Musqueam Indian Band v. Glass
T-1545-96
Rothstein J.
10/10/97
50 pp.
Determination of "fair rent" (to be calculated at 6% of "current land value") to be paid for land by lessees of 75 lots located in Musqueam Park on Musqueam Indian Reserve No. 2 in southwest Vancouver for 20-year period commencing June 8, 1995-Issues (1) whether "current land value" based on fee simple estate in land or interest in land on Indian reserve; (2) determination of "current land value"; (3) whether "current land value" based on unserviced or serviced land; (4) determination of servicing costs-Appraisers differ greatly as to current land value: $712,500 and $607,000 appraisals, using direct comparison method, for plaintiffs and $134,000 appraisal, using land residual method, for defendants-Plaintiffs' appraisals representing rent increases of 100 times prior rent, defendants', 20 times prior rent-Whether Indian lands should be valued by reference to other Indian lands and not by comparison with non-Indian freehold land-Current land value referring to actual value of land forming subject of leases-Determination of actual current land value must take into account Indians' unique interest in reserve land (general inalienability, coupled with fact Crown under obligation to deal with land on Indians' behalf when interest surrendered)-Indians' interest in reserve land having no counterpart in general law of real property-In instant case, greatest estate in land which can be granted by Crown on behalf of Musqueam Band in accordance with its surrender to Crown is long-term leasehold interest-Estate and tenure being valued for "current land value" purposes is 99-year leasehold on Musqueam Indian Reserve No. 2 unaffected by terms of current leases-Matters to be considered: Indians' jurisdiction over land, uncertainty as to property taxation, assessment for property taxation purposes by Indian authority, unrest on Indian reserves in B.C., non-natives not allowed to stand for election to body governing reserve and having no vote on issues such as planning, zoning or taxation, ministerial approval required for certain sales or mortgages or construction, services provided by City of Vancouver contracted but permanent arrangements not finalized-Evidence amply supporting proposition land on Musqueam Reserve may be expected to have lower value than neighbouring fee simple land off reserve-Considering lease term effect, economic obsolescence, double discounting, temporary impact of adverse publicity and weaknesses of land residual method, land valued at $302,000-Actual value determined using hypothetical fee simple value as benchmark-Hypothetical fee simple value of serviced land in Musqueam Park would be approximately $600,000 per lot or $45,000,000 for entire 75 lots in subdivision-Actual value having regard to long-term leasehold interest and Indian reserve features pertaining to it would be approximately 50% of fee simple values, $300,000 per average lot or $22,500,000 for all 75 lots-Agreement interpreted to mean land unserviced-Existence of roads not to be assumed for purposes of rent review-Cost of plan of subdivision not to be included for subsequent periods-Therefore, all servicing costs must be deducted from current value of serviced lots in Musqueam Park in order to return land to same state as they were on date of Master Agreement-Servicing and development costs to be deducted from serviced current land value of each lot.