Doral Holdings Ltd. v. The Queen, 87 DTC 5258, [1987] 1 CTC 398 (FCTD)

Martin, J:—The reasons for the judgment in this matter will apply, at the request and by the agreement of counsel for the parties, to causes T-1895-85 and T-956-86. Although the actions are in respect of the validity of reassessments, the quantum of capital gains and the amount of reserves, I have been requested to limit my findings to the Valuation Day value of certain lands of the plaintiff acquired in December of 1971 and sold in December of 1979. Once a December 31, 1971 value of the lands is fixed all the tax implications in dispute become resolved as a matter of calculation or by a formula upon which agreement has already been reached by the parties.

Accordingly I will limit my adjudication to a determination of the December 31,1971 valuation of the lands, subject only to the further agreement on the part of counsel and in the agreed statement of facts that the value shall, in any event, be not less than $1,431,612 and not more than $2,456,000.

The land which is the subject of these actions is situated in Welland, Ontario. It comprises an area of 48.849 acres upon which there was constructed, between 1974 and 1976, a shopping centre which had a floor area of about 230,000 sq. ft. the prime tenants of which are K-Mart, Woolco and Steinberg. In December of 1971 there existed a planned second stage of the development whereby the owners hoped to attract a major national department store to the location the effect of which would have been to increase the total floor area to something in excess of 350,000 sq. ft. and change the designation of the shopping centre to a regional as opposed to a district or local shopping centre.

The city of Welland is located in southern Ontario on the southern portion of the Niagara peninsula. Other nearby cities are St. Catharines and Niagara Falls, the populations of which in 1971 were, respectively, 110,000 and 67,000. Hamilton, which had a population of some 20,000 in 1971, is about 40 miles away and Toronto some 70 miles. In 1971 Welland had a population of about 44,000 people. Accepting the fact that in 1971 the major thoroughfare between Toronto and Niagara Falls was the Queen Elizabeth Way, which passed through St. Catharines and touched on Niagara Falls, Welland was, by comparison, somewhat out of the way.

Sometime in 1970, Mr. Ernest Allen, the president, and apparently the controlling shareholder, of the plaintiff became interested in developing a shopping centre in Welland. In a series of conditional agreements of sale made between September 1970 and March 1971 the plaintiff and the several vendors named in the agreements agreed to the purchase and sale of about 70 acres of land, 44 acres of which were eventually incorporated into the shopping centre site.

Each of the agreements entered into by the plaintiff made it a condition of the obligation to purchase the land that the land be rezoned for the purpose of constructing a shopping centre or, what amounted to the same thing, that the plaintiff obtain from the appropriate authorities all necessary approvals for a development plan.

Although some of the land to be acquired was already zoned commercial the major portion of the proposed shopping centre site (about 37 acres of the 62-acre piece of vacant land acquired from Drubud Developments Ltd.) was not. Because of the conditions contained in each of the purchase agreements it can be fairly assumed that the prices negotiated were not prices fixed for the land as it was then used and zoned at the time the agreements were made, but rather the prices named in the agreements reflected the market price for the land as rezoned for the purpose of a shoping centre development which date of rezoning was expected to be around the end of 1971.

This is particularly evident in the agreement between the plaintiff and Drubud Developments Ltd. This 62-acre lot had been purchased some four years earlier for $150,000. It was zoned largely as rural-agricultural. When, in September of 1970, the plaintiff offered to purchase it the agreement provided that the purchase would not take place until December 1, 1971 and only then if the plaintiff could obtain the necessary approvals for the construction of a shopping centre. The price of $438,872 set in September 1970, a 300 per cent increase in the price paid in 1967, in my view reflected, not the value of agriculturally zoned land in September 1970, but the value of land zoned commercially for the development of a shopping centre as of December 1, 1971.

Not only was it a condition of the plaintiff's obligation to purchase the Drubud land that it be rezoned for the development of a shopping centre, but the agreement for sale also provided that it was conditional upon the plaintiff being able to obtain options on three other properties fronting on Niagara Street and adjoining the Drubud land. It is apparent that Drubud was fully aware the land was part of a land assembly. By setting the conditions which it did on its obligation to purchase the lands, the plaintiff eliminated much of the risk which was, in my view, offset to a large extent by an increase in the conditional purchase price which, as it transpires, became the actual purchase price.

It was not in the plaintiff's or Drubud's plans that agriculturally zoned land would be sold for $438,000, that the plaintiff would assume the risk and cost of having it rezoned and then receive the increment in value as a result of the rezoning. What the vendor and the purchaser negotiated in September of 1970 was the price or value of the land assembled with other lands and zoned for a shopping centre development as of December 1, 1971. The price which they negotiated was $7,000 per acre.

Several other pieces of land which the plaintiff acquired or assembled for the shopping centre development contained areas varying from 1.00 to 1.47 acres. The purchase prices varied from $31,000 to $38,000 per acre. These four pieces of land were already zoned commercial and were all on Niagara Street, which was the main thoroughfare contiguous to the proposed development and the connecting highway to St. Catharines. All four pieces of land had residences constructed on them. Thus, although they formed only a small portion of the total proposed development, they were virtually essential to it. It is not surprising that the plaintiff paid what amounted to a premium for these lands, for the acquisition of them and the commercial street frontage which they had would have the effect of increasing the value of the back land acquired from Drubud, a matter which no doubt Drubud took into consideration when he negotiated the price for his 62 acres of vacant land.

Having obtained the conditional sale agreements the plaintiff then set out to have the land rezoned. In this respect he was fortunate to obtain the enthusiastic backing of the city which, on October 5, 1971, passed By-Law No. 5375 approving the zoning for a first stage development of a 230,000 sq. ft. shopping centre and a second stage development for a major department store subject to the approval of the Ontario Municipal Board.

Although approval of the Ontario Municipal Board was required for the By-Law and not finally received until June of 1972, and then to an amended By-Law, the plaintiff was confident enough, having received Council's endorsement for his proposed development, to purchase all the lands be- tween December 1,1971 and January 1,1972. The lands purchased, the prices paid and the areas acquired are as follows:

Lot 1 : Niagara Street

1.12 acres and residence

$35,000 ($31,250 per acre)

Lot 2: Niagara Street

1.47 acres and residence

$55,000 (37,671 per acre)

Lot 3: Niagara Street

1.40 acres and residence

$41,000 ($31,060 per acre)

Lot 4: Niagara Street

1 acre and residence

$38,000 ($38,000 per acre)

Lot 5: Niagara Street back land

62.969 acres of vacant land

$438,872 ($7,000 per acre)

The five acquisitions represented a total acreage of 67.686 at a cost of $607,872 for a total average price per acre of $8,980.76. Because only about 45 acres of the 62-acre vacant land purchase was incorporated in the development the average cost per acre for the shopping centre site was $9,700. If, on the other hand, the lots referred to in the preceding paragraph as nos. 1, 2 and 4 (and in the Hughes appraisal report as lots 64, 58 and 62) which, according to the plan appearing on the reverse side of page 7 in the Hughes report, were not included in the land required to be valued in these actions, the average cost per acre of the site was about $7,700.

Because I have concluded that the market value of the plaintiff’s land as of December 31, 1971 is less than the minimum value to which the parties have agreed, it is not significant that I determine an average acquisition cost per acre. I should say, however, that my determination would be the same if I assumed a cost of $9,700 per acre. I should also state, at this point, that because my view of the value of the plaintiff's land never reached the amount which would require me to make a numerical finding, most of the amounts contained in these reasons have been approximated.

Although the land was not zoned for the proposed development on December 31, 1971 the various appraisers all valued the land as if it had been rezoned for use as a shopping centre as of that date. Only the plaintiff's appraiser, Mr. S. Grant Edwardh, made an adjustment for the fact that the rezoning had not been completed. He applied a discount of ten per cent on his appraised value on that account.

At the hearing before me I was presented with four appraisals for the property, two on behalf of each party, as follows:

Plaintiff:

— S. Grant Edwardh:	$54,000 per acre
— Barry B. Humphreys:	$54,900 per acre
Defendant:
— J.W. Tannahill:	$23,600 per acre
— Robert W. Hughes:	$27,000 per acre

Translated into the cost and appraised values for the 45.949 acres comprising the plaintiff's shopping centre site as of December 31,1971 the resulting figures are:

In reaching a decision on this matter I have reviewed all four appraisals. Because Tannahill did not give evidence and was thus not subjected to cross- examination I have placed less weight on his appraisal than on the others. I also attached little weight to Humphrey's appraisal. He did not inspect the property and admitted that he did not do a “detailed” appraisal. It appears that he was given copies of the appraisals prepared by Tannahill and Ed- wardh and simply asked for his opinion. Humphreys concluded that Ed- wardh's estimate of $54,900 per acre was a more realistic one and valued the property at that rate per acre for a total value of $2.5 million. I note in passing that Edwardh's estimate was $54,000 per acre and not $54,900 not because of the difference in the resulting value, but because it, like other portions of Humphrey's report, appears to be inaccurate.

In his evidence Humphreys said that he relied heavily upon the comparable sale of the Limeridge Mall property at Hamilton. He described the sale as one of the comparable sales appearing in Edwardh's appraisal, as being sold in 1973 for $227,000 per acre which he discounted for two and one-half years at ten per cent interest, presumably to equate the 1973 dollar with the 1971 dollar, reducing the price paid to $178,000 per acre. He then observed that it was in a superior location and concluded that the market value of the plaintiff's property was $54,900 per acre.

Edwardh's report does indeed refer to the Limeridge Mall sale but in substantially different terms. Edwardh reports that although the bargain was made in 1973 the closing date was 1978. He also reports that the sale price at the time of closing in 1978 was $184,000 per acre and not $227,000 per acre in 1973. Edwardh noted that at the time of bidding one of the bidders estimated the additional costs of servicing the 61-acre site for the Limeridge Mall on Hamilton Mountain would be about $4.5 million the costs of which were to be for the developers' account but most of which were eventually paid by the city of Hamilton.

I do not have to decide between the appraisers, Humphreys and Edwardh, which has more accurately described the Limeridge Mall transaction. I have noted the substantial differences in the description of it by the appraisers and will disregard it as a comparable sale.

Humphreys used two other comparable sales both of which occurred in Burlington, one of 43 acres in 1982 for $276,000 per acre and the other of 12 acres in 1983 for $255,000 per acre. Humphreys applied what he described as a "slight time adjustment" to reduce the first to $96,000 per acre and the second to $81,000 per acre and concluded, as already indicated, that the Burlington locations were superior to the plaintiff's property which, he said, had a value of $54,900 per acre.

I do not question Humphreys' qualifications and have little doubt that he is capable of preparing an acceptable appraisal. However the appraisal which he made of the plaintiff's property is of no assistance to me in reaching a decision on its market value as of December 31, 1971. I have disregarded the sale of the Limeridge Mall property in Hamilton and, having nothing more than the barest of description of the two Burlington sales which occurred ten and twelve years after the date fixed for valuing the plaintiff's property, and Humphreys' conclusion that the locations are superior to the plaintiff's property, I can find no rational basis on which Hump hreys could have concluded that the market value of the plaintiff's property was, on December 31, 1971, $54,900 per acre.

There remains, in respect of the plaintiff's claim that his property had a December 31,1971 valuation of $2,456,000, the appraisal of Mr. Edwardh. In this respect, if I have appreciated the thrust of his evidence, it is fair to say that significant to his valuation is the proposition that the plaintiff's land on December 31,1971 was marketable for use as a regional shopping mall and that the value of land marketable as a regional shopping mall is significantly higher than land as a local or district shopping mall.

Once a site has this potential, argues the plaintiff, it enters, not just the local market, but the provincial or even national market where much higher prices are paid for the land.

Having entered that market, the plaintiff goes on to say, one must look, not so much to the prices paid for other lands in the vicinity of the land to be valued, but to lands throughout the province i.e. the regional market area, to find comparable sales. According to this theory a sale of land for a regional shopping centre in the heart of Toronto may be used, with minor adjustments, as a basis for determining the value of land on the outskirts of the city of Welland.

Because, the argument continues, in valuing the plaintiff's land, the defendant did not consider the concept of the land being used as a regional shopping centre and the plaintiff's appraiser did, the valuation assigned to the land by Edwardh is to be preferred over that assigned to it by Hughes.

The appraisers were generally in agreement that what distinguishes a regional shopping mall from a district or local shopping mall is its size, at least 350,000 sq. ft. of floor space, and its ability to draw a major department store such as Sears, Eaton or The Bay as a major tenant in addition to the usual Loblaws, Steinberg or other grocery outlet and K-Mart, Woolco, Zellers or other like variety store.

In general, I accept the plaintiff's reasoning to the extent that a land owner could reasonably expect to receive a higher price for land which he could market for use as a regional shopping centre as opposed to land which he could only market for use as a local or district shopping centre. There are, however, in the marketplace for regional shopping centres, degrees of attractiveness for any given site. Potential purchasers will look primarily to the volume of sales which can be anticipated i.e. profits. This in turn will depend upon a multiple of factors such as density of population, accessibility, median income of the prospective customers, growth potential of the region, proximity of competitors and so on.

It follows that the value of a site, in the regional market, diminishes in direct proportion to the diminishing attractiveness of each factor which is considered so that at the lower end of the range of attractiveness the value of a site for a regional shopping centre will likely approach the value of a site for a local or district shopping centre.

In determining whether a given site is even in the regional shopping centre market at a given time one must distinguish between a mere possibility and a likely probability. In this respect there is no clearly defined point at which one can say with certainty that a given site is or is not marketable as a regional shopping centre site. True, some sites will clearly fall into that category and some will not, but there will be marginal sites which may or may not qualify for that market. In my view, in order to establish that a site at a given time is in the regional shopping centre market there must be established more than the mere possibility that sometime in the future the site may be developed as one.

Indeed for the marginal site which barely makes it into the regional shopping centre market, I would not expect to see an instant dramatic increase in value resulting from its proposed use as a regional shopping centre as opposed to its proposed use as a district shopping centre. By a "dramatic increase in value" I mean to say in the order of three or four hundred per cent.

In my view the plaintiff's land was one of those marginal sites. It is true that the city, in October of 1971, expressed a strong desire to have a regional shopping centre and that the plaintiff intended to develop one. These facts only tend to show that the site could be offered in the regional shopping centre market, not that it could be sold in that market. The type of evidence to establish that the site was in that market would be firm commitments from the types of tenants for the total floor areas which, when occupied, would constitute a regional shopping centre. The plaintiff did not have those commitments by December 31, 1971 or any even approaching them.

In December of 1971 the site was not zoned for the development of a regional shopping centre. Although there existed a strong possibility that the appropriate zoning would be obtained it was not certain. As it transpired the zoning was not confirmed until July of 1972 and further legal hurdles were not overcome until 1974 at which time construction, which was not completed until 1976, commenced.

While the use of a site for a regional shopping centre depends on its zoning, the zoning of a site for use as a regional shopping centre does not by that reason alone place the site in the regional shopping centre market. That depends, not on the zoning, but on the marketplace. The zoning, in any event, anticipated a development in two stages, the first for a 230,000 sq. ft. mall and as a second, later and potential development, the addition of a major department store. According to the report of Mr. McGuire, the vice- chairman of the Ontario Municipal Board, who conducted hearings into the rezoning in December of 1971, the October 1971 By-Law should be amended to

. . . best assure that the property will be held in abeyance for a period of time sufficient to reasonably enable the attracting of a major department store, for say, the next five years.

McGuire's recommendation, which was accepted by the Board and implemented by the city by By-Law No. 5526 passed on June 6, 1972, referred to the portion of the land which was to be reserved for the second phase of the development and which was planned for occupation by a major department store, if one could be obtained. In other words at or about December 31, 1971 the planned use of the land was as a district or local shopping centre having 230,000 sq. ft. of space combined with a possibility at a later stage of the addition to the development of a major department store if one could be found. In December 1971 this was a mere possibility, and not enough in my view, to characterize the land for valuation purposes as being in the market place for a regional shopping centre.

As it transpired the plaintiff was never able to attract a major department store to the site. Allen said that the shopping centre had performed beyond his expectations and that his only disappointment was his inability to add a major department store. In so far as a major department store tenant may be a condition precedent to classify a shopping centre as a regional one the plaintiff's property does not qualify, even now.

There were, at the relevant period, a number of other factors which, in my view, tended to keep the plaintiff's site out of the regional shopping centre market. The relatively small population of Welland, the proximity of St. Catharines, a much larger city with a much larger regional shopping centre, and the proximity of Niagara Falls, again a larger city, which was, at the time, planning to build its own regional shopping centre. There was also, some 40 miles away, the large city of Hamilton with its shopping centres.

Virtually surrounded by larger centres with existing or planned regional shopping centres, with a very limited population to draw on, and somewhat off the major traffic thoroughfare, the plaintiff's site could not then, in my view, be reasonably characterized as being in the regional shopping centre market. Even if it could, under those circumstances it would be at the most a marginal site the value of which at that time would not be significantly higher than its value for use as a district shopping centre.

It follows from the conclusion that Edwardh's appraisal, in so far as it determined the value of the plaintiff's land by equating it with sales of lands used for regional shopping centres in other large population areas is not very persuasive. Even if the plaintiff's site could be classed as being in the regional shopping centre market in 1971, it would have to be classed as being in the regional shopping centre market in 1971, it would have to be classed as only marginally in that market and, in my view, substantial downward adjustments would have to be made in the comparable sales used by Edwardh.

In this respect Edwardh used six other sales as comparable sales. Sale numbered 5 was the Limeridge Mall sale in Hamilton to which I have already referred and, for the reasons given, have disregarded. Sale numbered 6 for $68,000 per acre in 1974 in Niagara Falls was not a sale at all but only an unexercised option open until 1978 and thus has no probative value at all. Sale numbered 3, on Edwardh's own assessment, was not really a comparable sale and thus be disregarded.

Sales numbered 1 and 2 in Mississauga and Brampton were of considerably smaller acreages than the plaintiff's property and were in major population areas with considerably different market potential than the plaintiff's property. The price per acre of those sales at $76,000 and $60,000 per acre respectively indicate to me something of much more value than the plaintiff's marginal site in a relatively unpopulated area. Edwardh discounted those sales by 15 per cent and ten per cent respectively to equate them in value to the plaintiff's site. In my view that adjustment, bearing in mind the differences in the location of the properties, is totally inadequate.

Likewise sale numbered 4 used by Edwardh is another sale in the Toronto area (Etobicoke). The property was purchased in 1972 for $85,000 per acre and has been discounted in value by 15 per cent to equate it to the value of the plaintiff's site. This sale, along with sales numbered 1 and 2, occurring in a significantly different economic environment are not reliable comparable sales. They tend to prove only that property in those areas has a higher value than property in the area of the plaintiff's land.

What I find most disturbing in Edwardh's appraisal is his failure to deal with the purchase price of the plaintiff's property. I agree that the purchase price of a piece of property is not conclusive of its market value but when, in 1987, one seeks to place a value on a property as of December 31, 1971, and that property was purchased in the open market in December of 1971, I am drawn to the conclusion that the purchase price paid at that time should at least be a factor in arriving at a market value. In this case the documents evidencing the purchase of the several properties comprising the plaintiff's site demonstrate that the properties were sold and valued as of December 1971 as land zoned for development as a shopping centre. There is nothing to suggest that the vendors and the plaintiff in those sales acted at anything but arms length and that the vendors and the plaintiff willingly participated in each transaction.

I accept the proposition that an assembled site can have a greater value than the combined or total value of its constituent parts and that the acquisition of high priced frontage will flow a greater value to adjacent back land. Surely these are matters of adjustment to a market price established for the same land a few days earlier rather than by comparison with sales of land in major metropolitan areas miles away and made, in some cases, many years later. Edwardh's report, in my view, is seriously flawed by his failure to deal with the amount paid by the plaintiff for the land a few days prior to the time at which he was required to value it. His report does not satisfactorily explain to me how that value went from about $10,000 an acre to $50,000 an acre in such a short time.

Furthermore, Edwardh was aware of but did not use as a comparable sale the sale of a 93-acre piece of land in Niagara Falls for $12,000 per acre. The agreement of sale was made on June 7, 1971 with a date of completion of March 1, 1972. It was a condition of the completion of that sale that the land be zoned for use as a regional shopping centre prior to the closing. Thus, in my view, the vendor and purchaser in that agreement fixed the price as the price for land zoned for use as a regional shopping centre and not as the price for agricultural land. The site boarded on the Queen Elizabeth Way, was in a city which, although larger than Welland, was comparable in size to it, and was relatively close to the plaintiff's land. As well, the price was established and the sale took place at times which very closely paralleled the plaintiff's acquisition of his property in December of 1971 and, as with the plaintiff’s site, the Niagara Falls site took several years to develop.

When Tannahill suggested this sale as a comparable one Edwardh replied in writing on September 11,1985 as follows:

. . . One of the sales Mr. Tannahill presented was that of the shopping centre constructed in Niagara Falls in about 1975 or 1976. Generally, the developer purchased about 80 acres of land for approximately $1,000,000.00. Mr. Tannahill informed us 40 acres of this land were useable and that the land was to be considered as raw land. This land was unserviced and unzoned, in fact, he informed us it was zoned agricultural. The owners took 2 or 3 years to bring this site to the construction stage which is not unusual for this type of venture. It would be my opinion that raw land is worth no more than 50% of land zoned and ready to build and that this sale tends to support my value and not reduce it.

What apparently escaped Edwardh was the condition which limited the purchaser's obligation to purchase the Niagara Falls site unless it was rezoned for use as a regional shopping centre. Even disregarding this oversight on Edwardh's part, his attribution of a 100 per cent increase in value would, at most, raise the value of the plaintiff's land to about $20,000 an acre and not to $50,000 an acre.

Instead of using that transaction as a comparable sale Edwardh chose as his comparable sale the one numbered 6 in his report. This sale, as I have already noted, was not a sale at all but an unexercised option of the same Niagara Falls property which was entered into in 1974 and exercisable up to May of 1978.

Under the several circumstances to which I have made reference I do not find Edwardh’s appraisal of the plaintiff's property convincing and I do not accept his valuation as realistic.

I am left with the Hughes appraisal of $27,000 per acre or $1.2 million. He started with the price paid for the properties in December of 1971 and adjusted for changes in those values between the time of the purchase and December 31, 1971, a few days later. He ignored the fact that the land had not been zoned for development as a shopping centre and valued it as if it had.

Each of the smaller properties which the plaintiff had purchased were reduced in value by 30 per cent and the back land was increased in value by 300 per cent to give a value range between $21,000 and $27,000 per acre. His downward adjustments appear to have been made on the basis that the plaintiff paid a premium for the residential properties which, although small, were essential to the development and on the basis of the proposition that one will pay more per acre for a smaller piece of land than for a large tract.

His upward adjustment of 300 per cent on the back land was done on the basis that the acquisition of the frontage, and more valuable properties, on Niagara Street caused a portion of that additional value to flow into the back land upon completion of the assembly. The additional value of the assembled land was thus assigned. Just precisely how Hughes fixed his downward adjustment of 30 per cent and his upward adjustment of 300 per cent is not clear to me.

Counsel for the plaintiff argued that any adjustment of more than 50 per cent is unreliable. Counsel for the defendant submitted that this is so only when applied to a comparable sale of another property and not when applied to the property which is the subject of the appraisal.

It appears to me that the adjustments made by Hughes were somewhat arbitrary, particularly the 300 per cent upward adjustment. The only comparable properties upon which Hughes could base his adjustments were the December 1971 sales of the same properties. The adjustments thus had to have been made on the basis of what Hughes terms "plottage", which is the proposition that assembled land has a greater value than the sum of the values of each part.

With that proposition I agree but I was not given any rational explanation for the choice of either a 30 per cent downward adjustment or, more importantly, the 300 per cent upward adjustment. In the event I do not find Hughes' appraisal very convincing.

Counsel for the plaintiff addressed me on this possibility at the close of the hearing. He submitted that if, for some reason, I was not satisfied with the values assigned by the several appraisers I could determine, on the evidence before me, including the appraisals, what would be a fair market value for the plaintiff's land as of December 31, 1971. I have given consideration to this suggestion and I have concluded that the market value of the plaintiff's property as of December 31, 1971 was significantly less than the values assigned to it by either Hughes, Edwardh or Humphreys and less than the value assigned to it by Tannahill.

Because of the agreement of the parties that the value assigned shall not in any event be less than $1,431,612 I will assign that value to the plaintiff's property for the purposes of this litigation and direct that the appropriate reassessments be referred back to the defendant for recalculation on that basis. I also direct that the maximum reserves be allowed as agreed by the parties in paragraphs numbered 6 of the agreed statements of facts filed in each of the actions.

The plaintiff is given leave to move to judgment drafted by him and approved by counsel for the defendant in accordance with these reasons pursuant to paragraph 2(b) of Rule 337 of the Federal Court Rules.

There will be no costs in this matter, either party and party costs or solicitor and client costs. The defendant has not by any action on Her part or on the part of Her Minister provoked unnecessary litigation and thus this is not a proper case for solicitor and client costs. While technically the plaintiff has succeeded in its claim to have the reassessments set aside and ordinarily should be entitled to its costs, on the issue of substance between the parties the defendant has been successful. However, having determined that it would accept a higher valuation for the property than that upon which it based its notice of reassessment I do not understand why a revised notice of assessment was not issued notwithstanding the several requests made on the part of the plaintiff to this effect. That, and what appears to have been other failures on the part of the defendant to deal with the matters raised by the plaintiff on a timely basis, have led me to the conclusion that there should be no order as to costs.

Order accordingly.