Federal Court - Christian Aboriginal Infrastructure Developments ...

Federal Court - Christian Aboriginal Infrastructure Developments ... Federal Court - Christian Aboriginal Infrastructure Developments ...

22.01.2015 Views

Page: 342 [1289] This response, in my opinion, is reasonable. In my view, his report at Exhibit P-15, is an opinion premised upon other factors and other considerations than were addressed in the Mill Audit. The two documents deal with two very different mandates. His expectation losses were based on the reasonable assumptions that a $5 million upgrade and that the development of Phase 2 would occur. As a result, his assessment of the mill before the upgrade and development of Phase 2 does not negatively affect his projections. 2010 FC 495 (CanLII) [1290] Mr. Van Leeuwen was challenged in cross-examination about the LRF used in his projections. [1291] Mr. Van Leeuwen testified that he did not know specifically how SYFC measured its LRF. The possibility that the LRF assumed by Mr. Van Leeuwen was not accurate, could affect the quantity of lumber produced by 10 percent. Mr. Van Leeuwen himself acknowledged this; see page 2012. [1292] This could mean an approximate increase in costs per year of $300,000, which would result in a corresponding decrease in profits of the same amount; see pages 2013 to 2014. [1293] Mr. Van Leewuan was also questioned about his assumption that the LRF would improve over time, even without any additional investment. In my view, Mr. Van Leeuwen’s opinion that the LRF would improve in the future, without additional investment, was reasonable. Once the mill was operating on a steady basis, that is on a full-time basis without shut-downs occasioned by the lack of

Page: 343 a secure timber supply, the employees would become more efficient and able to maximize the production from the logs. [1294] The longer the mill was in operation, the more experienced and capable its employees would become and there would be a corresponding increase in productivity. 2010 FC 495 (CanLII) (v) Damages 2011 to 2020 [1295] I will now address the expectation losses for 2011 to 2020. [1296] There is a question as to the applicable time frame for calculating damages. Is it reasonable to assess damages by reference to a 20 year period In my opinion, the answer is “yes”. [1297] Mr. Van Leeuwen has provided detailed projections for a ten year period, that is 2001 to 2010. He did not carry out the same detailed analysis for the next decade, 2011 to 2020. Yet, he provided the written opinion that he had no reason to expect that the profit for the period 2011 to 2020 would differ significantly from those for 2001 to 2010. [1298] Mr. Van Leeuwen’s report addresses this at page 5 of Exhibit P-15 as follows: It is important to note that SYFC applied for, and expected to receive, a 20 year timber harvesting area (THA) of 200,000 m3 per year. IWMG has only provided a detailed ten year financial projection (2001 to 2010). However, it can be assumed that the SYFC mill would have had similar earnings from 2011 to 2020 based on typical 10 year and long term North American lumber supply/demand (price) trends. Although detailed annual financial

Page: 343<br />

a secure timber supply, the employees would become more efficient and able to maximize the<br />

production from the logs.<br />

[1294] The longer the mill was in operation, the more experienced and capable its employees<br />

would become and there would be a corresponding increase in productivity.<br />

2010 FC 495 (CanLII)<br />

(v) Damages 2011 to 2020<br />

[1295] I will now address the expectation losses for 2011 to 2020.<br />

[1296] There is a question as to the applicable time frame for calculating damages. Is it reasonable<br />

to assess damages by reference to a 20 year period In my opinion, the answer is “yes”.<br />

[1297] Mr. Van Leeuwen has provided detailed projections for a ten year period, that is 2001 to<br />

2010. He did not carry out the same detailed analysis for the next decade, 2011 to 2020. Yet, he<br />

provided the written opinion that he had no reason to expect that the profit for the period 2011 to<br />

2020 would differ significantly from those for 2001 to 2010.<br />

[1298] Mr. Van Leeuwen’s report addresses this at page 5 of Exhibit P-15 as follows:<br />

It is important to note that SYFC applied for, and expected to<br />

receive, a 20 year timber harvesting area (THA) of 200,000 m3 per<br />

year. IWMG has only provided a detailed ten year financial<br />

projection (2001 to 2010). However, it can be assumed that the<br />

SYFC mill would have had similar earnings from 2011 to 2020<br />

based on typical 10 year and long term North American lumber<br />

supply/demand (price) trends. Although detailed annual financial

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