's Bay Company to regard
the land, of which they were in possession before 1849, as absolutely
their own—with respect to what is called the "dedication" of 10
acres of this land, we think, that the agreement of 1862 has rendered
it unnecessary to consider any question, except as to parcel marked
Z, which is admitted not to have been originally part of the 10
acres: and, as to this parcel, it is not made out, to our
satisfaction, that, as between the Crown and the Hudson's Bay
Company, it was ever dedicated, in any binding manner, to any public
purpose.

2. If lot Z had been so dedicated, and given up to the Crown, the
Company could not sell it without, but we think they might sell it
with, the consent of the Crown.

3. If the facts stated in the Memorandum enclosed in the letter of
Sir Edmund Head, of May 2nd 1865, be correct, viz: that lot Z had
been occupied and titled by the Company, and sold to Mr Lowenberg
before February 1862, and that all this was then known to the
Government,

*

we think, that the Indenture of the 3rd of February, 1862, operated
to validate that sale, so that the Government cannot now dispute it.

4. On the whole, we think the most advisable course would be to
purchase the land of Mr Lowenburg: if, indeed, he should refuse to
sell on reasonable terms, probably there would be no difficulty

**

in obtaining powers of compulsory purchase from the Colonial
Legislature, on the payment of fair compensation.