 
                  
                  
                     [Memorandum "A"]
                     
                     Par: Papers 12 Feb: 49 N 3, 4, 6
                      
                  
                  
                     In 
1849 the 
Hudson's Bay Company applied to the 
Sec of State to
                     confirm their title to certain lands then of little value which they
                     had occupied in 
Vancouver I in connexion with their licence of
                     Exclusive trade, and 
Lord Grey after a short correspondence admitted
                     the principle of their demand.
                     
                     
N 9, 10 [and] Par: Papers 7 March 49 pp: 15, 16
                     
                     But 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 I to the H.B.C. for purposes of
                     settlement. This grant to 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 colonization,
                     reserving the remaining 1/10 as profit to the Company. It also
                     reserved to the Government the right of repurchasing the Island on
                     certain

 terms.
                     
                     The lands originally claimed by the H.B.C. were not excepted from
                     this grant in trust. The Company however on the strength of 
Lord
                        Grey's admission & in spite of the grant continued to treat them as
                     their private property. They marked them out on their own authority
                     (apparently in 
1851: Colonial pamphlet pp. 10, 11) to the Extent of
                     3084 acres registered & reported them to the C.O. as belonging to
                     themselves and proceeded to deal with them and sell them for their
                     own benefit discharged of the Trust.
                     
                     In 1854 they set out 10 acres of this land as 
                     an Indian Reserve on
                     which however it was afterwards found convenient to place some
                     government buildings.
                     
                  
                  
                     In 
1858 M Douglas who had been appointed Governor by the Crown and
                     was also the Companys Agent with full authority in matters affecting
                     land Sales, and 
M Pemberton who was acting for the Company as
                     Surveyor General,

 framed and, it is said, published an official plan
                     of the proposed town. In this plan the lands about the Reserve were
                     laid down in building lots; the Reserve itself was laid down as
                     occupied by Government buildings, & its boundaries were altered. The
                     original southern limit of the old Indian Reserve is described by the
                     Company as an Ox fence
                     
                     
                     
                        
                           
                           But this limit of the original reserve is certified by the Gov
                           whose vision of the matter w reduce though not remove the ground of
                           dispute.
                           
                        
                      
                     
                     separating it from a farm called 
Bexley or 
Dutnell's farm. The
                     Colonial Government however say that the alleged ox fence is a mere
                     open drain.
                     
                     The substituted southern boundary, which, it is alleged, was now
                     marked out by posts, formed one side of a proposed Street.
                     
                  
                  
                     The strip of land lying between these two lines and called in the
                     Accompanying papers lot Z was thus according to the Company added to
                     the Reserve. It contains nearly 3 acres.
                     
                  
                  
                     In 
1859 the Home 
Gov gave notice of their intention to repurchase
                     the Island under

 the powers reserved in the Deed of Grant.
                     Consquently upon this notice, 
M Douglas and 
M Pemberton ceased
                     to be agents of the Company and their successor 
M Dallas made fresh
                     plans more or less at variance with those of 
1858 of which he declares
                     himself to have been ignorant & under his new plans he
                     proceeded to sell what he treated as the private property of the
                     Company. Among other things (in 
1861) he sold Lot Z.
                     
                     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. It is also alleged to be an injury
                     to those who had bought building lots on the opposite side of the
                     street.
                     
                  
                  
                     Meantime, the notice of repurchase given in 
1859 had raised a
                     further question 
w in 
1860 it was determined to refer
                     to the Judicial Committee of Privy Council viz the question
                     whether the Company were really entitled to treat as

 private property
                     the 3084 acres above mentioned for the sale of which they had now
                     realized enormous sums of money—chiefly in consequence of the gold
                     discoveries.
                     
                     The negotiations for the repurchase ended in an arrangement under
                     which
                     
                  
                  
                     1. The Government was to pay the Company a sum of about £55000 being
                     the reimbursement of money spent by them in Gov & Colonization.
                     
                  
                  
                     2. The Emigration Commissioners—on the one side & the
                     Company on the other executed an indenture dated 
3 Feb
                        1862 containing the following provisions
                     
                     
Colonial pamphlet pp 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," [marginal note: meaning the 3084 acres]
                     before the 
13 Jan/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 M, Her heirs and successors.
                     
                     2.‹That the Company shall

 retain for their own use and benefit
                     the proceeds & 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 H.M, Her heirs and
                     successors.
                     
                     Under these circumstances the Colony desire to
                     retain or regain possession of lot Z while the Company desire that
                     the title of their purchaser should be completed or allowed.
                     
                   
                  
                  
                     It is urged on the part of the 
Gov, and public of
                     
Vancouver I that the Sale of lot Z was no sale and should not
                     be considered as covered by the Indenture of 
1862—first because the
                     Company were not authorized, by the Grant of 
1849, to sell land
                     "required for public purposes," and the land was so required having
                     in 
1858
                     been reserved for 
Gov buildings by 
M Douglas in his double
                     capacity of Governor and Company's Agent.
                     
                     2. Because the
                     offical plan of 1858 which represented lot Z as Gov 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—&
                     particularly those on the opposite side of the street.
                     
                  
                  
                     The Colonial Government therefore desire, that proceedings
                     should be taken against the present occupants under the grant from the
                     
H.B. Company.
                     
                     On the other hand the Company will probably contend that
                     Reserves of this kind ought to be

 held to be provisional, at least
                     till confirmed, or until granted to the 
Gov in trust for the
                     Colony by them: in the present case no such confirmation was given or
                     grant issued.
                     
                     That as between the
                     
Gov and the Company the sales of 
Gov Reserves could no
                     doubt have been effected by common consent—and therefore, whatever
                     may be the rights of private persons, the Crown is precluded
                     from calling the sale in question, by the first clause of the
                     Indenture of 
1862, especially as interpreted by the 5 clause.
                     The Company is of course concerned to avoid any step which
                     would throw doubt upon their right to deal as they have
                     done with lands in and near 
Victoria under their second plan of 
1859.
                     
                     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.
                     
 
                  
                  P.S. The case for the 
Law Officers it is suggested by 
M
                        Walcott, 
sh embrace the foll specific questions
                     .in +2 -0
                     
                     1. Was the Reserve and dedication of the Land to public
                     purposes effectually made by or on behalf of the Company.
                     
                     2. If so could they afterwards cancel it as to part so as to
                     enable them to sell that part (Lot Z) for their private advantage.
                     
                     3. If not could the Crown by joining them have enabled
                     them Lawfully to effect such cancellation & sale & if so
                     
                     4. 
W the agreement of 
Feb 1862 operate retrospectively
                     as a confirmation of the cancellation & sale, or preclude the Crown
                     from impugning its validity.
                     .in -2 +0
                     
                     
                      
                  
                  
                     [Memorandum "B"]
                     
                     Gov 2637
                     Emig Comm 3034, 4406;
                     
                     
Hudsons B. Co. 11413, 4225;
                     
                     H. of C. paper Feb/49, March/49;
                     
                     Vancouver I paper/1864
                      
                  
                  
                     Of the public inconvenience which would be occasioned by the
                     permanent alienation of lot Z to a private individual there can be no
                     doubt.
                     
                  
                  
                  
                  
                     1. Whether it lies within a certain piece of land reserved for
                     government purposes.
                     
                  
                  
                     2. Whether its

 sale was originally legal and if not whether it would
                     be covered by a subsequent agreement between the Crown and the
                     Company made in 
February 1862.
                     
                     Perhaps it may prove convenient to consider the second question first.
                     
                  
                  
                     In 
1838 the Queen granted to the 
Hudsons Bay Company for twenty one
                     years an exclusive right of trading in such parts of British North
                     America as were not already in the Companys possession and were not
                     within the limits of any British North American Province. This grant
                     was

 revoked as to 
British Columbia in 
1858 and expired altogether in
                     
1859.
                     
                     
                     
                     In 
1841 M (now Sir) James Douglas as agent of the Company surveyed
                     a Station for trading in 
Vancouver Island. The extent of country so
                     surveyed was 20 square miles but not more than 6 square miles appears
                     to have been bonâ fide occupied namely two for "enclosures" and
                     "tillage" and four for "enclosures" and a "range for stock."
                     
                     The Company had other stations in the territory known as the 
Oregon
                        Territory besides that in 
Vancouver I.

 When by the 
Oregon
                     Boundary Treaty in 
1846 the 49 parallel of North latitude was
                     taken as the boundary between the territories of the United States
                     and Great Britain, the Companys stations south of that line were made
                     the subject of a special article in the Treaty.
                     
                     
H. of C. paper Feb/49 p. 3
                     
                     Upon the conclusion of the Treaty the Company asked with reference to
                     their establishment in 
Vancouver I "whether they would be confirmed
                     in the possession of such lands as they might find it expedient
                     
to add to those which they already possessed," thus indirectly
                     asserting a title to the

 Station occupied by them in the exercise of
                     the license to trade.
                     
                     A correspondence followed in which the claim so advanced was not
                     allowed or disallowed
                     
                     
                     
                        
                           
                           Hardly. "
Lord Grey further directs me to state
                           
he is prepared to assent &c"—P.P. 
12. Feb. 1849 p. 9. Vide
                           also 2 foll letters—
Lord Grey says first that "he is prepared to
                           assent…to your proposal that certain lands in 
V.C.I.…
sh be
                           granted to the H.B.C. but…requires an opinion from HM's 
Att
                           & Sol General…that the acceptance by the Comp of such a Grant
                           
w be consistent with their Charter of Incorporation."
                           .par
                           Then on receiving that opinion he writes that he "is ready to receive
                           & consider the draft of such a Grant as the Comp 
w desire to
                           receive &c."
                           .par
                           But this smaller question was merged in the greater one.
                           
 
                     
                     but was left unnoticed. The subject was the grant to the Company for
                     the purpose of Colonization of the whole once part of the unoccupied
                     territory in British North America and the result was the conditional
                     grant of 
Vancouver I in 
1849.
                     
                     
H. of C. paper March 49—pp. 15, 16
                     
                     This grant was liable to revocation failing the fulfillment of
                     certain conditions by the Company or, if Her Majesty should think
                     fit, upon the expiration of the exclusive license to trade. These
                     liabilities

 are the subjects respectively of the last two clauses of
                     the grant. The disposal of land is regulated by the last clause but
                     two.
                     
                     In 
1859 upon the expiration of the license to trade notice of
                     resumption of the grant was given to the Company. In the meantime
                     (
1853) the Company had registered as belonging to themselves, not by
                     purchase in their private capacity on the footing of ordinary
                     purchasers under the grant, but by a title anterior to the grant, a
                     portion (vir 3084 acres or thereabouts including the site of
                     
Victoria) of the land (vir 8 square miles) occupied by them before
                     
1849, which they accordingly claimed as

 their private property and
                     included as their own in various returns to the Col. office with
                     dispute. As last known this claim was disputed by the Colonial
                     office and preliminary steps were taken for its investigation by the
                     Judicial Committee of Privy Council.
                     
                     The Company might perhaps have sought to found an equitable if not a
                     legal title upon their occupation of the land in the exercise of the
                     license to trade and upon the fact that the claim indirectly advanced
                     by them in 1846 had not been then explicitly disallowed.
                     
                  
                  
                     On the other hand the claim had as certainly not been allowed and the
                     grant, which might have been taken as the Companys title to the whole
                     Island and to any part of it, made no distinction in favour of

 any
                     particular land.
                     
                     However the question was sought to be compromised by an arrangement
                     in the shape of an indenture dated the 3 of February 1862 by which
                     sales by the Company before 1862 were confirmed as against the Crown
                     and the portion unsold was divided between the Crown and the Company.
                     
                  
                  
                     Although upon notice of resumption of the grant the disposal of the
                     public land was practically taken out of the hands of the Company,
                     yet purchasers cannot receive titles without the formality of the
                     Company's assent until the accomplishment of the reconveyance to the
                     Crown contemplated in the Indenture, which

 however has been delayed
                     in consequence of the disputed right of the Company to have sold
                     a certain piece of land known as lot Z.
                     
                     Lot Z is part of the 3084 acres. It was sold by the Company to 
M
                        Lowenberg early in 
1861 and therefore within the time prescribed by
                     the Indenture.
                     
                     It is maintained by the Colonial Government to be within a certain
                     piece of land authoritatively reserved in 1858 for public purposes.
                     
                  
                  
                     It is maintained by the Company on the contrary to be without that
                     reserve.
                     
                  
                  
                     It is not questioned that if waste land at the time of its sale, that
                     is

 if neither already sold to a private individual nor already set
                     apart for a public object, its sale would be valid under the
                     indenture which confirms previous sales as against the Crown.
                     
                     But assuming for the present that lot Z is within the Reserve, the
                     following case arises.
                     
                  
                  
                     No title to land in 
Vancouver I anterior to the grant of the whole
                     Island to the Company in 
1849 has been acknowledged by the Crown.
                     
                     In regulating the Sale of land the grant excepted from sale such land
                     as might be required for public purposes

 without making any
                     reservation in favour of any particular land.
                     
                     In 
1858 the Chief Officer of the Company who had full power to
                     exercise their power of disposal of land reserved a piece of land
                     including lot Z for public purposes. This appropriation was part of
                     the official plan of 
Victoria made in 
1858 whilst the Island was
                     under the Company. Upon that official plan town lots have been sold
                     by the Company and bought by individuals and in reliance upon the
                     efficacy of the Reservation Government offices have been erected
                     upon the Reserve in 
1859. The alienation of

 lot Z by the Company to
                     a private individual would impair the value of the Reserve as a site
                     for public offices by preventing easy access to them from a large
                     portion of the town and would involve a breach of faith to the Crown
                     and to individuals.
                     
                     In 
1853 the Company registered as belonging to themselves by a title
                     anterior to the grant 3084 acres including lot z which was sold by
                     their manager early in 
1861 to 
M Lowenberg and therefore after the
                     notice of resumption but the Company sold the land not as public land
                     but as their private property for their benefit in their private as
                     distinct from their administrative capacity.
                     
                     Could the Company legally sell lot Z after its appropriation for a
                     public purpose?
                     
                   
                  
                  
                     If the Company could not do so originally, would such sale become
                     valid under the indenture of 1862 which recognises as against the
                     Crown sales of portions of the 3084 acres effected before 1862?
                     
                  
                  
                     Or does not the indenture rather have respect to such sales only as
                     at the time of sale could be legally effected, putting aside the
                     question whether the Company could legally sell any portion whatever
                     of the 3084 acres, which was compromised by the Indenture of 
1862?
                     
                     
———————-
                     
                     Next—as to whether lot Z is or is not part of the Reserve.
                     
                     
                     
                     The first notification to the 
Colonial Office of the sale of lot Z
                     was by letter from the Company who complained

 that the purchaser had
                     been interrupted in taking possession of it.
                     
                     
Mem with Company 4225/65
                     
                     On this occasion they described it as part of a farm which had been
                     long under cultivation by the servants of the Company, as separated
                     from the Government Reserve by a "ditch or fence" (recently magnified
                     into an "ox fence" consisting of ditch, bank and rails), and as separated
                     or about to be separated from the rest of the farm by a "proposed
                     street," a circumstance which in the opinion of the Company had made
                     its sale advisable.
                     
                     
24 Oct. 61, 20 Apr. 62, 11 Aug. 63
                     
                     
                     
                     
                     
                     On the contrary 
Governor Douglas reported

 that lot Z was
                     
part of 10 acres reserved in 
1858 for Government
                     purposes; that it had certainly not been under cultivation since that
                     date; that it was not separated from the remainder of the Reserve by a
                     "ditch or fence" except a surface drain was considered such; that the
                     "proposed" street was actually part of the official plan of 
Victoria
                     designed in 
1858 whilst the Island was under the Company; that in
                     that plan the "rear line" of the Reserve, including lot Z, appeared
                     as part of one side of the street on the opposite side of which town
                     lots were laid out and sold by the Company and bought by individuals
                     in reliance upon the official plan; that the

 Company did not dispute
                     the extent of the Reserve vir 10 acres which however by the
                     abstraction of lot Z would be reduced to 8 acres;
                     
                     
                     
                     The 5 article of the Indenture of 
1862 confirmed the Reserve to
                     the Crown "as far as the old fence in the rear thereof dividing it
                     from a farm known as 
Bexley…farm." 
Governor Douglas concluded
                     from their assent to this article that the Emigration Comm could
                     not have been aware of the dispute, which certainly does not appear
                     to have been communicated to them by this office, and in the event of
                     their ignorance of it the above language, attributed by
 Governor
                        Douglas
 Governor
                        Douglas to 
M Dallas, would be calculated to make them believe that
                     they were making a safe concession. Practically however the 5
                     article has not settled the question one way or the other.
                     
                     The copies made in 
1861 of the official plan of 
Victoria made in 
1858
                     as well as the Companys map prepared as required by the 5 article
                     of the Indenture both exhibit the position of the Reserve including
                     lot Z with relation to the rest of the town. In the plan of 
1858 lot
                     Z is evidently included in the Reserve, in the Companys map made four
                     years afterwards lot Z is distinct from the Reserve. Both maps shew
                     that by the alienation

 of lot Z to 
M Lowenberg access to the public
                     offices from a large portion of the town except by a circuitous route
                     would be prevented.
                     
                     
2637 [and] Mem with Company 4225/65
                     
                     By a despatch recently received from 
Governor Kennedy the
                     appropriation of 10 acres for government purposes appears to have
                     been first made in 
1854 by authority of 
Governor Douglas who had full
                     power from the Company to dispose of land. This appropriation is
                     stated to have been duly communicated to the Company and is in fact
                     acknowledged by their solicitor.
                     
                     
Solicitors Mem with Company 4225
                     
                     Between 
1854 and 
1858 a portion of this Reserve was intentionally or
                     not used for another

 purpose and to compensate for the loss a
                     readjustment of boundaries was in the latter year ordered by 
Governor
                        Douglas who still held the powers held by him in 
1854. 
M Dallas
                     who sold lot Z to 
M Lowenberg says that he was ignorant of any
                     alternation in the boundaries of the Reserve, which may have been the
                     case as he did not succeed 
Governor Douglas in the management of the
                     Companys affairs till 
February 1859.
                     
                     
Tracing B with 2637
                     
                     A tracing received with 
Governor Kennedys despatch exhibits the
                     boundaries of the Reserve as fixed in 
1854 and as altered in 
1858.
                     This tracing if correct would prove

 the greater part of lot Z to be
                     within the boundaries of 
1854, and as these boundaries are
                     acknowledged by the Company, another element would be introduced into
                     the question.
                     
                     
Solicitors Mem with 4225
                     
                     The company also has supplied a tracing with the object of shewing
                     the present and original boundaries of the Reserve, but even for its
                     own purpose it lacks the precision of the Government tracing with
                     which it is not reconcileable.
                     
                     
                     
                        
                           
                           N.B. Since the reservation in 1858 one acre on the water front of the
                           Reserve has been reclaimed by Gov from the sea. This is beside the
                           question but is mentioned in case the Company should purposely confound
                           it with part of the original reserve.
                           
                        
                      
                     
                     The Company endeavours to
                     account for the entire diminution in the quantity of 10 acres which
                     would follow the alienation of lot Z by the use of part of the
                     Reserve of 
1854 for a road. The Colonial Government allows that part
                     of the Reserve of 
1854 was used for a Road

 but in effect maintains
                     that to compensate for the loss a portion of lot Z was added in 
1858,
                     the remainder of lot Z having all along formed part of the Reserve.
                     
                     
———————-
                     
                     Legal proceedings are said to have been taken by individuals in the
                     Colony to annul the sale of Lot Z. The Emigration Comm recommend
                     that the case should be taken up
                     
                     
                     
                        
                           
                           It has been suggested that the Colonial 
Gov should buy lot Z
                           of 
M Lowenberg rather than let him keep it, but the Company ought
                           to give it up themselves of course compensating 
M L.
                           .par
                           The Company decline to give it up so that only the alternatives are
                           left of buying from 
M L. or going to law.
                           
 
                     
                     by the Colonial Government & that, in the event of an
                     unfavourable decision in the Colonial Courts, there should be an
                     appeal to the Privy Council. The Company have declared their resolve
                     to defend the cause to the last.
                     
                     
———————-
                     
                     Other sales of portions of the 3084 acres reserved for public
                     purposes would

 appear to have been effected by the Company for their
                     exclusive benefit before 
1862. The sale of lot Z however is that
                     respecting which there is most information. The whole subject was
                     last year investigated by the Assembly from whose resolutions the
                     Company would appear to have realized by the sale before 
1862 of
                     portions whether reserved or not of the 3084 acres, and in the value
                     of the unsold land secured to them by the indenture, upwards of 1 1/4
                     million dollars. The Assembly beg that the indenture may be
                     cancelled. This would be impossible, but it may be possible to
                     dispute the sale of lot Z and similar transactions if any.