Colonial Despatches

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 (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 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 theland 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 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 theCompany 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, printedsubsequently 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 February1865 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 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 Governmentreserve 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 negociationsfor 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 followingprovisions 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) (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 becompleted 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 apledge 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 beenprovisional 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 whichwould 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 circumstancesinto 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 impugningtheir 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 toregard 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 sodedicated 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 disputeit 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.