Hodgson v. Musqueam Indian Band, 2017 FC 509
Gudmundseth Mickelson LLP regularly acts in high profile, complex commercial, regulatory and public law cases. In Hodgson v. Musqueam Indian Band, the entire neighbourhood of Musqueam Park on Indian Reserve lands on Vancouver’s Westside were faced with a potential eight-fold increase in land rent, potentially putting all of their family homes at risk.
CASE: Hodgson v. Musqueam Indian Band, 2017 FC 509
COURT: Federal Court Trial Division
COUNSEL: Howard A. Mickelson, K.C. as co-lead counsel with R.J. Randall Hordo K.C., and Allan L. Doolittle
MEDIA COVERAGE
CBC News: Musqueam reserve residents win court challenge over proposed 800% rent increase: http://www.cbc.ca/news/canada/british-columbia/musqueam-reserve-residents-win-court-challenge-over-proposed-800-rent-increase-1.4130879
Vancouver Sun: Vancouver leaseholders on Musqueam reserve lands win court fight against huge rent increases: http://vancouversun.com/news/local-news/court-rules-in-favour-of-vancouver-leaseholders-on-musqueam-reserve-lands-who-were-facing-huge-rent-increases
THE FACTS AND HISTORY OF THE CASE
In the 1960s the Musqueam Indian Band surrendered approximately 40 acres of land to Canada for the purpose of leasing the land. That land was developed into the neighbourhood of Musqueam Park, in Vancouver’s Westside, comprised of 75 residential lots. The lease for those lots contains a provision whereby ‘fair rent’ is to be determined periodically at 6% of the current land value.
Howard Mickelson, K.C., represented the group of leaseholders, and was successful at trial during the previous determination of fair rent for the period 1995 to 2015. That result was appealed all the way to the Supreme Court of Canada, who ultimately upheld the rents determined by the trial judge, averaging $10,000 per year, but altered the definition of the legal definition of the interest in land to be valued. In Musqueam Indian Band v. Glass, 2000 SCC 52, the Supreme Court of Canada determined that under the leases, the nature of the interest in land to be valued is that of a hypothetical fee simple interest in the reserve lands in an unimproved and unserviced state.
In May of 2015, the Musqueam Indian Band issued notices to the residents of Musqueam Park for rents for the 20 year period beginning June 8, 2015 averaging $80,000 per lot. This rent potential rent increase put all of the residents of Musqueam Park at risk of losing their family homes.
The leaseholders in Musqueam Park retained R.J. Randall Hordo, K.C. together with Howard and Allan to handle this crisis for the homeowners. The leaseholder’s legal team worked closely with an expert in real estate appraisal, Larry Dybvig, of Grover Elliot & Co., and an expert in subdivision costs and servicing, Nancy Hill, of AECOM, to arrive at an average rent of $21,151.
The trial was heard at the Federal Court over the course of several weeks in late 2016 and early 2017. Justice Mactavish entirely rejected the expert opinion offered by the Musqueam Indian Band, relying, preferring that of the leaseholder’s experts.
The Court arrived at an average annual rent of $24,480 per lot.
WHY IS THIS CASE IMPORTANT?
Commercial relationships involving reserve lands, and First Nations in general, are complex and are becoming increasingly important in British Columbia. This case in particular, emphasizes that although the Supreme Court of Canada had earlier provided guidance to the parties, the nature of the relationship of First Nations to reserve land remains a complex issue.
FURTHER INQUIRIES
If you have further inquiries about this or other commercial matters, please contact Howard Mickelson, K.C.