Murdoch to Elliot (Assistant Under-Secretary)
1th0 May 1865
I have to acknowledge your letter of 5th inst, with one from the Governor of the Hudsons Bay Co, enclosing a Memorandum prepared by the Company's Solicitors, & concurred in by Mr Dallas, in regard to the sale of Lot Z in Victoria, Vancouvers Island, to Mr Lowenburg [Lowenberg].
2. The statement of the Governor of Vancouvers Island isManuscript image that the question formed part of the Government Reserve set aside by the Company on the Offical Map of the Town of Victoria—that the Company had thereby divested themselves of the power to make any other disposition of it—and consequently that they had no right to sell it to Mr Lowenburg. He added that it was of great importance that the Lot should be recovered for the public, and that the sale of it by the Company was regarded with great indignation by the Legislature. The MemorandumManuscript image enclosed in Sir E. Head's letter, which has of course been prepared on information furnished by Mr Dallas, denies that Lot Z formed part of the Land set apart as the Government Reserve—and alleges that on the contrary it was separated from the Reserve by an Ox fence, and that it so continued, in the possession of the Agent of the Hudsons Bay Co, up to the time of the Sale to Mr Lowenburg—that it was perfectly well known at the time of the Agreement of Febry 1862 that this question existed, and it was thenManuscript image understood that the claim of the Government was to be abandoned.
3. In respect to the Agreement of 1862 I must observe that the question respecting this Lot had at that time never been raised, and that although Mr Dallas in his interviews with us alluded cursorily to some dispute as to the exact boundary of the Government Reserve, we neither did, nor could, express any opinion about it. The agreement therefore of 1862, which could of course give no validity to any but the lawfulManuscript image operations of the Company cannot affect the question now in dispute either way. That question is whether the Company were legally entitled to sell the Land which they did sell to Mr Lowenburg—and that question can be decided only by a Court of Law. Some proceedings appear to have been taken by individual purchasers which would probably raise the question, but it would not, I think, be satisfactory or right to leave it to be decided by a private suit. I would accordingly submit that the Governor should be directedManuscript image to take the necessary steps for bringing to trial before the Supreme Court of the Colony the validity of the sale of Lot Z to Mr Lowenburg—and that he should be further directed, if the decision of the Local Tribunal should be against the Crown, to consider with his Attorney General whether it would not be desirable to bring an appeal from that decision to the Privy Council.
I have the honor to be
Your obedient
humble Servant
T.W.C. Murdoch
Minutes by CO staff
Manuscript image
ABd 11 May
Sir F. Rogers
The Comrs recommend a trial of the case before the Supreme Court of the Colony. On 4225 Mr Blackwood has adverted to the desirableness of having a professional Judge, if possible, before this Course is brought on.
A permanent salary of £1200 has been provided for the Judge, and although the Act may want some amendments, you have recorded your opinion, I understand, that it will be safe to appoint a new Judge at once. The case, I believe, is in the hands of Mr Parker, who has numerous applications.
TFE 11 May
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Mr Fortescue
I do not often differ from the Emign Commrs. But on this occasion I certainly feel a good deal of difficulty in recommending Legal proceedings—because first they will cost a great deal—secondly they will prolong irritation, thirdly they will delay the reconveyance of V.C.I. to the Crown—and fourthly I doubt whether they wd be successful.
I think it very likely that we have been outwitted by the Company's Agents in matters of detail. It could hardly be otherwise. But the alternative of keeping the whole legal ownership of the land of the Colony in the hands of the H.B.C. was and is so inconvenient in itself & may give rise to such numerous complications & quarrels that great sacrifices may be prudently madeManuscript image to avoid it.
My main ground for fearing an adverse result in a Court of Law wd be that whatever the real value of the HBC's sale to Mr Lowenberg the Crown is precluded from calling it in question by the 1st article of the indenture of Feby 1862.
It is argued that this sale was altogether ultra vires & void & that it was not intended by act 1 of the indenture to set up such a sale. But it appears to me that the sale wd have been valid (on any hypothesis) if it had been made with consent of the Crown, and that it must have [been]Manuscript image intended by Act 1 of the indre that the Crown shd not call in question any sale, which by its concurrence it mt have rendered valid.
I should refer to the Law Officers for advice—turning into a letter the annexed memo marked A of my own. Fuller information will be found in the memo (also annexed & marked B) of Mr Ebden.
FR 31/5
Mr Cardwell
Refer to Law Officers accordingly?
CF 8 June
EC 12
Manuscript image
[Memorandum "A"]
Par: Papers 12 Feb: 49 Nos 3, 4, 6
In 1849 the Hudson's Bay Company applied to the Secy of State to confirm their title to certain lands then of little value which they had occupied in Vancouver Id in connexion with their licence of Exclusive trade, and Lord Grey after a short correspondence admitted the principle of their demand.
Nos 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 certainManuscript image 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 Mr Douglas who had been appointed Governor by the Crown and was also the Companys Agent with full authority in matters affecting land Sales, and Mr Pemberton who was acting for the Company as Surveyor General,Manuscript image 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 Govt whose vision of the matter wd 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 Govt gave notice of their intention to repurchase the Island underManuscript image the powers reserved in the Deed of Grant. Consquently upon this notice, Mr Douglas and Mr Pemberton ceased to be agents of the Company and their successor Mr 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 wh 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 asManuscript image 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 Govt & Colonization.
2. The Emigration Commissioners—on the one side & the Company on the other executed an indenture dated 3 Feby 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 Jany/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 My, Her heirs and successors. 2.‹That the Company shallManuscript image 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.My, 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.
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It is urged on the part of the Govt, 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 Govt buildings by Mr Douglas in his double capacity of Governor and Company's Agent.
2. Because the offical plan of 1858 which represented lot Z as Govt 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 beManuscript image held to be provisional, at least till confirmed, or until granted to the Govt in trust for the Colony by them: in the present case no such confirmation was given or grant issued.
That as between the Govt and the Company the sales of Govt 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 5th 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.
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P.S. The case for the Law Officers it is suggested by Mr Walcott, shd embrace the follg 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. Wd the agreement of Feby 1862 operate retrospectively as a confirmation of the cancellation & sale, or preclude the Crown from impugning its validity. .in -2 +0
Manuscript image
[Memorandum "B"]
Gov 2637
Emign Commrs 3034, 4406;
Hudsons B. Co. 11413, 4225;
H. of C. paper Feb/49, March/49;
Vancouver Id 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.
Two questions arise upon its sale by the Hudsons Bay Company to Mr Lowenberg
1. Whether it lies within a certain piece of land reserved for government purposes.
2. Whether itsManuscript image 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 wasManuscript image revoked as to British Columbia in 1858 and expired altogether in 1859.
Vancouver Id paper p. 10
In 1841 Mr (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 Id.Manuscript image When by the Oregon Boundary Treaty in 1846 the 49th 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 Id "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 theManuscript image 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 follg letters—Lord Grey says first that "he is prepared to assent…to your proposal that certain lands in V.C.I.shd be granted to the H.B.C. but…requires an opinion from HM's Atty & Solr General…that the acceptance by the Compy of such a Grant wd 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 Compy wd 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 Id 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 liabilitiesManuscript image 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 asManuscript image their private property and included as their own in various returns to the Col. office witht 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 ofManuscript image any particular land.
However the question was sought to be compromised by an arrangement in the shape of an indenture dated the 3rd 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, whichManuscript image 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 Mr 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 isManuscript image 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 Id 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 purposesManuscript image 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 ofManuscript image 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 Mr 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?
Manuscript image
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.
15 July 1861 Vancouver Paper p. 22
The first notification to the Colonial Office of the sale of lot Z was by letter from the Company who complainedManuscript image that the purchaser had been interrupted in taking possession of it.
Memo 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
Vancouver paper pp. 23, 49, 62
On the contrary Governor Douglas reportedManuscript image 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 theManuscript image 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;
Vancouver paper pp. 41, 42
The 5th 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 Commrs 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 byManuscript image Governor Douglas to Mr Dallas, would be calculated to make them believe that they were making a safe concession. Practically however the 5th 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 5th 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 alienationManuscript image of lot Z to Mr Lowenberg access to the public offices from a large portion of the town except by a circuitous route would be prevented.
2637 [and] Memo 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 Memo with Company 4225
Between 1854 and 1858 a portion of this Reserve was intentionally or not used for anotherManuscript image 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. Mr Dallas who sold lot Z to Mr 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 proveManuscript image 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 Memo 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 Govt 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 RoadManuscript image 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 Commrs recommend that the case should be taken up
It has been suggested that the Colonial Govt should buy lot Z of Mr Lowenberg rather than let him keep it, but the Company ought to give it up themselves of course compensating Mr L. .par The Company decline to give it up so that only the alternatives are left of buying from Mr 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 wouldManuscript image 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.
RE 29/5/65
Documents enclosed with the main document (not transcribed)
Manuscript image
Memo, S. Walcott to Murdoch, 5 June 1863, pointing out various legal questions arising from the dispute and providing his observations on various aspects of the question; revisions added by Colonial Office staff.
Other documents included in the file
Manuscript image
Elliot to Attorney General and Solicitor General, 21 June 1865, referring the question of the government reserve and the disposition of Lot Z for their consideration, with complete background information provided (ten pages).