Murdoch to Elliot (Assistant Under-Secretary)

I have to acknowledge your letter of 4th inst, with a despatch
 from the Governor of Vancouver Island enclosing, with other
documents, a report from a Board of Officers whom he had appointed
to consider the Draft reconveyance of Vancouver Island to the
Crown, which was prepared in this Country and transmitted to the
Colonial Government for their consideration. The Board consisted
of the Colonial Secretary—the Acting Attorney General—the Acting
Surveyor General and the Registrar General.

2. In transmitting the Draft reconveyance to the Governor Mr
Secretary Cardwell, while directing him to see that the Map to be
attached to the Deed was not so drawn as to confer on the Company
any advantage not intended by the Government, impressed on him "the
expediency of not raising any question which would unnecessarily
delay a settlement" of the matter. Acting on the former part of
this instruction the Board of Officers proceed to reargue three of
the questions which have been so much
 debated between the Colonial
Authorities and the Hudson's Bay Company during the last 4 years.
Those questions are—

First—the Sale of a portion of Beacon Hill Park, through an error 
in running its Western boundary.

Second—the sale of a portion of the foreshore on the South side of
James Bay—and

Third—The sale of lot Z.

3. The general argument put forward by the Board of Officers in
each case is, that the sale of the land was inconsistent with the
plan on which the Town of Victoria was laid out by the Company, as
shown on the Map of 1858—that the Map was recognized by the
Company as "official"—their deeds of conveyance referring to it
under that Title and containing no other description of the land
conveyed—that consequently it formed a contract between the
Company and the public—and could not, therefore, be set aside
"without the consent of all parties concerned." If this argument
were good it would be conclusive, since the Map of 1858, of which a
copy was published in 1861, undoubtedly sets out the Land in the
manner maintained by the Board of Officers. But I apprehend that
according to the opinion of the Law Officers of the Crown of 26th
July 1865, that Map did not constitute such a dedication of the
Land in question as would divest the Company of their right to deal
with it and that the Indenture of Febry 1862 must be held to
validate all sales made by the Company, previous to it's date, so
far as the Crown is concerned.

4. But passing from this general question, it is alleged, in
respect to the sale of part of the public Park that it took place
not designedly, but by an error of the person employed to run the
Boundary. This is admitted by Mr Dallas who moreover alleged that
the error originated in the Colonial Land Office, and was
discovered & rectified by himself. The Board on the other hand
state that the error was committed by Mr Tiedemann, who although
he had been employed temporarily in the Land Office, was at the
time on leave from that office and was employed by the Hudson's Bay
Co and that it was while so employed in laying out their land that
 he encroached by mistake on the public Park. The extent of land
 cut off from the Park is stated to be 3 1/2 Acres and the price
paid to the Company for it 1700 dollars. As it is not in a
position in which it would have been much used by the Public, and
no public inconvenience results, therefore, from the sale, the
Board are satisfied with recommending that the Company should be
required to refund the amount received for this land. This appears
to me no more than reasonable. Whether the error was made by Mr
 Tiedemann while in the service of the Land department or of the
Company is not, I think, essential. It is admitted by the Company
that the land in question formed part of the Park which had been
assigned to the Public, and that the sale of it was the consequence
of a mistake. But if so it follows that the price realized by the
sale ought to belong to the party to whom the land belonged—that
is to the Public. I would suggest that as regards this case the
course recommended by the Board should be adopted, and the company
be requested to refund the amount received for the Land.

5. Second in respect to the water frontage on the South side of
James Bay, the Board, besides appealing as has been said to the map
 of 1858, allege that most of the lots were sold for inadequate
consideration to servants of the company. But if, as the Law
Officers state, the Crown cannot after all that has passed dispute
the right of the Company to regard the land of which they were in
possession before 1849 as absolutely their own, it has clearly no
right to question the manner in which they disposed of that land.
The sales in question were all made previous to 1862, and came
 therefore within the scope of the Indenture of Febry 1862. The
Committee recommend that the Crown should not part with these
foreshore rights. But the Indenture of 1862 expressly includes the
water frontage and spaces between high and low water mark sold by
the Company among the sales which it recognizes. The Crown is,
therefore, precluded from taking the course suggested by the Board
of Officers in this respect.

6. Thirdly—the question of the sale of lot Z to Mr Lowenburg
 [Lowenberg] had been so repeatedly under consideration that there
is but little new to be said about it. The Board repeat their
conviction, from their personal knowledge, that Lot Z formed part
of the Government reserve at the time it was sold to Mr Lowenburg.
Mr Young the Colonial Secretary, in a Memorandum addressed to the
Governor which the Board append to their report, states, that he is
prepared to declare on oath that when he purchased from the Company
certain lots of land, in rear of lot Z, in Janry 1860, the boundary
line of the Government reserve on the Map exhibited to him formed
one side of the Street, and corresponded with the corner posts
placed there in 1858, which he had himself seen on the ground both
 before and after the sale to Lowenburg. He distinctly denies the
statement that Lot Z was fenced off by an ox fence &c, and so
continued till sold to Lowenburg—and that it was under
cultivation—and alleges that the land that was under cultivation
was on the other side of the Street. And he adds that from the
early part of 1860 he was in the habit of passing to and fro
between his office and his residence over the disputed piece of
land, and can assert that "from that date to the time of the sale
to Lowenburg neither fence, ditch, rails, bank or crops existed. A
drain to carry off the surface water certainly did exist, but in
some cases it had become nearly obliterated, and in others was only
some 6 or 8 inches deep" &c. In support of his statement that Lot
Z formed part of the Government reserve he quotes extracts of
Affidavits made by Mr Tiedemann and Mr Pemberton in May 1861.
The extract from Mr Tiedemann's affidavit is to the effect that
 about midsummer 1858 he laid out the Government Reserve, containing
10 Acres or thereabouts, under instructions from the Acting
Colonial Surveyor—that he had examined the 10 Acres so laid out
since the alleged sale to Lowenburg and finds that the piece of
 land so alleged to have been purchased by Lowenburg is a portion
of the said 10 Acres &c. Mr Pemberton's Affidavit states that he
 instructed Tiedemann to lay out a reserve of 10 Acres—that he
afterwards examined the lines on the ground and found them [to]
correspond accurately, and that he is informed and believes that
Lowenburg has purchased a piece of the Land comprized in such
Reserve. Mr Young assumes that if this evidence on Oath had been
before the Law Officers they would have given more weight to the
representations of the Colonial Government than of the Hudsons Bay
Company. But on the other hand it is to be observed that Mr
 Young has omitted a few very essential words used by Mr Tiedemann
in describing the manner in which he laid out the Reserve, vizt, by
the extension of the "South line of Section VI" and that the Law
Officers had before them another affidavit made by Mr Tiedemann on
the 2nd June 1865, which explains the words I have quoted, and
would very much have modified the effect of the earlier Affidavit
referred to by Mr Young, even if that Affidavit had been exactly
as he quoted it. In their other Affidavit Mr Tiedemann says, that
while engaged in constructing the official map he found that there
were not 10 Acres in the Government Reserve—that on mentioning
this to Mr Pemberton he was ordered to make up the deficiency by
adding to the Southern side the portion of land now forming lot Z
"which at that time formed part of the Company's hayfields at
Beckley Farm"—that Mr Dallas who happened to pass while he was
running the boundary, objected to what he was doing, on the ground
that the land in question belonged to the Company—and that he was
ordered by the Colonial Surveyor to include the land in the
Government reserve, notwithstanding this notice. This affidavit is
also consistent with the evidence given by Mr Tiedemann before the
Committee of the House of Assembly in Novr 1863, to the effect
that Mr Dallas said that in laying out the Reserve he took away
 some land of his (Dallas') farm and that the line of Beckley Farm
ditch and fence would appear on the North side of lot Z.

7. The evidence on the subject of lot Z is so conflicting that it
is hopeless to attempt to decide upon it in this Country, or by a
mere comparison of the statements of the several witnesses. Nor is
it I apprehend necessary to attempt now to do so. The Law Officers
give it as their opinion, that even if lot Z had been dedicated to
public uses, it could have been sold by the Hudsons Bay Co with
the consent of the Crown—and that assuming the facts to be as
stated in the papers before them—and those facts to have been
known to the Government, the Indenture of Febry 1862 operated to
validate the sale, so that it cannot now be questioned by the
Government. That being the case it only remains to consider what
can now be done to remedy the inconvenience which it is said will
accrue to the public from the sale of this lot.

8. The Board of Officers, assuming that the sale of the land by
the Company was "unlawful," suggest that the Company should be
required to refund the amount, 1285 dollars, received for it, to be
applied in part payment of its repurchase. This assumption,
however, cannot be maintained, in the face of the opinion of the
Law Officers of the Crown—and it is certain that the Company would
refuse to admit it. The result would be to postpone indefinitely
the reconveyance of the Island to the Crown to the serious injury
of public interests.

9. But it is said the Government might put a pressure on the
Company in this matter, by making it a condition of the exchange of
a certain lot in Fort Street which, by a mistake on the part of Mr
 Dallas, was inserted in the indenture of Febry 1862 for a lot in
Broughton Street. The mistake was so evident that the Duke of
Newcastle consented to its rectification as part of the general
arrangement. It would hardly, I think, be becoming in the
Government now to take advantage of that mistake in the manner
suggested by the Board of Officers, and the attempt to do so would
naturally lead to strong remonstrances from the Company and
continued delay. I cannot therefore, recommend the adoption of
that course.

10. I have already suggested that the Hudson's Bay Co should be
called on to refund the amount received for the portion of the
public Park erroneously sold for their benefit, amounting to 1700
dollars. That sum when recovered might be applied towards the
repurchase of Lot Z. Lot Z has been recently valued on appeal to
the Court of the Real Estate Assessed Tax at 2000 dollars. Its
saleable value is probably more, but whatever it may be the balance
beyond the above 1700 dollars must be provided out of Colonial
Funds. It will, I presume, be necessary to obtain an Act of the
Legislature giving the Crown the usual powers of compulsory purchase
in respect to this Lot—but there is no reason to apprehend any
difficulty on the part of the Legislature in passing such an Act.

11. In a Memorandum attached to the report of the Board the
Attorney General expresses an opinion that the proposed Deed of
reconveyance ought to be modified, and ought to be in the form of a
Conveyance of all the Island excepting the Lands in Town and
Country sold by the Hudsons Bay Company, which should be included
in a schedule and set out on a plan to be attached to the Deed.
The Deed was not drawn in it's present form unadvisedly as will be
seen by a reference to the report from this Board of 10 Febry last,
& as it has been approved by the Law Officers of the Crown in this
country it is scarcely necessary to discuss the point raised by the
Acting Attorney General in the Colony.

12. In the Draft as returned from the Colony some alterations have
been suggested by the Colonial Government. They refer to the
description of the lands excepted from reconveyance and appear to
us to raise no question of importance. It would, however, be
necessary that the attention of the Hudsons Bay Company should be
drawn to them before the necessary steps are taken for executing
the reconveyance, should Lord Carnarvon decide, notwithstanding the
remonstrance of the Board of Officers, on proceeding with that measure.