Musqueam Indian Band v. Glass, docket A-890-97

Date: 19990511

Docket: A-890-97

     PRESENT: THE HONOURABLE MADAME JUSTICE ALICE DESJARDINS

     OTTAWA, ONTARIO, TUESDAY, MAY 11, 1999

CORAM:      DESJARDINS J.A.

ROBERTSON J.A.

SEXTON J.A.

BETWEEN:

MUSQUEAM INDIAN BAND and CHIEF JOSEPH RALPH BECKER, ERNIE CAMPBELL, WAYNE SPARROW, LEONA M. SPARROW, NOLAN CHARLES, MARY CHARLES, JOHNNA CRAWFORD, GAIL Y. SPARROW, MYRTLE MCKAY, LARRY GRANT, and HER MAJESTY THE QUEEN

     Plaintiffs

     (Appellants)

     - and -

MARY GLASS, HIN F. KO, MABEL W. KO, ROY WESTWICK, GWYNETH M. WESTWICK, KERRY-LYNNE FERRIS, STEPHEN W. FINDLAY, NORAH C. FINDLAY, JERRY JANES, DIANA JANES, GREGORY PAPPAS, TASIE PAPPAS, SOLON S. WANG, PETER M. LEE, HERBERT M. LEWIS, ALEXANDER KALINOWSKI, KATARINA KALINOWSKI, JOHN W. WHITEFOOT, SHEILA M. WHITEFOOT, LISBET MACKAY, PIERRE DOW, MONA MCKINNON, WONG L. LEE, MAN-LOONG LEE, JOHN M. GLAISERMAN, JUAN L. G. CAM, ELIZABETH C. CAM, EVELYN M. MURRAY, WILLIAM T. ZIEMBA, JAMES R. THOMPSON, ANN B. THOMPSON, YUM C. LAU, IRENE LAU, JAMES Y.P. KING, TJIN K. TAN, EIJI MURAKAMI, MIYAKO MURAKAMI, THOMAS W.F. FUNG, AMY M. L. CHAN, GERTRUDE HENNEKEN, HANS T. HENNEKEN, HOWARD G. ISMAN, MARJORIE E. ISMAN, STANLEY EVANS, DOROTHY EVANS, KHI YOENG TJIN, WEN-TIEN TAI, KUY-HSIANG HUANG, PHYLLIS WEINSTEIN, PATRICIA LAI, WILFRED E. PATTON, JEAN M. PATTON, ATTILIO GIRARDI, MARY GIRARDI, IRMA E. BOULTER, GEORGE S. BOULTER, JOHN G. CRAGG, OLGA B. CRAGG, HOWARD E. CADINHA, ARLENE B. CADINHA, MARIA C. ORMOND, DOUGLAS R. EYRL, JUDITH F. EYRL, CHEUNG K. CHOI, CHAN P.K. CHOI, CELIA KAAN, CECIL S. C. KAAN, RAMON Y. KAN, HELENA KAN, LESLIE BARA, OTTILIA BARA, ALFRED K. LEE, ESTHER K. LEE, DIANA W. C. SUNG, DONALD C. GRAHAM, WINNIFRED A. GRAHAM, RONALD J. MACKEE, ALEXANDER H. WONG, STELLA L. WONG, EDWARD B. HUYCK, DOROTHY A. HUYCK, FREDERICK S. EDY, ELLEN V. EDY, VICTOR H. HILDEBRAND, JOHN E. EGAN, CHIK. CHING, SIU Y. CHAN, LAVENDER CHU, FREDERICK CHU, GEORGE E. RUSH, ANNE L. RUSH, HERTA J. NEUMANN, CORNELIUS NEUMANN, JAMES A. FORSYTHE, DIANE R. FORSYTHE, PETER J. FUNK, ELIZABETH FUNK, ELFRIEDE MACHEK, ADELHEID MACHEK, LILLIAN P. TOEWS, HUI C. KEUNG, PATRICIA H.K.S. WAH, VADILAL J. MODI, MIRA V. MODI, CHARLES H. SHNIER, ELAINE C. SHNIER, AGNES P.C. SHEN, CAROL M. LAU, DENNIS LAU, MARJORIE MCCLELLAND, ARTHUR NEE, LAURA T. NEE, DONALD W. SCHEIDEMAN, KATHRYN M. SCHEIDEMAN, WILLIAM N. KING, ALLAN J. HUNTER, GRACE K. HUNTER, GRACE NG, IRVING GLASSNER, NOREEN G. GLASSNER, PRISCILLA FRATKIN, NANCY B. BERNER, GREGORY HRYHORCHUK, DARCY L. HRYHORCHUK, ASTLEY E. SMITH, BETTY ANN SMITH, LILY R. ENG.

     Defendants

     (Respondents)

     JUDGMENT

     This appeal is allowed in part. The judgment below is varied by substituting that the annual rent for the defendants' seventy-five lots in Musqueam Park Subdivision for the twenty-year period commencing June 8, 1995, be calculated on the basis of an aggregate current serviced land value of $45,000,000, less aggregate servicing and development costs of $16,468,446 prorated to each of the said seventy-five lots with the resulting net number then multiplied by 6% , as set out in schedule 'A' attached to this order.

     The appellants are entitled to their costs in this appeal and in the Trial Division.

    

     J.A.

Date: 19990511

Docket: A-890-97

CORAM:          DESJARDINS J.A.

ROBERTSON J.A.

SEXTON J.A.

BETWEEN:

MUSQUEAM INDIAN BAND and CHIEF JOSEPH RALPH BECKER, ERNIE CAMPBELL, WAYNE SPARROW, LEONA M. SPARROW, NOLAN CHARLES, MARY CHARLES, JOHNNA CRAWFORD, GAIL Y. SPARROW, MYRTLE MCKAY, LARRY GRANT, and HER MAJESTY THE QUEEN

     Plaintiffs

     (Appellants)

     - and -

MARY GLASS, HIN F. KO, MABEL W. KO, ROY WESTWICK, GWYNETH M. WESTWICK, KERRY-LYNNE FERRIS, STEPHEN W. FINDLAY, NORAH C. FINDLAY, JERRY JANES, DIANA JANES, GREGORY PAPPAS, TASIE PAPPAS, SOLON S. WANG, PETER M. LEE, HERBERT M. LEWIS, ALEXANDER KALINOWSKI, KATARINA KALINOWSKI, JOHN W. WHITEFOOT, SHEILA M. WHITEFOOT, LISBET MACKAY, PIERRE DOW, MONA MCKINNON, WONG L. LEE, MAN-LOONG LEE, JOHN M. GLAISERMAN, JUAN L. G. CAM, ELIZABETH C. CAM, EVELYN M. MURRAY, WILLIAM T. ZIEMBA, JAMES R. THOMPSON, ANN B. THOMPSON, YUM C. LAU, IRENE LAU, JAMES Y.P. KING, TJIN K. TAN, EIJI MURAKAMI, MIYAKO MURAKAMI, THOMAS W.F. FUNG, AMY M. L. CHAN, GERTRUDE HENNEKEN, HANS T. HENNEKEN, HOWARD G. ISMAN, MARJORIE E. ISMAN, STANLEY EVANS, DOROTHY EVANS, KHI YOENG TJIN, WEN-TIEN TAI, KUY-HSIANG HUANG, PHYLLIS WEINSTEIN, PATRICIA LAI, WILFRED E. PATTON, JEAN M. PATTON, ATTILIO GIRARDI, MARY GIRARDI, IRMA E. BOULTER, GEORGE S. BOULTER, JOHN G. CRAGG, OLGA B. CRAGG, HOWARD E. CADINHA, ARLENE B. CADINHA, MARIA C. ORMOND, DOUGLAS R. EYRL, JUDITH F. EYRL, CHEUNG K. CHOI, CHAN P.K. CHOI, CELIA KAAN, CECIL S. C. KAAN, RAMON Y. KAN, HELENA KAN, LESLIE BARA, OTTILIA BARA, ALFRED K. LEE, ESTHER K. LEE, DIANA W. C. SUNG, DONALD C. GRAHAM, WINNIFRED A. GRAHAM, RONALD J. MACKEE, ALEXANDER H. WONG, STELLA L. WONG, EDWARD B. HUYCK, DOROTHY A. HUYCK, FREDERICK S. EDY, ELLEN V. EDY, VICTOR H. HILDEBRAND, JOHN E. EGAN, CHIK. CHING, SIU Y. CHAN, LAVENDER CHU, FREDERICK CHU, GEORGE E. RUSH, ANNE L. RUSH, HERTA J. NEUMANN, CORNELIUS NEUMANN, JAMES A. FORSYTHE, DIANE R. FORSYTHE, PETER J. FUNK, ELIZABETH FUNK, ELFRIEDE MACHEK, ADELHEID MACHEK, LILLIAN P. TOEWS, HUI C. KEUNG, PATRICIA H.K.S. WAH, VADILAL J. MODI, MIRA V. MODI, CHARLES H. SHNIER, ELAINE C. SHNIER, AGNES P.C. SHEN, CAROL M. LAU, DENNIS LAU, MARJORIE MCCLELLAND, ARTHUR NEE, LAURA T. NEE, DONALD W. SCHEIDEMAN, KATHRYN M. SCHEIDEMAN, WILLIAM N. KING, ALLAN J. HUNTER, GRACE K. HUNTER, GRACE NG, IRVING GLASSNER, NOREEN G. GLASSNER, PRISCILLA FRATKIN, NANCY B. BERNER, GREGORY HRYHORCHUK, DARCY L. HRYHORCHUK, ASTLEY E. SMITH, BETTY ANN SMITH, LILY R. ENG.

     Defendants

     (Respondents)

     REASONS FOR ORDER AND ORDER

     REASONS FOR ORDER

DESJARDINS J.A.

[1]      On December 22, 1998, Sexton J.A. delivered the reasons for judgment of the Court in this case. Robertson J.A. and I agreed with those reasons.

[2]      The judgment of the Court was, however, not issued. We requested instead, in paragraph 91 of our reasons, that within thirty days from the date of our reasons and pursuant to rule 394 of the Federal Court Rules, counsel for the appellants prepare for endorsement a draft judgment giving effect to those reasons (including costs). Counsel for the appellants was to seek approval as to form and content from counsel for the respondents and submit the same to the Court for signature. We added that if the parties could not agree as to the form and content of the judgment within the time specified, or if one or both parties considered it necessary to seek the Court's directions with respect to the preparation of the draft judgment, and in particular the calculation of servicing costs to be deducted, either party may bring a motion for judgment in accordance with rule 369 of the Federal Court Rules.

[3]      The parties have not been able to agree.

[4]      The dispute between the parties pertains to the types of servicing costs which should be deducted from the "current land value". The "current land value", itself, is to be determined, according to our reasons for judgment, in the matter indicated by the trial judge except that the full fee simple value of the bare lot should be used rather than the figures reflecting the 50% deduction.

[5]      The servicing costs, at issue in these motions, were dealt with at paragraphs 88 and 89 of our reasons for judgment in the following manner:

For the reasons of the trial judge and my supplemental comments, I agree that all servicing costs must be deducted from the fee simple value of the bare lots to determine the "current land value". Thus the cost of servicing will be deducted from the figure of $600,000 to arrive at the final value for the average lot.

At trial, the respondents' expert claimed that the services amounted to $117,818 per lot. The trial judge accepted his method of calculation, some components of which were based on the "current land value" of the lots. Since I have increased the "current land value" from the figures determined by the trial judge, these servicing costs will increase. Counsel on the appeal indicated that they could agree on the amount of these costs.

[Emphasis added]

[6]      At trial, Rothstein J. (as he then was) concluded at page 47 of his reasons, that:

For these reasons, all servicing costs must be deducted from the current value of serviced lots in Musqueam Park in order to return the land to the "same state as they were on the date of this (Master) agreement".

[Emphasis added]

[7]      With regard to how these costs should be calculated, he stated at pages 47, 48 and 49 of his reasons:

I now turn to the calculation of servicing costs in order to determine the amount to be deducted from the current serviced land value to return the land to the same state it was in on June 8, 1965. The plaintiffs have taken a firm position that if servicing costs are to be deducted only the "hard costs" should be deducted. They do not provide a rationale for that restrictive approach. As stated by Mr. Oikawa, in order to develop land and bring it to its current serviced value, more than just hard costs are involved. In cross-examination Mr. Grant did not disagree with this approach. All costs associated with servicing and development must be deducted to determine current value of "unimproved lands in the same state as they were" on June 8, 1965.

The parties agree to the quantification of certain "hard costs". However, the plaintiffs did not deal with any of the other costs in any detail or challenge any of the specific calculations. I only have the evidence of Mr. Oikawa that these other costs would be incurred and presumably are reasonable. The costs outlined in Mr. Oikawa's evidence are recognizable as appropriate ones to deduct to return the land to its unimproved state as at June 8, 1965.

While I accept Mr. Oikawa's soft costs as those associated with the valuation of serviced land, an adjustment must be made to account for serviced current value at which I have arrived. A number of development costs are related to the "gross income from lot sales" which he determined to be $19,050,000 as of June 8, 1995 but which I have determined to be $22,500,000 as of that date. These calculations will have to be adjusted to reflect gross income from land sales of $22,500,000.

The servicing and development costs are therefore the agreed upon hard costs plus the soft costs based on serviced current land value of $22,500,000. The result should be allocated equally to each of the 75 lots in Musqueam Park, rounded to the nearest thousand and deducted from the serviced current land value of each lot.

[Emphasis added]

[8]      The agreed upon hard costs are in the amount of $3,178,387 as found in exhibit 41.¹ They replaced Mr. Oikawa's estimates for "hard costs" and "design and survey fees" in his estimated servicing costs found in exhibit 3, opposite page 50.² The added hard costs and soft costs, which together comprised the servicing costs, amounted to $117,818 per lot as stated by Rothstein J. at page 43 and footnote 59 of his reasons.

[9]      Rothstein J. took into consideration, both Mr. Oikawa's method of calculation and the modification he himself made, when he wrote schedule 'A' attached to his order of December 11, 1997.

[10]      This being said, the draft order submitted by the respondents accords with our reasons for judgment. Their draft order is based on Rothstein J.'s order of December 11, 1997, to which adjustments were made reflecting the doubling of the "current land value" in accordance with our reasons for judgment of December 22, 1998.

[11]      The draft order submitted by the appellants does not accord with our reasons for judgment. Their draft order ignores Rothstein J.'s findings by rearguing such servicing costs as developer's profit, financing costs, property purchase tax and property taxes during holding. This cannot be done. Rothstein J. accepted all these other costs when he said, at page 48, as quoted above:

The parties agreed to the quantification of certain "hard costs". However, the plaintiffs did not deal with any of the other costs in any detail or challenge any of the specific calculations. I only have the evidence of Mr. Oikawa that these other costs would be incurred and presumably are reasonable. The costs outlined in Mr. Oikawa's evidence are recognizable as appropriate ones to deduct to return the land to its unimproved state as of June 8, 1965.

[Emphasis added]

     ORDER

     The motion for judgment of the appellants is denied. The draft order submitted by the respondents will form the basis of this Court's judgment. Costs of this motion are awarded to the respondents.

"Alice Desjardins"

     J.A.

     J.T.R., J.A.

     J.E.S., J.A

__________________

     ¹Appeal Book, vol. VII at 1232-33.

     ²Reply Record of the Appellants, page 1.