The appellant ("Beaudet") was a partnership engaged in the construction of four adjoining apartment building, which it then rented out, resulting in a self-supply at fair market value of each building (including land) under ETA s. 191(3) when the first tenant commenced occupancy.
Lamarre J found that in "an ideal competitive market" (para. 81), the fair market value of a building would consist only of costs including indirect costs such as advertising and leasing costs and the builder's construction management fees (see para. 79). Here, there was no evidence of elements such as zoning restrictions which would establish a significantly higher value for the four buildings as a whole, so that there should be no upward adjustment over such costs.
In particular, she included financing and notional project management fees costs (estimated at 1.5% and 5% of total costs), and advertising expenses. Excluded from costs were cost overruns due to substandard ground conditions and a reduction (equal to the remediation cost) was made for problems relating to a leaking roof and substandard soundproofing.