The Musqueam Indian Band surrendered reserve land to the Crown for leasing.
The land was subdivided, serviced, and leased to individuals for 99 years.
The leases provided for rent reviews, stating rent should be 6 percent of the 'current land value' of 'unimproved lands'.
The parties disagreed on whether 'current land value' meant fee simple value off-reserve or leasehold value on-reserve, and whether 'unimproved' meant unserviced.
The Supreme Court of Canada held that 'current land value' refers to the hypothetical fee simple value of the land on the reserve, which requires a 50 percent discount from comparable off-reserve land to account for Indian reserve features.
The Court also held that 'unimproved' means unserviced, so servicing costs must be deducted from the land value.
