Date: 20021218
Dockets: T-1252-99
T-1538-95
Neutral citation:2002 FCT 1312
BETWEEN:
JEANNINE MORIN, personally, and on behalf of a class
of persons having the same interest, which class is more particularly
described in Appendix "A", of the Statement of Claim
Plaintiffs
-and-
HER MAJESTY THE QUEEN
Defendant
REASONS FOR JUDGMENT
[1] These actions require the Court to apply the principles articulated by the Supreme Court of Canada in Musqueam Indian Band v. Glass, [2000] 2 S.C.R. 633 with respect to the determination of the fair market value of Indian reserve land surrendered for leasing purposes.
1. Factual Background
[2] The plaintiffs are the lessees of residential lots located in the Jocko Point Subdivision. The Jocko Point Subdivision is located on the north shore of Lake Nipissing, west of North Bay, Ontario and is contained within the Nipissing Indian Reserve No. 10.
[3] The subdivision consists of 300 lots of various sizes. Access to the lots is by way of a gravel road, the Jocko Point Road, which separates the back lots from the lake front lots. The back lots generally have approximately 100 feet of frontage and average depths of about 150 feet. The lake front lots have 100 feet of frontage and vary in depth from 112 feet to 224 feet. Additionally, the lake front lots have a shoreline allowance of some 66 feet in depth which is utilized by the lessees. The Jocko Point Road crosses two creeks which naturally separate groups of lots as the topography slopes downward in elevation. It is agreed that the lots divide naturally into eight groupings for the purpose of determination of their value.
[4] Nipissing Indian Reserve No. 10 is set aside for the use and benefit of the Nipissing Band of Ojibways ("Nipissing Band"). The land comprising the subdivision was surrendered to the Crown in 1962 for leasing purposes. Subsequently, the Nipissing Band was authorized by the Crown, pursuant to sections 53 and 60 of the Indian Act, R.S.C. 1985, c. I-5 to administer the leases and the leased lands on behalf of the Crown.
2. The Lease
[5] Each lot is leased under a separate written lease entered into between each lessee and Her Majesty the Queen as lessor. While the leases are not identical, the parties jointly tendered into evidence a lease, the terms of which were said to be typical. That lease will be referred to in these reasons as "the lease".
[6] The lease is for a term of years ending on March 31, 2004. The calculation of rent is to be based upon the following clause in the lease ("rent review provision"):
That the rental for the five (5) year period of the said term beginning the first day of April, 1984, and for each succeeding five (5) year period of the said term and any renewal thereof, shall be determined prior to the beginning of each such period and shall be based on the fair market value for the land at that time, without regard to the value of the improvements placed thereon by the Lessee, but having due regard to the value of other demised lands in the area. Once the determination of the fair market value for the land is established by the lessor's appraisers, the lessor's representative(s), the lessee or his representative(s) and the Band Council or its representative(s) will meet to negotiate the fair market rent based on the following conditions:
The yearly rental will be assessed by applying (multiplying) the average lending rate at which the Bank of Canada lends to the Canadian Chartered Banks to the said market value of the land.
For the purposes of this clause, the average lending rate shall be that rate herein specified, determined as of the first day of September in each of the five (5) years, immediately preceding the expiry date of the term herein set out.1
[7] The lease provides that if the parties fail to reach agreement on the fair market rent, the Minister of Indian Affairs and Northern Development ("Minister") shall determine the rent. The lessees are given the right to disagree with that determination and to refer the question of rent to this Court for determination.
3. These Proceedings
[8] The Minister's authority to determine rent was delegated to the Nipissing Band. Pursuant to that authority, the Nipissing Band Council and Chief determined the yearly rent for the five-year period commencing April 1, 1994. The lessees disagreed with that determination and commenced action T-1538-95 seeking a determination of the fair market rent payable for the five-year period commencing April 1, 1994. The action was defended, and a counterclaim was asserted against the plaintiff lessees for the full amount of all rental arrears owing pursuant to the lease, plus pre-judgment and post-judgment interest and costs.
[9] Similarly, for the five-year period commencing April 1, 1999, the Nipissing Band Council and Chief determined the yearly rental and the lessees disagreed with that determination. In action T-1252-99, the lessees seek a determination of the fair market rent payable for the five-year period commencing April 1, 1999. This proceeding was also defended and a similar counterclaim advanced for payment of all rental arrears, pre-judgment and post-judgment interest and costs.
[10] In 1996, the plaintiffs moved in T-1538-95 for an order determining a question of law, specifically the meaning of the phrase " ... but having due regard to the value of other demised lands in the area" contained in the rent review provision. Fundamentally at issue was whether regard should be had to the rents paid in respect of similar leased lots forming part of the same Nipissing Indian Reserve No. 10 in a subdivision known as Beaucage Park.
[11] Mr. Justice Gibson in a decision reported at (1996), 114 F.T.R. 141 determined that the phrase be "interpreted for all purposes of this action as requiring due regard to be had to the value of other demised lands in Nipissing Indian Reserve No. 10 and, more particularly, to those demised lands comprising the portion of the Reserve known as Beaucage Park" (quoted from the order issued by Mr. Justice Gibson).
[12] In 2000, a second question of law was put before the Court for determination, this time in T-1252-99. The question was whether the Tenant Protection Act, 1997, S.O. 1997, a law of general application, applied to the leases at issue. Madam Justice Heneghan determined in a decision reported at (2000), 184 F.T.R. 231 that the Tenant Protection Act, 1997 does not apply to the leases.
[13] Thereafter, the actions proceeded to trial together, to be decided on common evidence. The trial was heard in North Bay, Ontario from May 28, 2002 to May 30, 2002. The parties then submitted written argument. The plaintiffs' final written reply was filed on September 27, 2002.
4. The Issues
[14] To determine the annual rent for any five-year period under the lease it is necessary to establish at the relevant time both the fair market value of the land and the average lending rate at which the Bank of Canada lent to Canadian chartered banks. The parties are agreed as to the interest rate to be applied to the five-year period commencing in April 1994, but dispute the rate to be applied to the second five-year period. The fair market value of the land is disputed. Therefore, the issues to be decided are:
i. The fair market value for a typical lot as at April 1, 1994;
ii. The fair market value for a typical lot as at April 1, 1999; and
iii. The interest rate to be applied to determine the rent for the five-year period beginning April 1, 1999.
[15] Once the applicable interest rate and the value for a typical lot is determined for each five-year term, the parties have agreed upon percentage adjustments to be applied to each lot in order to determine the value of each lot. Those percentages are set out at page 25 of Exhibit J-3 and repeated at pages 23 and 24 of Exhibit J-4. They reflect the eight groupings of lots for purposes of value and take into account physical differences among the lots including topography, quality of shoreline and size.
5. The Evidence
[16] Each party produced two witnesses at trial, one testifying as to relevant facts, the other a qualified appraiser providing his opinion as to the value of a typical lot at each relevant point in time. The evidence of each witness is briefly summarized below.
(i) The representative plaintiff, Ms. Morin
[17] Ms. Morin is a lessee of land in the Jocko Point Subdivision, and a member of the lessees' association. Ms. Morin has served on the executive of the association, has been on the negotiating committee of the association since 1994 and is the liaising officer for the purpose of this litigation.
[18] In addition to describing generally the subdivision, Ms. Morin described the two services provided to the subdivision by the Band: road maintenance, including snow removal, and garbage collection. The lessees pay amounts additional to their lease payments for these services. The lessees' association operates and maintains its own fire department.
[19] Ms. Morin confirmed that when a lot is leased the only improvement provided is a culvert. All other improvements, including site preparation, are the responsibility of the lessee.
[20] The Jocko Point Subdivision is situated in a known flood plain. Ms. Morin testified at some length about the land's flooding history, describing it as "almost an annual event". A compact disc which recorded digital images of past flooding was identified and described by Ms. Morin and was received in evidence.
[21] Ms. Morin also testified that financing is not available to lessees. This means that lessees can only sell their leasehold improvements, that is their homes, if a purchaser has cash or the vendor/lessee takes back a chattel mortgage. Historically, the Bank of Nova Scotia was the only lending institution which lent money for the purpose of acquiring leased property at Jocko Point, secured by collateral mortgages on the leasehold interest. However, that bank is no longer willing to make such loans. CMHC mortgage insurance is not available because the subdivision is located on a flood plain.
(ii) The plaintiffs' appraiser, Mr. Peter Rueck
[22] Mr. Rueck has been an accredited appraiser of the Appraisal Institute of Canada ("AACI") for 25 or 26 years. He works as a full-time appraiser.
His opinion of "the market value, of the fee simple interest" of a typical lot was:
· As of April 1, 1994: $19,200.
· As of April 1, 1999: $24,000.
[23] Mr. Rueck used a 2-step process to reach his opinions as to value. First, he ascertained the market value of a lot based on the assumption that it could be transferred in fee simple as of April 1, 1994 and April 1, 1999. To do this he used the direct comparison approach, which is an estimate based on a comparison of sales or offerings for sale of similar properties. Second, Mr. Rueck conducted an analysis to ascertain whether the market differentiates between freehold and leasehold values. To do this he carried out three studies.
[24] The first study to ascertain whether the market differentiates between leasehold and freehold interests was a survey of seven real estate practitioners familiar with Jocko Point to learn their opinions on the effect of "freehold versus leasehold" on the market value of land. Each realtor was asked a single question:
"If a building lot, similar in all respects to that of Lot 100 (Jocko Point) including location, terrain, size, amenities etc., has a hypothetical market value of $50,000, would such a lot within Jocko Point, taking into consideration its location and leasehold status, have a value the same, more or less than $50,000?"
[25] The results of the survey of real estate practitioners were as follows:
| Response |
No. of Realtors |
|
Somewhat less |
1 |
|
20% less |
2 |
|
25% less |
1 |
|
30-40% less |
1 |
|
50% less |
2 |
[26] In the second study, Mr. Rueck attempted to establish a variance in the rate of depreciation between the replacement cost and subsequent sale price of dwellings on both leasehold and freehold properties. The sales of six waterfront freehold properties were analysed, with land values being estimated and deducted from the sale price, resulting in a value said to be applicable to the improvements. Mr. Rueck then made an adjustment to those comparables which had a basement to ensure that the comparables were in fact comparable. This was the only adjustment he made.
[27] Mr. Rueck found that unit rates ranged from between $72.49 to $121.01 per square foot of building. The midpoint of this range, $90 per square foot, was then used to project a value for leasehold improvements at Beaucage Park (used instead of Jocko Point because the properties there were more recently constructed and more readily comparable).
[28] The sales of four Beaucage Park leasehold properties were then investigated and the sale proceeds were compared with the product of $90 per square foot and the square footage of the improvements sold. That is, the square footage of each property was multiplied by $90 per square foot. The sale proceeds of the leasehold improvements in Beaucage Park were found to be between 37% and 44% of what was projected by multiplying the square footage by $90 per square foot. This was said by Mr. Rueck to reflect a 40% discount between freehold and leasehold land values.
[29] In the third study, Mr. Rueck compared sales of leasehold properties within the Jocko Point Subdivision with sales of freehold properties in the neighbouring Springer Township. To do this Mr. Rueck first conducted a paired data set analysis whereby a property from Jocko Point and a similar property from Springer Township were compared to each other and adjustments were made in an attempt to bring these properties to as comparable a basis as possible (excepting location). Mr. Rueck considered this to be a comparison between leasehold and freehold values. Second, Mr. Rueck conducted a global approach, whereby Jocko Point properties which transacted from 1994 to 2001, with frontage on Lake Nipissing, involving single-storey structures, were plotted and the average sale price derived. A similar process was carried out for comparable properties in Springer Township. The two average sale prices produced by these approaches were then compared, with the difference said to provide an indication as to the discount factor.
[30] The paired data set analysis was found to reflect a discount factor ranging between 53.92% to 61.90%. The approximate midpoint of 58% was selected to establish the discount factor. The global analysis showed a 56.79% discount.
[31] Having obtained those varying discount factors by the three approaches, the result of each approach was weighted. A 5% weight factor was attributed to the realtor survey, a 25% weight factor was attributed to the variance in rate of depreciation analysis, and a 35% factor was attributed to each of the global and paired data set Jocko Point/Springer Township analysis. So weighted, a 52.07% discount factor was obtained which was rounded to 52%.
[32] Applying that discount factor to the two values Mr. Rueck had ascribed to a fee simple interest in a typical lot he concluded that the fair market value of a typical lot was:
· As of April 1, 1994: $19,200.
· As of April 1, 1999: $24,000.
(iii) The defendant's representative, Ms. McLeod
[33] Ms. McLeod is the land manager for the Nipissing Nation Band government. She described the rent review process as it had unfolded with respect to both the Jocko Point Subdivision and the Beaucage Park Subdivision, including the dealings with respect to the interest factor to be applied over the 1999-2004 lease term and the most recent rent renewal negotiation the Beaucage Park lessees.
[34] Ms. McLeod testified that road maintenance is provided at a charge of $180 per year per lease and garbage is collected for a charge of $120 per year per lease. The rates are set by the Nipissing Band Council resolutions which are incorporated by reference in the lease by clause 33.
(iv) The defendant's appraiser, Mr. Duncan Bell
[35] Mr. Bell is an accredited appraiser of the AACI and has been since 1987. He works full-time as an appraiser, but is also a real estate broker who owns his own brokerage.
[36] Mr. Bell testified that appraising Indian reserve land "has been sort of the main point of our office in the appraisal department". Since the mid-1980s, Mr. Bell has appraised lots on the Jocko Point and Beaucage Park subdivisions, and also lots in the industrial parks operated by the Nipissing First Nation on its reserve. Mr. Bell has also completed appraisal assignments from three other First Nations. He testified that his appraisal work in connection with reserve land was primarily for lease negotiation purposes, but that he has also been involved in valuing land for land claim purposes.
[37] Mr. Bell testified as to the importance of the Musqueam decision for real estate appraisers. In order to better understand the principles the case established Mr. Bell read the trial, appeal and Supreme Court decisions. Further, he acquired and read the 12 volumes of trial transcripts and the appraisal report of the expert whose opinion as to value was accepted by the Court. Mr. Bell also spoke by telephone to that appraiser, Mr. Oikawa, in order to get a better understanding of this case.
[38] Mr. Bell's opinion of the fair market value of the typical lot was:
· As an April 1, 1994: $42,000.
· As of April 1, 1999: $51,500.2
[39] Mr. Bell prepared separate appraisal reports for each lease term at issue. The approach used varied slightly in each. For both periods he used two methodologies because, in theory, the two methods should produce similar, although not necessarily identical, results.
(a) The lease term beginning April 1, 1994
[40] The starting point for Mr. Bell's analysis was the requirement in the lease that the fair market value of the land to be determined "having due regard to the value of other demised lands in the area".
[41] For the 1994-1999 lease period, Mr. Bell considered the values set for lots in Beaucage Park. This was consistent with Mr. Justice Gibson's ruling that an appraiser should have regard to the value of other demised lands on the reserve, including Beaucage Park lands.
[42] As at April 1992 the Beaucage lots were valued by Mr. Bell's father, an appraiser, at $40,000 before a discount was taken. This value was accepted by Mr. Justice Cullen of this Court in Rodgers v. Canada (Minister of Indian Affairs and Northern Development) (1993), 74 F.T.R. 164. Mr. Bell accepted that value and concluded that the Beaucage lots would have similar value to the typical lot he was valuing, given the same effective date.
[43] In order to reflect the difference in the market between April 1, 1992 and April 1, 1994, Mr. Bell reviewed 12 off-reserve vacant land sales and discerned an upward trend in value from 1991-1997. Mr. Bell estimated a 5% increase in value over the two-year period. Thus, the estimated value of a Jocko Point lot on April 1, 1994 pursuant to this methodology was $42,000.
[44] Before leaving this methodology it should be noted that the typical Beaucage Park lease requires the land to be valued with regard to similar parcels of vacant land situated outside the reserve. Therefore, in looking to the value of Beaucage Park lots there was no reduction in those values based on the fact that the lands are Indian reserve lands.
[45] The second methodology employed by Mr. Bell was based upon application of the principles established in Musqueam. An estimate of value for off-reserve lots (similar in characteristics to lots on the reserve) sold on a fee simple basis was determined, following which adjustments in value of the on reserve lots were made in order to reflect the actual features of the reserve lots.
[46] In order to determine the value of off-reserve lots, Mr. Bell reviewed the sales of vacant waterfront lots. Land with no, or very few, improvements was looked to in order to avoid complications caused by adjustments needed to value improvements. Mr. Bell then used the bracketing method to narrow the range of value and ended up with a hypothetical fee simple value of $47,500 for a typical Jocko Point lot.
[47] Mr. Bell then considered that the hypothetical fee simple value of land on a reserve must reflect the legal restrictions on the land, as well as market conditions. Therefore, the off-reserve value must be adapted to reflect those matters. To do so, Mr. Bell considered the four concerns which surrounded the Musqueam lands and which resulted in a discount being applied to those lands. He concluded that two of those concerns, servicing concerns and assessment and taxation concerns, were not applicable to the Jocko Point Subdivision. The limit on mortgage financing and the fact that non-natives cannot participate in the election of the Chief and Band Council (who make decisions which could affect the leases) were concerns that applied to the Jocko Point Subdivision, although in Mr. Bell's view the political situation at Jocko Point was not as significant as in Musqueam because the Nipissing Band does not assess or tax property values.
[48] After speaking with the Musqueam appraiser, Mr. Oikawa, Mr. Bell concluded that equal weight should be attached to each of the four concerns that resulted in a 50% discount of the Musqueam land value. As only two were applicable to Jocko Point, this would result in a 25% discount.
[49] Mr. Bell then went on to consider Jocko Point market influences which were positive in nature. In the Jocko Point Subdivision a positive feature is that the lessees do not pay realty taxes on either the land or the improvements. This benefit was quantified by Mr. Bell at 10% of the value of a lot.
[50] Mr. Bell was also of the view that adverse conditions in a marketplace typically affect higher priced properties to a greater extent than lower-priced properties. The typical selling price of vacant lots in the Musqueam area was in the range of $500,000 to $650,000. Thus, in Mr. Bell's opinion, even if Jocko Point lots suffered from the identical concerns and uncertainties as the Musqueam lots, the effect on Jocko Point land value would be less. A moderating factor of 50% should, in Mr. Bell's view, apply to the discount factor.
[51] This resulted in the following calculation:
ESTIMATE OF VALUE - FEE SIMPLE OFF RESERVE $47,500.00
LESS:
Mortgage Concerns (12.5%) $5,938.00
Others Including Political Unrest (12.5%) $5,938.00
$ 11,876.00
MODERATED ADJUSTMENT BASED ON MARKET LEVEL 50%
$ 5,938.00
$41,562.00
ADD: Tax Advantage (10% of $47,500.00) $ 4,750.00
CONCLUDED VALUE BY WAY OF METHODOLOGY II $46,312.00
Rounded $46,300.00
[52] In order to correlate the results produced by the two methodologies ($42,000 vs. $46,300) Mr. Bell considered that the first methodology provided the more reliable approach to value. Therefore, he concluded that the value of a typical lot as at April 1, 1994 was $42,000.
(b) The lease term beginning April 1, 1999
[53] For this lease term, Mr. Bell basically employed the same methodologies.
[54] However, with respect to the first methodology, no values had been set or agreed for the Beaucage Park lots for the purpose of determining rental payments owing in respect of those lots for the 1997-2002 lease term. Instead, rental rates were determined through negotiations conducted outside of the terms of the lease. Mr. Bell therefore took the negotiated rent and worked backward from that rent to estimate value.
[55] This was made more difficult because of the dispute between the parties as to the interest rate applicable to this second rental period. The plaintiff urges an interest rate of 5.15%, while the defendant relies upon a rate of 5.39%. Therefore, calculations were done using both rates.
[56] Using the 5.15% interest rate suggested a vacant land value of $45,745, while using the 5.39% interest rate suggested a vacant land value of $43,708.
[57] Turning to the second methodology, the same direct comparison approach was applied to off-reserve vacant land sales to produce an estimated fair market value of the Jocko Point lots of $55,000.
[58] With respect to discounting that value, Mr. Bell was able to obtain information on municipal tax rates payable if the land was off the reserve. This resulted in the following adjustment to the hypothetical freehold value:
ESTIMATE OF VALUE - FEE SIMPLE OFF RESERVE $55,000.00
LESS:
Mortgage Concerns (12.5%) $6,875.00
Others Including Political Unrest (12.5%) $6,875.00
$ 13,750.00
MODERATED ADJUSTMENT BASED ON MARKET LEVEL 50%
$ 6,875.00
$48,125.00
ADD: Tax Advantage (with respect to land only) $ 3,400.00
CONCLUDED VALUE BY WAY OF METHODOLOGY II $51,525.00
Rounded $51,500.00
[59] With respect to the values which resulted from each methodology for this lease term, it was Mr. Bell's view that the value obtained through the first methodology did not reflect fair market value, but rather reflected rents negotiated by ignoring the terms of the lease. In the words of Mr. Bell's report:
For their own reasons, these parties agreed to rents that, at least based on the appraisal of Peter Minoque, were below fair market rents. Although I have not confirmed the [veracity] of Mr. Minoque's appraisal, his figure of $55,000.00 suggests that the $51,500.00 figure I arrived at utilizing Methodology II is a more accurate reflection of fair market value. This is particularly so given Mr. Minoque's $55,000.00 figure is identical to the "hypothetical freehold" value I arrived at before applying a downward adjustment to reflect that what is being valued is Indian reserve land, not freehold land.
6. Analysis of the Evidence
(a) The appraisal of the market value of a typical lot
[60] Ms. McLeod in cross-examination agreed that there has been some notoriety in the media concerning relations between Jocko Point residents and the Nipissing First Nation over the rent negotiations. She did not disagree with the suggestion that over the last ten years there had been 23 front page articles in the local newspaper about the rent dispute. The trial was well attended by area residents.
[61] It is therefore perhaps helpful, before turning to consideration of the evidence, to deal briefly with the nature of the question before the Court. The parties freely entered into the existing leases. Ms. Morin testified that she did so with the benefit of legal advice and that she was told by her lawyer what her rights and obligations under the lease would be. The determination of the land value and resulting rent is not an assessment to be made on the basis of what may be socially or economically desirable or appropriate. Rather, as Mr. Justice Rothstein noted in the trial division Musqueam decision (1997) 137 F.T.R. 1, it is a conclusion based on the interpretation of the lease and the Court's assessment of relevant and credible evidence.
[62] The result will in largest part be based upon the Court's weighing of the appraisal evidence. Disputes of this nature have previously been before the Court, and in those cases the Court has commented upon the nature of land appraisal. It is not an exact science. In Rodgers, supra, Mr. Justice Cullen commented at paragraph 28 that:
In hearing the two "experts" present their views of what the rent should be, I am left with the feeling that, despite what they may say, this area of real estate appraisal is perhaps as far from an exact science as astrology is from the science of astronomy. Each witness relied heavily on his experience and subjective opinions to determine a value for the rent and in the end I am left with very divergent views of what procedure should be followed and what the value of the rent should be.
[63] The inexactitude of the science is reflected at paragraph 17 of the plaintiffs' written argument where in discussing the plaintiffs' appraiser's evidence it was argued that:
Nevertheless, RUECK presented three innovative approaches to the problem and cross-referenced the weighted results of each approach in order to arrive to his best and most honest guess at to what the value might be.
[64] Counsel for both the plaintiffs and the defendant agree that resolution of the dispute lies in substance in choosing in whole the evidence of one of the appraisers. Again, in the words of the plaintiffs' counsel in his written argument at paragraph 29:
It is respectfully submitted that here, the parties have chosen their witnesses and prepared two cases and that each is presented to the Court as an organic whole - i.e. where all the evidentiary elements of each case buttress one another so that the result of each case is holistic where the end result is greater than the sum of its interdependent parts, and that the unenviable task of this Honourable Court is to pick one or the other. It is conceded that no Court is bound to accept a proposition that makes no sense or a fact that is patently inconsistent. However, if no such proposition or fact exists, or if it is possible to excise this fact or proposition without collapsing that party's entire argument, then the Court should adopt in toto that argument which is the most "preferable" or the most "convincing" since that would be the side where the truth is most likely to be found.
[65] In the words of counsel for the defendant:
[...] it is Canada's submission that it is only if the evidence of the preferred appraiser is found to be demonstrably deficient on a particular point, and there is credible evidence going the other way, would it be appropriate for this Honourable Court to make any adjustments.
[66] Having carefully considered the evidence of each appraiser given both in direct and cross-examination, and having reviewed their written opinions received in evidence at trial, I have no hesitation in concluding that I prefer the evidence and opinion of Mr. Bell. I find it more trustworthy and reliable for the following reasons.
[67] First, I accept Mr. Bell's evidence that he took great pains to understand and to apply the principles established in Musqueam with respect to the determination of the fair market value of Indian reserve land surrendered for leasing purposes. Mr. Bell was not cross-examined to any significant extent on that evidence. In contrast, Mr. Rueck testified in cross-examination that:
I didn't go through the Musqueam decision in great detail. I used it just as a very preliminary guide as an indication that there is a difference between the two types of properties. And I based my analysis on market activity.
[68] Mr. Rueck later reiterated that he "didn't go into any deep analysis" of the Musqueam decision and that he "looked at the Musqueam [case] just as noting that there is a difference between freehold and leasehold".
[69] In fact, the majority of the Supreme Court of Canada in Musqueam wrote at paragraph 52 that "[d]iscounting the land because of its leasehold features is an error in law". The majority had previously noted, at paragraph 41 of the decision, that valuing reserve land "at its freehold value is consistent with an interpretation of the leases that sees the rent review clause as an attempt to generate an annual fair market return on a capital asset. The freehold value better approximates this return than does the leasehold value". This is consistent with Mr. Bell's testimony that it is a basic principle of appraisal practice that on a long-term lease the present value of all of the lease payments would generally equal the value of the land and the fee simple.
[70] Therefore, not only was Mr. Bell's opinion consistent with the applicable legal principles, but Mr. Rueck's report was prepared on a premise rejected by the majority of the Supreme Court, the premise being that land can be discounted simply because of its leasehold features.
[71] Second, Mr. Bell testified as to, and was not cross-examined upon, his familiarity with the Nipissing reserve and his experience in appraising on-reserve land. Mr. Bell did confirm on cross-examination his experience in appraising "Indian land". Mr. Rueck did not testify as to any prior experience in appraising reserve land or reserve land surrendered for leasing purposes. That unchallenged and relevant knowledge and experience, I find, enhances the likely reliability of Mr. Bell's opinion.
[72] Third, I found Mr. Bell to be a very thoughtful and credible witness. His opinion was cogently explained and I did not find it to be significantly limited or undermined on cross-examination. The fact that for each lease period Mr. Bell used two different methodologies, which each provided some supportive evidence of the value realized through the other methodology, provided some confirmation as to the reasonableness of the resulting opinions as to value.
[73] Fourth, I consider Mr. Bell's discount analysis to be more reliable than Mr. Rueck's discount analysis. The significance of this is that the pre-discount values used by each appraiser were very similar. The pre-discount values were:
| Mr. Rueck |
Mr. Bell |
|
| 1994 |
$40,000 |
$42,000 |
| 1999 |
$50,000 |
$51,500 |
The disparate values each appraiser finally came to therefore reflect their different discount approaches.
[74] What is immediately apparent with respect to the three different discount analyses Mr. Rueck conducted is the wide range of values each analysis produced. Those ranges were:
i) Realtor survey: from somewhat less and less than a 20% to a 50% discount;
ii) Variance in rate of depreciation: from a 37% to a 44% discount; and
iii) Jocko Point vs. Springer Township comparison
Paired data set: from a 53.92% to a 61.90% discount
Global analysis: a 56.79% discount.
[75] The ultimate discount rate of 52% applied by Mr. Rueck is not actually within the range generated by any method he used.
[76] Further, each method used by Mr. Rueck carried with it difficulties which, in my view, impact on the reliability of each method.
[77] For example, with respect to the survey of real estate practitioners, Mr. Rueck admitted that the question he posed to each realtor was not asked with reference to any specific time, and that if the question had, the realtors' answers may have been different. Mr. Rueck described this method to be a "starting point" upon which he did not place a great deal of reliance. I too place little reliance upon this discount method.
[78] With respect to the variance in rate of depreciation discount method, in this analysis Mr. Rueck first had to deduct the land value from off-reserve sales. This value was simply estimated by asking the buyer's realtor what he or she thought the land was worth, and by then looking "at some land sales to verify pretty much where the land value was". This introduces some measure of inexactitude because Mr. Rueck did not do a formal direct comparison analysis.
[79] Mr. Rueck then had to make further adjustments, taking into account the improvements on each parcel so the properties were "truly comparable" in order to establish a variance in the rate of depreciation. However, the only adjustment Mr. Rueck made on account of improvements was to adjust for the fact that five of the six freehold properties had basements. Adjustments Mr. Rueck did not perform to make the properties truly comparable included, but were not limited to, adjusting for: the difference between cedar and aluminum or vinyl exteriors; whether the improvements took the form of an architecturally designed home with superior cladding or a Viceroy pre-fab home; the existence of an indoor lap pool; and economic obsolescence.
[80] I accept the evidence of Mr. Bell that every extra which an off-reserve property had that is not adjusted for will cause the discount value to drop. That is, the differences between on and off-reserve properties becomes smaller to the extent consideration is given to any of the extras which affect the value of an off-reserve property. I find the failure to adjust for factors other than a basement to significantly impair the confidence to be placed in the approach.
[81] Further with respect to this method, the exercise is directed to determining the value of buildings without land. This is a very indirect way to get to what the lease requires, which is determination of the value of the land without the buildings.
[82] Turning to the third method of calculating the discount, which involved a direct comparison between Jocko Point and Springer Township sales, Mr. Rueck compared the off-reserve sales to on-reserve sales without making any adjustment, including deducting any value for land, from the off-reserve sales. Again, I accept Mr. Bell's testimony that the price of off-reserve properties will be higher because when one buys that property one acquires both the buildings and the land. It is to be remembered that if leasehold rents are at fair market value, the leaseholders' interest in the leased land should be valued at zero because the enjoyment of using the property is offset by the rent to be paid. The failure therefore to adjust for the fact that the off-reserve sales included a component for the value of the land results in little reliance being placed in this method. I do not accept Mr. Rueck's explanation that the value of the lessee's interest in the land at Jocko Point is equivalent to the value of the interest in land possessed by owner of fee simple property in Springer Township. Mr. Rueck gave a 70% weight to the discount value generated by this approach.
[83] Finally, before preferring the opinion of Mr. Bell, I have considered the specific grounds the plaintiffs rely upon in impugning Mr. Bell's opinion. They are that:
i) Nothing in Mr. Bell's report touches upon the flood plain character of the lots which Ms. Morin testified to; and
ii) The inadvertent substitution of an incorrect appendix to Mr. Bell's report for the first (1994-1999) lease term reflects "on his diligence and assiduity in presenting a coherent appraisal report". It is said that cross-examination on the correct appendix showed that Mr. Bell had not visited all of the properties referenced so that he could not account for improvements to the properties, rarely checked the facts at the Registry office, and made significant errors describing the size of properties he relied on as being comparable.
[84] Dealing with the first expressed concern, the lease is express that each tenant is responsible for all improvements, including site preparation. This was admitted by Ms. Morin in her testimony. Mr. Bell then testified as follows:
Q. Does it surprise you that the obligation for flood proofing is the obligation of the tenant?
A. No, it doesn't.
Q. Why is that?
A. In most lease situations that I'm involved in, the properties are leased in the original or vacant state and any improvements that have to be done to the property, either landscaping, site improvement or construction of buildings is the responsibility of the tenants.
Q. So flood proofing is an improvement?
A. Well, flood proofing would be included...as an improvement, yes, it certainly would be.
Q. So with reference to the typical lease, if the lessee or the tenant fails to flood proof, as required by the terms of the lease, assuming that the lease does impose that obligation on the tenant, and the land is flooded, is there any question in your mind as to whether the flooding should be taken into account when determining fair market rent?
A. No, the flooding should not...not the damage that is caused to the improvements because flood control wasn't done. We are just valuing the properties in their original state. The fact that the elevation of the properties are low should be taken into consideration when you are looking at the vacant value of the lands. However, in virtually every waterfront property I have ever seen, there is site improvement required. If it is not blasting, it is trying to get the driveway in or bringing the property up to the proper elevation. So it is considered from a point of view of how does it compare with other vacant unimproved properties. But if you are asking do you consider the fact that there is all this damage happening because of the flooding, that is not something that should be taken into consideration in valuing the properties in their vacant state.
Q. So when you were doing your evaluations for the purpose of determining hypothetical fair market value, I take it from what you just said, then, that you took into account the elevation of the Jocko Point properties?
A. I took into account elevation.
Q. What would be the consequences for the tenant if the improvements, any of the improvements or all of the improvements were added to the value of the land when calculating fair market rent?
A. Well, the rents would go up, and because the rents are based on an interest rate times the value of the property appraised, if you add any improvements, then the value of the property goes up and then the rent goes up.
Q. So at that point, the tenant, I take it, would now be paying rent on the improvements that they, in fact, have paid for?
A. Exactly.
Q. So I will see if I can ask the question in an inverted form to see what your view is. What would be the consequences for the landlord if the improvements that were not made to the land were taken into account when valuating fair market rent?
A. I think you have confused me. The improvements that were not...
Q. Well, suppose, for example, that if a tenant failed to flood proof the property, in other words, failed to make that improvement, and that had negative consequences to the land, if that was taken into account, what would be the impact for the landlord?
A. Once again, anything that drops the value of the land will, ultimately, reduce the annual rent, so the rent would drop.
Q. And it is your evidence that the flood plain factor or the factor of flooding has been taken into account in your analysis when you were determining hypothetical fair market value?
A. It was. [underlining added]
[85] Mr. Bell was not cross-examined on that evidence and I accept his evidence on the point. This, in my view, is dispositive of the plaintiffs' first concern. Mr. Bell considered the elevation of the property when determining the hypothetical fee simple of the land. Thereafter, the extent or absence of site improvement in the form of flood proofing was a matter relating to leasehold improvements.
[86] With respect to the second concern, it is correct that Mr. Bell's report for the first lease term, Exhibit J-3, was originally filed with the wrong appendix "A". (It contained the document which was appendix "A" to the second report, Exhibit J-4.) This was brought to the Court's attention in the direct-examination of Mr. Bell. Appendix "A" related to the hypothetical fee simple calculation. However, the body of the report itself contained the data relied upon, so that the report could be read without the aid of appendix "A". That appendix simply gave more data on the comparables so as to understand them better. The correct appendix was attached to an earlier version of Mr. Bell's report which had been filed in Court and served on plaintiffs' counsel.
[87] While this error is regrettable, I cannot conclude that the attachment of the wrong appendix after the opinion was reached on the correct data significantly impairs the reliability of Mr. Bell's opinion.
[88] As to the subsidiary points flowing from this, no specific references to the evidence were cited by the plaintiffs in support of its three concerns set out at paragraph 83 above. However, Mr. Bell testified that he did look at the lots which were shown on appendix "A". The evidence does not therefore support the submission that Mr. Bell did not view the properties.
[89] With respect to checking facts at the Registry office, Mr. Bell's testimony was that he did not do so personally. Only one error was suggested to him with respect to a sale price, which error could have been found by a registry search. This error was that with respect to the first sale listed on the correct appendix, the appendix showed a selling price of $50,000. A copy of the deed shown to Mr. Bell stated a sale price of $47,500. As to the significance of this error, at page 32 of his report, Mr. Bell relied upon the sale price of lots 1, 5 and 6 to establish a value of $47,500. I am not satisfied therefore that any error in overstating the selling price from $47,500 to $50,000 was material to Mr. Bell's opinion.
[90] Finally, it is not clear as to what evidence the plaintiffs refer to as being "significant errors" in describing the size of properties relied upon by Mr. Bell as being comparable. With respect to parcel 2 shown on appendix "A", the lot had a dimension of 96 feet in width and 150 feet in depth. It was recorded by Mr. Bell on appendix "A" as being 46 feet by 150 feet. Mr. Bell suspected a typing error. Mr. Bell testified as following in re-examination:
Q. Mr. Bell, just regarding the typo, 46 feet as opposed to 96 feet, taking into account that typo, does that make any difference to you determination of value?
A. No, it doesn't. That sale is very close in size to the subject. The value for the subject was $42,000 and this sale was $43,500 and I believe the sale was slightly superior to the subject.
Q. So no recalculation has to take place?
A. No.
[91] I accept that explanation.
[92] Mr. Bell was also cross-examined that the description of sale number 5 on appendix "A" did not include what appeared to be an old road allowance. However, Mr. Bell noted that notwithstanding the omission of specific reference to this parcel in the abbreviated land description, the overall size and description of the lot were consistent with the plan of survey. This evidence was not challenged.
[93] Neither of these matters is a material contradiction or qualification of Mr. Bell's opinion.
[94] I have also considered whether any modification is required to Mr. Bell's conclusions. Bearing in mind the submissions of counsel quoted at the outset of this analysis, I have not been satisfied that Mr. Bell's conclusion on any point is so demonstrably deficient as to warrant any adjustment by the Court.
(b) The interest factor for the 1999-2004 lease term
[95] The typical lease tendered as Exhibit J-1 provides:
Once the determination of the fair market value for the land is established by the Lessor's appraisers, the Lessor's representative(s), the Lessee or his representative(s) and the Band Council or its representative(s) will meet to negotiate the fair market rent based on the following conditions:
The yearly rental will be assessed by applying (multiplying) the rental indicator as determined by the Council of the Nipissing Band of Ojibways through negotiations with the Lessee(s) or his representative(s).
[96] The typical lease which counsel confirmed the Court could proceed upon, and which is cited and relied upon in Mr. Bell's reports, provides that once the market value of the lot is determined:
The yearly rental will be assessed by applying (multiplying) the average lending rate at which the Bank of Canada lends to the Canadian Chartered Banks to the said market value of the land.
For the purposes of this clause, the average lending rate shall be that rate herein specified, determined as of the first day of September in each of the five (5) years, immediately preceding the expiry date of the term herein set out.
There is a difference therefore in the two versions of the lease as to whether the rent is the product of land value and an agreed rental indicator or the product of the land value and an averaged Bank of Canada lending rate.
[97] Mr. Bell testified that the average Bank of Canada lending rate so quantified was 5.15%.
[98] The defendant however asserts a higher rate established by way of separate agreement. Ms. McLeod's evidence in chief with respect to this agreement was:
Q. Ms. McLeod, you have before you a letter from my colleague, counsel for the Jocko Point subdivision addressed to the Nipissing First Nation, dated March 25th, 1999; is that correct?
A. Yes.
Q. Do you recognize this letter?
A. Yes, I do.
Q. If you turn to page 2 of the letter, you will see a series of calculations. Could you please state to the Court the percentage which was used for the 1999-2004 rental increase?
A. 5.39 percent.
Q. Based on this 5.39 percent, did the Nipissing First Nation take further action with respect to this interest rate?
A. Yes. They reviewed the letter. They found it unacceptable and what they did was they took the appraisal report that determined the fair market value of the land and applied the 5.39 percent for the 1999 rentals. [underlining added]
[99] In cross-examination, Ms. McLeod testified:
Q. Just to deal with this interest rate problem right now and without compromising the objection that I made, there were other offers that were made in that letter at the same time suggesting that interest rate of 5.39 percent; is that right?
A. Yes.
Q. Did you accept any other offers that were made?
A. No, we didn't accept any of the offers because it didn't make sense to Council, the offers that were proposed in the letter.
Q. But you prefer the 5.39 percent interest rate?
A. Well, when you stated in the letter that it had to be determined according to the lease agreement, Council went forward and said, "Okay, determine the rents according to the lease agreement." [underlining added]
[100] Ms. McLeod's evidence does not in my view establish an agreement between the parties as to the applicable interest rate. Her evidence, as I understand it, is to the effect that the interest rate of 5.39% was proposed by the plaintiffs in conjunction with some proposal as to land value which was not acceptable to the Nipissing Band. The Band accepted the interest rate, but not the balance of the proposal. This evidence fall short of establishing a consensus ad idem as to the interest rate.
[101] However, in written argument the defendant observes that in the plaintiffs' statement of claim relating to this lease period, the plaintiffs allege in paragraphs 6 and 7 that:
6. The plaintiffs say that the lease itself contains a clause that defines how the new periodic rent is to be determined, to wit:
"... That the rental for the five (5) year period of the said term beginning on the first day of April 1994, and for each succeeding five (5) year period of the said term and any renewal thereof, shall be determined prior to the beginning of each such period and shall be based on the fair market value of the land at that time, without regard to the value of improvements placed thereon by the Lessee, but having due regard to the value of other demised lands in the area. Once the determination of the fair market value for the land is established by the Lessor's appraisers, the Lessor's representative(s), the Lessee or his representative(s) and the Band Council or its representative(s) will meet to negotiate the fair market rent based on the following conditions:..."
7. The plaintiffs says that the parties have agreed that the "following conditions" mentioned above will be that the rent shall be the fair market value multiplied by the average Bank of Canada prime rate for the month of September in each of the five preceding year. That average rate for 1994-1998 is 5.39%. [underlining added]
[102] The defendant in paragraph 4 of the amended statement of defence and counterclaim pleads:
With respect to paragraph 7 of the Statement of Claim, the Defendant admits only that the relevant Bank of Canada prime rate to be applied in determining fair market rents for the five-year period commencing April 1, 1999 is 5.39%. This is the rate proposed by the plaintiff and then agreed to and acted on by the defendant.
[103] On the basis of the evidence and the pleadings, the defendant therefore says that:
i) An admission made in a pleading is conclusive, and the Court is precluded for making a finding of fact different from the facts asserted and admitted in the pleadings. The Court can only make such a finding if the plaintiffs were given leave to withdraw the admission by amending their statement of claim. Such amendment after the taking of evidence would prejudice the defendant; and
ii) It is an established equitable principle of law that a party may be estopped from enforcing his or her strict legal rights where his or her conduct has led the other party to expect a certain state of affairs, or where it would be inequitable for that party to do so having regard to the dealings that have taken place between the parties. Given the agreement between the parties in this case as to the interest rate to be applied, as the reliance the defendant has placed upon this agreement, it is an appropriate case for application of the doctrine of estoppel.
[104] I have found that the evidence adduced at trial does not establish an agreement that the interest rate was to be 5.39%. However, in the absence of a concluded agreement it is necessary to consider the defendant's argument that the plaintiffs by their conduct are estopped from enforcing their legal rights. The defendant in argument does not particularize what actions have been taken to the defendant's detriment as a result of the correspondence received from plaintiffs' counsel putting forward the higher interest rate. The defendant did instruct its expert witness to prepare an appraisal report on the basis of both interest rates and no evidence of prejudice was adduced. In the absence of evidence as to actions taken to the prejudice of the defendant, I am not satisfied that equitable considerations exist which are sufficient to ground application of the estoppel doctrine.
[105] Of more substance is the first argument advanced by the defendant that a court is precluded from making a finding of fact different from that asserted by the plaintiffs and admitted by the defendant in the pleadings. Reliance is placed upon one authority, Canada Permanent Mortgage Corporation v. The City of Toronto, [1951] 0.R. 726 (C.A.) to the effect that admissions of fact are judicial admissions and are conclusive on the party making them.
[106] The plaintiffs simple answer to the defendant's argument is that:
Notwithstanding the defendant's submissions, the issue of the interest rate is a mechanical one, devoid of any credibility factor. It requires only that a phone call be made to the Bank of Canada to ascertain precisely what the interest rate was for the period in question. The plaintiff is satisfied that the defendant's appraiser made that phone call and that he is satisfied that the applicable interest rate should be 5.19% and not 5.39% as the plaintiffs mistakenly assumed when the pleadings were drafted. Furthermore, 5.19% is actually the defendant's appraiser's evidence, which the plaintiffs accept. In any event, the Court is not bound by any arithmetic error that can be corrected without reference to the credibility of the evidence. Courts regularly grant motions to have the pleadings conform to a jury finding. For example, if a plaintiff sues a defendant for $50,000 and the jury awards $75,000, the court will allow the plaintiff to amend his pleading increasing the claim to cover the award. [footnote omitted]
Notwithstanding this submission, no express motion to amend a pleading has been made by any party.
[107] There are, in my view, two points that are responsive to the defendant's argument that the pleadings are conclusive.
[108] First, while the plaintiffs alleged in their statement of claim an interest rate of 5.39%, the admission to that effect is the defendant's admission. Yet it is the defendant which through Mr. Bell's expert report and his oral testimony adduced conflicting evidence of the 5.15% interest rate.
[109] Second, the Federal Court of Canada has not followed the Ontario jurisprudence with respect to withdrawal of admissions. In Andersen Consulting v. Canada, [1998] 1 F.C. 605 (C.A,) the Court of Appeal wrote as follows at paragraph 12 and following:
[12] Different tests of varying stringency have been applied in different jurisdictions across Canada with respect to a withdrawal of admissions. At one end of the spectrum, the case law in Ontario, with respect to the interpretation of Rule 51.05 of the Rules of Civil Procedure, requires that the party requesting leave to withdraw an admission satisfy three conditions:
(1) that the proposed amendment raise a triable issue;
(2) that the admission was inadvertent or resulted from wrong instructions; and
(3) that the withdrawal would not result in any prejudice that could not be compensated for in costs.
[13] At the other end, the British Columbia courts have taken a more flexible approach and have not required as a condition essential to a withdrawal of an admission that the admission in the statement of defence be made inadvertently or hastily. Rather, they have adopted as a test that, in all the circumstances of the case, there be a triable issue which ought to be tried in the interests of justice and not be left to an admission of fact. Under such a test, inadvertence, error, hastiness, lack of knowledge of the facts, discovery of new facts, and timeliness of the motion to amend become factors to be taken into consideration in deciding whether or not the circumstances show that there is a triable issue which ought to be tried in the interests of justice.
[14] We prefer the approach taken by the courts in British Columbia which gives the Court seized with a motion to amend pleadings, including an amendment withdrawing or purporting to withdraw an admission, the needed flexibility to ensure that triable issues are tried in the interests of justice without injustice to the litigants. [footnotes omitted]
[110] In view of this jurisprudence from the Federal Court of Appeal, the jurisprudence relied upon by the defendant is not persuasive. It remains however that no motion to amend the pleadings has been made. In the absence of such motion, the interest rate sought in the statement of claim and admitted in the statement of defence must prevail.
7. Conclusion
[111] Having preferred the opinion of Mr. Bell over that of Mr. Rueck it follows that I find that the fair market values for the land are as established in Mr. Bell's reports.
[112] The defendant is therefore entitled to the rents which are derived from the application of those values to the percentages set forth at page 58 of Exhibit J-3 and, unless a motion to amend the statement claim is made, at page 53 of Exhibit J-4. The defendant is also entitled to succeed on its counterclaims for any rental arrears. The amounts of any such arrears are not in evidence.
[113] The defendant would also, in the normal case, be entitled to costs and to pre-judgment and post-judgment interest. No submissions were made by any party as to whether such awards would be appropriate and, if so, what the appropriate amounts would be.
[114] In view of these uncertainties, it is not possible for the Court to issue a formal judgment at this time. In the result, the parties are directed as follows:
1. As previously noted, the plaintiffs have made no express motion to amend their statement claim in T-1252-99 to conform to the evidence adduced at trial by the defendant as to the Bank of Canada rate. In the very unusual circumstance where it was the defendant Crown that led evidence of an interest rate contrary to that which the Crown had admitted in its statement of defence, and where implicit in the plaintiffs' written reply submissions may be a request for an amendment of the pleadings, the plaintiffs, if so advised, may move in writing by the filing of a notice of motion and written representations for an order amending the statement of claim in T-1252-99. Any such notice and submissions are to be served and filed within 14 days of receipt of these reasons. The defendant will then have the further period of 14 days from the date of service of the plaintiffs' materials to serve and file any responsive submissions in writing. Thereafter the plaintiff may serve and file any reply submissions within 5 days of the receipt of the defendant's material.
2. The defendant shall serve and file written submissions as to the issues of the quantum of its counterclaims, pre-judgment and post-judgment interest, and costs within 14 days of the date of receipt of these reasons. The plaintiffs may serve and file responsive submissions within 14 days of service of the defendant's materials on the plaintiffs. Thereafter, the defendant may serve and file any reply submissions within 5 days of the receipt of plaintiffs' materials.
[115] Thereafter, judgment will issue in accordance with these reasons and the submissions filed in response to my direction.
"Eleanor R. Dawson"
Judge
Ottawa, Ontario
December 18, 2002
1. The above quoted term is not in fact contained in the typical lease filed as Exhibit J-1. Counsel, however, agreed that this is the applicable term. See: transcript of evidence May 30, 2002 page 57, line 14 and following.
2. This is the value Mr. Bell orally testified to (see for example his evidence in volume 2 of the trial transcript at page 136) and the value which is extensively referred to in his appraisal report for the 1999-2004 term (Exhibit J-4). This was the value Mr. Bell used to calculate the applicable rents in his report. It is not, however, the value referred to at page 2 of his report. However, Mr. Bell was not examined on this apparent discrepancy.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
COURT FILE NOS.: T-1252-99 and T-1538-95
STYLE OF CAUSE: Jeannine Morin et al. v. Her Majesty The Queen
PLACE OF HEARING: North Bay, Ontario
DATE OF HEARING: May 28, 29 and 30, 2002
WRITTEN ARGUMENTS: Received on August 16, 2002, September 20, 2002 and September 27, 2002
REASONS FOR JUDGMENT
OF THE HONOURABLE MADAM JUSTICE DAWSON
DATED: December 18, 2002
APPEARANCES:
Mr. Hubert E. Mantha FOR THE PLAINTIFFS
Mr. Gary N. Penner FOR THE DEFENDANT
Ms. Stephanie Paul
SOLICITORS ON THE RECORD:
Mr. Hubert E. Mantha FOR THE PLAINTIFFS
Toronto, Ontario
Mr. Morris Rosenberg FOR THE DEFENDANT
Deputy Attorney General of Canada