Saugeen Cottagers Organization Inc. v. Canada ( Minister of Indian Affairs and Northern Development )
T-515-92
Strayer J.
9/9/93
13 pp.
Action for declarations plaintiffs having legal interest in leased lands, being right of first refusal to meet and match any bona fide offer to lease; existing terms and conditions of old lease govern relationship between parties in interim; new lease document of no legal effect -- Also seeking reference to settle terms and conditions of new lease -- Plaintiff association representing approximately 1,200 owners of cottages located on lands on Indian reserves leased from Crown -- Leases to expire April 30, 1991 -- Based on interim appraisal reports and recent leases issued in same general area, Band council resolving to raise rental rates by nearly 300% commencing in 1991 -- At further negotiating meeting agreed no new leases would be sent out for execution and lessees would pay old rent into suspense account pending completion of negotiation process -- Rentals, right of renewal, right of surrender, guarantee of access to beaches still unresolved -- Department subsequently sending out "standard form" lease -- Plaintiffs commencing action complaining no right given to cottagers to negotiate fair market rental for each five-year period; no guarantee of access to beaches; no right of surrender on payment of rent for year in which surrender taking place; no requirement of advance notice land not to be made available again for leasing prior to expiry of lease; no renewal option -- Plaintiffs obtaining injunction prohibiting Minister from initiating steps in respect of new lease, provided not preventing plaintiffs from signing such lease if so chose -- Most cottagers continuing to pay rents payable under old lease, as fixed in 1986, to Department and rents passed on to Band -- Old lease providing where Her Majesty, on advice of Band council, deciding in best interest of Indians to continue to lease demised land under such terms and conditions as Her Majesty "deems suitable", lessor shall have "right of first refusal of such offer" -- Action dismissed -- "Right of first refusal" in this context, where 1,200 leases would expire on same day, meaning Her Majesty undertook to give existing tenant chance to renew lease before offering lease to anyone else -- "Deems suitable" meaning discretion left to Her Majesty to decide what is suitable -- Unlike other leases, discretion of lessor to fix terms of offer not qualified in any way -- Perhaps offer of new lease must be made in good faith in sense representing genuine attempt to lease land and not to achieve some other purpose, but that does not mean must meet some standard of acceptability to third parties on basis of market -- Nothing suggesting Minister's offer, made on advice of Band council, knowing Band council considering two appraisals and certain other information Band council had with respect to leases of other reserve lands, made for ulterior purpose -- Her Majesty, as lessor in exercise of fiduciary duty to act in interests of Band, entitled to come to opinion new rental rates likely to maximize Band revenues by assuming rates could and should be paid by cottagers -- That plaintiffs' appraisers produced lower figures for appropriate rentals not altering that -- As injunction should not have been granted, plaintiffs liable for damages flowing therefrom -- After expiry of old lease all parties intended lessee allowed to stay on condition would comply with new lease once terms were finalized -- Damages consisting of difference between rents paid at old rates, and rent payable under new leases, plus interest -- Nothing suggesting plaintiffs permanently waived right to collect new rents.