Founders Square Ltd. v. Nova Scotia (Attorney General)

Founders Square Ltd. v. Nova Scotia (Attorney General) Court Court of Appeal Date 2001-03-22 Citation 2001 NSCA 49 Docket 164997, CA 164691 Judge/Registrar/Adjudicator Roscoe, Elizabeth A. (Honourable Justice) (CA); Freeman, Gerald B. (Honourable Justice) (CA); Flinn, Edward J. (Honourable Justice) Document Type Decision Relations Library Sheet - Founders Square Ltd. v. Nova Scotia (Attorney General) - 2001 NSCA 49 - 2001-03-22 - Library Sheet Decision Content Date: 03222001 Docket No.: CA 164691 & 164997 NOVA SCOTIA COURT OF APPEAL [Cite as: Founders Square Ltd. v. Nova Scotia (Attorney General), 2001 NSCA 49] Freeman, Roscoe and Flinn, JJ.A. BETWEEN: FOUNDERS SQUARE LIMITED Appellant - and - THE ATTORNEY GENERAL OF NOVA SCOTIA, representing Her Majesty the Queen in Right of the Province of Nova Scotia Respondent BETWEEN: THE ATTORNEY GENERAL OF NOVA SCOTIA, representing Her Majesty the Queen in Right of the Province of Nova Scotia Appellant - and - FOUNDERS SQUARE LIMITED Respondent __________________________________________________________________ REASONS FOR JUDGMENT __________________________________________________________________ Counsel: George W. MacDonald, Q.C. and Jane E. O’Neill, for Founders Square Limited Michael T. Pugsley, for The Attorney General of Nova Scotia Appeal Heard: January 23, 2001 Judgment Delivered: March 22, 2001 Revised Decision: The text of the original judgement has been corrected incorporating the text of the erratum (released May, 2001). THE COURT: Appeal is allowed with costs and disbursements; cross-appeal is dismissed without costs per reasons for judgment of Freeman, J.A.; Roscoe and Flinn, JJ.A. concurring. FREEMAN, J.A.: [1] Founders Square Limited developed a project consisting of modern office space and restored historic buildings on land owned by the Province of Nova Scotia in the heart of downtown Halifax under an unusual arrangement with the province. This appeal is from a trial court decision that the arrangement was not a contract, and therefore not enforceable with respect to an alleged long-term leasing provision. Background Facts 1) The Founders Square story has its genesis in the 1970's when the provincial government, then led by Premier Gerald Regan, acquired a number of derelict buildings bounded by Prince and Hollis Streets and Bedford Row in the immediate vicinity of Province House, where the Legislative Assembly is housed. The intention was to raze the buildings, which had been acquired for an outlay of about a million dollars, and build a central office space, chiefly to house various government departments then scattered about the city. John Buchanan, then leader of the opposition in the house, later premier, and now a senator, praised the acquisition of this key real estate as an astute move. 2) Only later was it realized that the historic significance of the buildings, one of which had been the workplace of Joseph Howe during much of his journalistic career, would become a significant problem for the government. Leaders of the movement to preserve heritage properties and streetscapes took up the cause and demolition became a less attractive option. After Mr. Buchanan’s Progressive Conservatives defeated the Regan Liberals the Heritage Properties Act, (R.S.N.S.1989, c. 199) was passed in 1980. The buildings were registered as heritage properties and thus, unless deregistered, became legally exempt from destruction. They were also protected under the Halifax Municipal Development Plan. 3) Donald Power, Deputy Minister of the Department of Public Works and its successor departments until November, 1984, would have been responsible for overseeing the demolition of the old buildings and construction of the new office tower. But his department had no experience with restorations and Mr. Power did not want it to be involved. In the meantime the buildings were in such disrepair they were in danger of collapsing, and continuing to deteriorate. Pressure from the heritage activists was mounting. 4) Armour (Ben) McCrea and his companies had been instrumental in the preservation of a number of old buildings near the waterfront and their development into attractive commercial space. He had received government support in the form of a 35-year lease of space for the Nova Scotia College of Art and Design in the old Morse’s Tea building. Mr. Power turned to him for advice as an expert in restoring historic buildings. 5) After inspection and review, Mr. McCrea reported in November, 1979 that it would not be economically feasible to preserve and restore all the buildings and incorporate them with new office space. The only economical approach would be to demolish all or most of the buildings and re-develop the land. This approach was not acceptable to the province. 6) For the next three years the buildings continued to crumble and pressure mounted on Mr. Power to do something. With cabinet approval he sent out a call for anyone interested to make proposals for a development that would preserve the heritage buildings - an absolute requirement - and incorporate new office space. Mr. Power intended that the government would eventually take over the completed development, but in the meantime the developer would receive an 80-year ground lease. 7) Mr. Power designed a detailed proposal and development process under the control of his department, subject to cabinet approval. He engaged the services of William Hayward of the accounting firm Doane Raymond to assist in evaluating the proposals. Stages I and II identified interested parties and assessed the proposals. Interest was less than anticipated. By Stage III Proposal Development only Mr. McCrea’s Armour Group Limited, which incorporated Founders Square Limited on May 31, 1983, was left in the running with a plan that met the government’s requirements to restore the historic buildings. The Stage III Proposal Development included the following: 1. Exchange of a letter of intent and a bid deposit of $100,000 between the Province and successful proponent(s). 2. Establish the basis of a development agreement between the City of Halifax and proponent(s), refine and clarify graphic documentation. 3. Submit updated revised/refined proposals for appraisal. 8) The Armour Group initially proposed building 102,850 square feet of new rentable space and restoring 34,200 square feet of rentable space in the existing buildings, provided the government agreed to a long-term lease of 30,000 square feet at an “economic rent” to amortize the additional cost of the restorations, estimated at $3,000,000. That amount, referred to as “extraordinary expenses” in the negotiations, was included in the $25,000,000 total cost of the project. Of the total, $21,730,000 was financed by a 30 year mortgage and Founders provided the balance. Some minor discrepancies occur in references to the space involved depending on whether gross or overall areas, including 10,000 square feet of parking, as opposed to net or rentable space, are intended. It was considered that it would be more difficult finding tenants for the restored space, and that the rental rate for those areas would be lower. 9) Mr. McCrea met with Mr. Power and Mr. Hayward on June 3, 1983. The following summary appears in the appellant’s factum: McCrea met with Power and Hayward in early June 1983. McCrea made notes of the meeting. The Province does not have copies of the proposals or any notes or any other documentation concerning the meeting or review of the proposals. At trial McCrea’s notes were reviewed in detail with McCrea, Power and Hayward. At the meeting the following key points were discussed: (a) The additional cost for the project because of the necessity of restoring the heritage buildings was approximately $3,000,000.00. (b) To make the project feasible, McCrea would require the Province to commit to lease 30,000 square feet, primarily the floors containing the restored space, at a rental rate sufficient to enable Armour to amortize the cost of construction of the total project over a 30 year period. McCrea would take the financing and leasing risk for the remainder of the space. (c) McCrea proposed amortizing long term debt over a 30 year period. The assumed interest rate was 10%. (d) The Province proposed a larger project than that proposed by McCrea so that it could get a better return on its land lease. A second meeting was held between McCrea, Power and Hayward in June 1983. Power again said that he wanted the project size increased so that the Province would receive larger land lease payments and thus a better return on its investment. McCrea was concerned about the feasibility of a larger project. He pointed out that if he agreed to increase the size to approximately 200,000 square feet of rentable space, the Province, in turn, would have to agree to increase its commitment to lease from 30,000 square feet to 50,000 square feet to offset the market risk of a larger project. 10) Mr. Power wrote Mr. McCrea on June 29, 1983, to inform him that the executive council had met on June 22, 1983 and accepted his group’s proposal “subject to section 106 - Stage III review of proposal.” At a subsequent meeting Mr. Power emphatically informed Mr. McCrea that the acceptance was only for the purpose of continuing negotiations. Mr. McCrea noted in the margin of the letter that the Stage III review was the “negotiating stage.” This stage included: 4. The developer will modify his plans and specifications as required within 120 days. 5. Finalize land negotiations. 6. Undertake negotiations for development agreement with the City of Halifax. 7. Exchange letter of intent between the Province and the developer based on the agreed land lease/purchase and the proposed design plans and specifications. The Cabinet Committee 11) On June 22, 1983, the same day the Armour proposal was accepted, the clerk of the executive council so advised The Honourable Jerry Lawrence, Minister of Government Services, which under the Public Service Act, R.S.N.S. 1967, c. 255 had the management and supervision of government lands and buildings and which was funded by a departmental budget. The clerk also advised the minister that the executive council had agreed that a meeting be held as soon as possible to look into all details of the Founders Square proposal, to be attended by the premier and Mr. Lawrence, together with the Honourable Ministers Roland J. Thornhill, Joel Matheson, Q.C., Terence Donohoe, Edmund Morris and R. Fisher Hudson, as well as Mr. Power and Mr. McCrea. This group of ministers, “the cabinet committee”, thereafter exercised control of the project on behalf of the government. 12) The trial judge noted in his review of the facts that: Witnesses who had been cabinet ministers at the time stated that undertakings made by a committee of this kind were always honoured by the full cabinet and were considered to bind the government. 13) The respondent submits that the cabinet committee lacked jurisdiction because no order in council was passed authorizing it to bargain with Founders Square Limited in place of the Department of Government Services. In my view the presence of Mr. Lawrence on the committee meant the Department of Government Services was not displaced, but continued to exercise its authority through the committee, which augmented the powers of the department with the decision making capacity of the cabinet. The subject matter of the contract clearly fell within the purview of the contracting ministers (see Western Canada Wilderness Committee v. Alberta, [1993] A.J. No. 832.) To an objective observer, the purpose of the executive council in creating the cabinet committee was to form an agency for the specific purpose of getting on with Founders Square, that is, for binding the government in a contract with a developer to expedite the construction of the project. By that time it was clear that only Mr. McCrea’s group offered the prospect of getting the job done on terms acceptable to the province. Few developers were interested because of the additional costs of restorations, to which the government was firmly committed. The cabinet was going to have to provide financial assistance in some form, by way of capital grant or long term lease. The very fact such a committee was formed attests to the importance the province placed on this development. I am not persuaded that an order in council was a statutory requirement, particularly in these circumstances, but if there had been such a requirement, the absence of an order in council would not have defeated the purpose the cabinet committee sought to achieve, and did achieve. 14) Where, as here, there is an intention by a government to be bound and a minister or group of ministers exercising actual and ostensible authority, the absence of an order in council has not been found determinative. See Somerville Belkin Industries Ltd. v. Manitoba (Man. C.A.), [1988] M.J. No. 113 (C.A.); R. v. CAE Industries Ltd. et al. (1985), 20 D.L.R. (4th) 347, and J.E. Verreault & Fils Ltée. v. Quebec (Attorney General), [1977] 1 S.C.R. 41 at 47 where it was held that “a contract made by an agent of the Crown acting within the scope of his ostensible authority is a valid contract by the Crown.” 15) In my view there was no want of formality to fetter the government side in negotiating a contract with Founders Square Limited. The laws of contract applied to these two parties as they would have to two private citizens. Their dealings resulted in a contract within the meaning of the following definition in The Law of Contract, Fridman Fourth Edition, at p. 5: The idea of contract is promissory in nature, but, from the standpoint of the law, the essence of contract is agreement, or, as it was put in the classical period of the English common law, consensus ad idem. Contract is a jural relation that is founded upon agreement, that is, upon the manifestation of a mutual concordance between the parties as to the existence, nature and scope of their rights and duties. A contract is a legally recognized agreement between two or more persons, giving rise to obligations that may be enforced in the courts. By such an agreement the parties not only restrict their present or future freedom to act, by the limitations imposed upon themselves by the agreement: they are creating a legal rule, or set of legal rules, a legal regimen, binding as regards themselves and only themselves. 16) Here the evidence is clear that the parties intended to bind themselves and did bind themselves when they reached agreement at the meeting on October 12, 1983. On the government side they bound the Crown in a manner that does not permit a subsequent government to negate the commitment. The Negotiations 17) At the time the cabinet committee was formed no decision had been made either by the government or Founders Square to proceed with the project, although its general form had been sketched in. Final decisions had to be made as to the rentable area and the form of government participation. 18) Mr. McCrea’s notes from his first meeting with the cabinet committee in early August, 1983, say that he was “advised cabinet committee struck to make ‘final’ decision on redevelopment. . . .” A note in the margin says “so much for June letter.” 19) The notes indicate that the cabinet committee was anxious to involve Mr. McCrea with The Bank of Nova Scotia, which had intended to finance the development by a former rival developer. “When I started to object to proceedings with bank D. Power came down on me like a ton of bricks. Letter of June not commitment to do other than negotiate.” 20) As a result of his first meeting with this group Mr. McCrea went to Toronto with the premier, Mr. Power and others on August 11, 1983, to meet with officials of The Bank of Nova Scotia, which had been involved in the financing of the rejected proposal and which the province hoped to involve with Mr. McCrea’s proposal. This hope was dashed when the Bank was adamant that heritage buildings would have to go. Mr. McCrea attempted to prepare plans which would satisfy The Bank of Nova Scotia but this proved fruitless. 21) In early October, 1983, discussions were resumed with Power and Hayward and the cabinet committee focused only on the Founder proposal. 22) The following account of the crucial events of October, 1983, is not based on findings of fact by the trial judge but rather on the uncontradicted evidence of those who took part, and the pro forma statements then under discussion, as summarized in the appellant’s factum, which I accept as accurate. During the course of negotiations between the Cabinet Committee and Founders, the Province again took the position that it required that the size of the proposed project described in its Stage II proposal from Founders be expanded to have approximately 200,000 square feet of rentable space. Mr. McCrea again told the Province that it was not economically viable for Founders to proceed with the development, either under the initial or the expanded size, without financial assistance from the Province, either in the form of capital infusion or through a long-term commitment. Mr. McCrea told the Cabinet Committee that he was prepared to increase the size of the development to satisfy the Province’s wishes on the condition that the Government commit to lease 50,000 square feet of space, instead of 30,000 square feet, of space in the building, for a term equal to the term for financing. This area represented approximately 25% of the net rental area in the larger project. This commitment was essential to Founders so that it could undertake the extraordinary costs to be incurred to comply with heritage legislation, and to minimize the additional leasing risk from the expansion requested by the Province. At that time, Mr. McCrea told the Province that he contemplated that the cost of development would be amortized over a 30-year period, but that he would not know the exact term until his financing had been arranged. On October 12, 1983 Mr. McCrea met with Premier Buchanan, Mr. Lawrence, Mr. Power and other members of the Cabinet Committee. At that meeting, Mr. McCrea reviewed revised pro forma financial statements with the Committee. McCrea had reviewed those statements with Power earlier that day. These revised pro forma financial statements were similar to those contained in the Stage II proposal. However, they provided for an expanded building as requested by the Province and an expanded space commitment by the Province as requested by Founders. The revised pro formas, which were accepted and became part of Founders Proposal, set out the following: a) Total net rentable area 200,600 sq. ft.; b) Annual ground rent to Province of $100,000; c) Long-term pre-lease of 50,000 rentable square feet @ $18.50/sq. ft. per annum; d) Amortization of estimated development costs at 10% over a period of 30 years; f) Allowance for tenant improvements at $7.00/sq. ft.; g) Estimated development costs of $25,425,000; h) Mortgage of $21,000,000 at 10% interest amortized over 30 years; i) Operating costs and property taxes at approximately $8.50/annum. Founders and the Province agreed, at the Cabinet Committee meeting, that Founders would proceed with the project containing a total rentable area of approximately 200,600 square feet. In exchange, the Province would financially support the project by leasing a minimum of 50,000 square feet of space, primarily on the floors contained in the restored space, for a long term, being the period of time required to enable Founders to amortize the development costs. The initial rent was to be $18.50/sq. ft. as shown on the pro forma statements. The rate would be adjusted, from time to time, to recognize any change in the mortgage rate being applied to the long term debt. Everyone present at the Cabinet Committee meeting agreed that Mr. McCrea told them, and they understood that Mr. McCrea would not go ahead with the project, at all, if he did not receive the long term lease commitment from the Province. In a letter dated October 20, 1983, Mr. McCrea sent a copy of the revised pro forma statements to Mr. Power. In this letter, Mr. McCrea confirmed that he would be proceeding with the larger project of 200,600 rentable square feet. He also advised that the Land Lease and Development Agreement was being sent to Mr. Power that day and that he wanted the matter to be dealt with expeditiously. On October 31, 1983, Premier Buchanan held a press conference in the Red Room of the legislature to announce that the Province had “accepted a development proposal from the Armour Group, of Halifax, to restore a group of pre-Confederation buildings at the corner of Prince and Hollis Streets. At the press conference, Premier Buchanan was asked if the Province was contributing any funds to the development. He responded by stating that the Province was not making any capital contribution to the project but that it had agreed to a long-term lease of 50,000 square feet of space in the project. Lawrence was present at the press conference and heard the Premier’s statement. At trial, Mr. Buchanan testified that if the Province had not committed to lease 50,000 square feet of space on a long-term basis from Founders at the Cabinet Committee meeting, he would not have made the public announcement on October 31, 1983. 23) The full text of the letter of October 20, 1983, from Mr. McCrea to Mr. Power is as follows: Dear Don, We have reviewed the current draft of the Agreements and we understand our Solicitor, Mr. Dickson, will be forwarding those to you this date. We are enclosing under this cover an updated financial Pro Forma with respect to the larger scheme. We had delivered plans with respect to this scheme to you some time ago. As per our discussions, it would be our intention to proceed to the City of Halifax for approval of a development agreement reflecting this larger scheme. A final decision by Founders with respect to the final development size will have to be made prior to the working drawing stage and will fall within the bounds of approximately 140,000 to 180,000 square feet. We would confirm your agreement to this scenario. We are very concerned that continuing delays proceeding with the Project, by further deferring the application to the City of Halifax, will undermine our key tenancy and market viability. There are an increasing number of Projects proposed and started and while the location of Founders is ideal, it obviously can be defeated by pure volume of space availability particularly with respect to the financing. We would respectfully urge you to have this matter concluded at an early date. 24) Mr. McCrea was not examined at trial as to what he meant by a final development size falling within the bounds of approximately 140,000 to 180,000 square feet, and no other evidence was called specifically to explain the meaning. His counsel explained on the appeal that these figures referred to new construction as opposed to space available in the restored buildings, important in the development agreement with the city. The latter could not be determined with any certainty until some demolition was done to ascertain their structural soundness and what portions of each building could be saved. While the total rentable area of 200,600 square feet had been decided, the proportion of new and old construction would not be known in detail until working drawings could be prepared based on accurate data. In light of the discussions leading up to acceptance of the 200,600 square foot total, which Mr. McCrea referred to as the “larger scheme,” the reference to plans with respect to that scheme, the use of the 200,600 square foot figure as the basis of income and expense calculations in the pro formas and the immediate context of the development agreement required from the City of Halifax, I accept counsel’s explanation as eminently reasonable. Completion of the Project 25) The requirements of the negotiating phase of the project, “Stage III”, which were referred to in the June, 1983, acceptance letter, appear to have been satisfied by the conclusion of the meeting with the cabinet committee on October 12, 1983. The evidence is clear that the parties reached agreement at that time and entered into a contract to proceed with the Founders Square project. All essential requirements of both sides for proceeding with the Founders Square project were known and agreed to at the October 12 meeting. There is no evidence of any further negotiations between the developer and the cabinet committee after that time, no evidence that anything remained to be negotiated, nor any evidence of anything that was negotiated save the individual leases, which were contemplated as the means by which the 50,000 square foot commitment was to be fulfilled after the complex was constructed. 26) After the cabinet meeting Mr. McCrea carried out the steps outlined in the “Stage IV Development” phase of the process, which required him to obtain development and building permits from the City of Halifax before the province was required to execute the land lease and development agreements which he had forwarded in October, 1983. The ground lease was signed and the development permit obtained in April, 1984. Mr. Power did not respond to the Development Agreement until June 14, 1984. 27) Mr. McCrea had sought to have the long term lease commitment contained in the development agreement but Mr. Power refused. 28) Questioned about his discussions with Mr. Power on this point, Mr. McCrea testified: A. That it was my position that the development contract with the Province should contain all of the references and all of the commitments by the Province to take 50,000 square feet of space in the development that was being created. Q. And what was Mr. Power’s position with respect to that? A. Well, his position -- his position, I guess, was that he didn’t want to do that, he wanted to have the -- that portion of the agreement that deals with the leasing by the Province to be a separate document. Q. And did he explain to you why? A. Well, I’m not sure I knew at this point of time why. I knew that was his position. I don’t believe it was until later that I understood why. But later I understood from him that the reason for that position was that that was the policy of his department that all leasing matters be confidential, and that since the development contract that was being entered into between Founders Square and the Province was and had to be a public document, that all of the -- all of that portion of the agreement that related to the Province taking space in the development had to be by way of a separate agreement. Q. Okay, thank you. A. Which was intended to be confidential. 29) In his evidence Mr. Power was asked on cross-examination: Q. Now, Mr. Power, you did not want to have that commitment to rent 50,000 square feet contained in the development agreement because the development agreement was a public document, isn’t that correct? A. Yeah, I would think. Q. And the commitment was only reduced to writing because Mr. McCrea required it for financing purposes. A. That could be. 30) The appellant’s factum explained the position in October, 1984: In the late summer and early fall of 1984 Founders had already expended in excess of $3,000,000 on the project. The Development Agreement had not been signed, and without documentation Mr. McCrea was having difficulty securing financing to construct the project. Mr. McCrea told the Province that he needed a letter stating that the Province had agreed to lease space in Founders Square. Mr. Lawrence signed a letter in this regard dated October 4, 1984 on the understanding that Mr. McCrea “needed it to get his money”. Power also knew that McCrea required a letter for that purpose. The October 4, 1984 letter was signed by Jerry Lawrence. Power had no recollection of the letter, or an earlier draft, or of discussing either with McCrea. McCrea discussed the draft with Power and wanted some changes. Power assured him that the agreement was “long term” and Power wanted to keep the word “negotiate” in the letter because he wanted to “keep him honest” with his mortgage rates. At this time McCrea’s father died in New Brunswick. When McCrea returned to Halifax, the October 4, 1984 letter was put in front of him for signature. He considered the letter less than perfect, but since he required something from the Province for financing purposes, he signed the letter. Jerry Lawrence considered the letter merely restated the commitment that had been made in October 1983; viz. the Province would lease 50,000 square feet in Founders Square for a long term and at economic rent. 31) The text of the letter of October 4, 1984, on the letterhead of the Minister of Government Services and addressed to Founders Square Limited, is as follows: Dear Sirs: The Province of Nova Scotia as represented by the Minister of Government Services (the “Lessee”) offers to lease from Founders Square Limited (the “Lessor”) 50,000 square feet within ten (10) per cent more or less on floors 2 to 6 inclusive of the building known as Founders Square located on Prince-Hollis Street, in the City of Halifax, Province of Nova Scotia, which is the subject matter of a Headlease between the Lessee and Lessor. The form of lease will be the Department of Government Services lease form. The term of the lease shall be for five years from the commencement date. The Lessee shall have the option to renew the Term every five years at a rental rate to be negotiated. The term of the Lease shall commence and the Lessee shall be responsible for the payment of rent in compliance with all the terms thereof from the date which is the first day of the month following the expiry of 90 days’ notice by the Lessor to the Lessee that the premises and the project are substantially complete and an occupancy permit has been granted. This date shall be the commencement date. The annual rental shall be computed at the rate of $18.50 per annum for each square foot of space and the Lessee will pay additional operating expenses up to $6.00 square foot per annum, plus escalation of operating costs over the base year of the lease. The Lessor agrees to provide the Lessee with a Lessee improvement allowance not to exceed Seven ($7) Dollars per square foot. If the terms of this offer to lease are acceptable, please indicate the same by signing in the space provided and return a copy to my attention. 32) Mr. McCrea signed for Founders Square Limited to the effect that it was “Accepted the 4th day of October, 1984.” 33) The letter was accepted by the bank, financing was finalized, money flowed, construction proceeded, and substantial completion was reached in the fall of 1986. In that year tenants began to occupy the building. Individual leases at economic rent were negotiated between the province and Founders Square Limited to fulfil the 50,000 square foot commitment, and other leases were signed at market value rents to meet space requirements by various government departments. The 50,000 square foot commitment was taken up by the Department of Advanced Education on a renewable five year lease and the Department of Mines and Energy on an 11 year lease. 34) George Moody and John Leefe joined the cabinet in November 1983 and both became aware of the long-term commitment to lease space in Founders Square. Mr. Moody subsequently became chairman of the Management Board and the Space Committee, both of which were involved in leases of commercial space for government departments. Mr. Moody was briefed by Michael Zareski, who succeeded Mr. Power as Deputy Minister of Government Services, and understood that “we had a long-term commitment for 50,000 square feet at Founders Square and it was tied to economic rent, we were tied in to the restoration cost.” By “economic rent”, he said, he understood that “there was additional cost for the restoration aspect of it, and my understanding, that part of the rent went to look after those costs.” 35) All went smoothly until 1991 when the Honourable Donald Cameron, who had succeeded Premier Buchanan, made a public announcement that the province was considering breaking various leases it had with developers. When the first lease, under the 50,000 square foot commitment, came up for renewal, the province took the position that the commitment was only for five years and had been met. Officials did not respond to Mr. McCrea’s request to contact Mr. Buchanan or Mr. Lawrence, who was no longer Minister of Government Services, to clarify the arrangement. They relied on their interpretation of the October 4, 1984, letter signed by Mr. Lawrence, to support their position. 36) The appellant’s factum describes the situation after 1991: By May 31, 1994 the Province was leasing only 35,407 square feet of space under the terms of the original agreement. As of January, 1999 the Province is not leasing any space under the terms of the original agreement. The Province does lease 60,000 square feet of space in Founders Square but the rental rate is significantly below the rate required to enable Founders to amortize its long term debt which was incurred to construct the project. Founders responded to a tender call from DPW (the Department of Public Works) for space to house all of the government tenants who leased space in Founders Square as of November, 1997. In order to avoid the financial disaster which would result if all of those tenants vacated at once, and in recognition that the tender call permitted bids for any class of building, Founders tendered for a rate which would just enable it to survive economically. The tender rate was $5.80 per square foot versus an economic rental rate of $13.29. At trial, Founders sought a declaration that the Province had agreed to lease a minimum of 50,000 square feet of space in Founders Square on a long-term basis at an economic rent which was to be the amount required to permit Founders to amortize the development costs, fully leveraged, at the interest rate being paid on the long term debt from time to time. Further, Founders sought damages for breach of collateral contract, and negligent misrepresentation. Moir, J. dismissed all of Founders’ claims. The Appellant appeals from the Decision and Order of Justice Moir. The Decision at Trial 37) The first paragraph of the decision of Moir J. contains the gist of his decision: Founders Square says the province is obligated to remain and to pay rent calculated by formula on 50,000 square feet for about another fifteen years. Such an obligation is not to be found in any lease or other written contract. Founders alleges a parole contract made by the government in 1983, before any of the numerous leases and before Founders was even incorporated. Alternatively, Founders claims the government made actionable misrepresentations to it, or, at least, to persons on behalf of a company to be incorporated. There was no contract. Nor, was there any misrepresentation. (Mr. McCrea testified that Founders Square Limited was incorporated on May 31, 1983.) 38) The high degree of deference owed by appeal courts to findings of fact by trial judges is well understood. Both parties cited the following passage from the judgment of Flinn, J.A. in Parker v. Parsons (1997), 160 N.S.R. (2d) 321 (N.S.C.A.): Concerning the trial judge's findings of fact, and his acceptance of the opinion of Dr. Nichols, the standard of review which applies is as set out by McLachlin J. in Toneguzzo‑Norvell (Guardian Ad Litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114 (S.C.C.). Justice McLachlin said at p. 121‑ 122: It is by now well established that a Court of Appeal must not interfere with a trial judge's conclusions on matters of fact unless there is palpable or overriding error. In principle, a Court of Appeal will only intervene if the judge has made a manifest error, has ignored conclusive or relevant evidence, has misunderstood the evidence, or has drawn erroneous conclusions from it: see P.(D.) v. S.(C.), [1993] 4 S.C.R. 141, at pp. 188‑89 (per L'Heureux‑Dubé), and all cases cited therein, as well as Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, at pp. 388‑89 (per Wilson J.), and Stein v. The Ship "Kathy K", [1976] 2 S.C.R. 802 at pp. 806‑8 (per Ritcie J.). A Court of Appeal is clearly not entitled to interfere merely because it takes a different view of the evidence. The finding of facts and the drawing of evidentiary conclusions from facts is the province of the trial judge, not the Court of Appeal. . . . 39) The appellant pointed out that an appeal court owes less deference to inferences made by a trial judge, citing MacIsaac v. Catholic Episcopal Corp. of Antigonish (1996), 154 N.S.R. (2d) 214 at § 20: . . . An appeal court is as well placed “to draw inferences from primary facts as to the trial court.” (The conduct of an Appeal, Sopinka and Gelowetz at p. 43 and cases cited.) 40) Justice Cromwell considered circumstances that justify appellate intervention in Dartmouth (City) v. Police Assn. of Nova Scotia, Local 101, (Dartmouth Police Assn.) (1998), 172 N.S.R. (2d) 352, as follows: The scope of appellate intervention with respect to findings of fact at trial is well‑known and has often been repeated. To justify appellate intervention, there must be a "palpable or overriding error": Toneguzzo‑Norvell et al v. Savein and Burnaby Hospital, [1994] 1 S.C.R. 114 at 121. It is not every error that leads to appellate intervention. As Lamer C.J.C. said in Delgamuukw et al v. British Columbia et al, [1997] 3 S.C.R. 10110 at para 88: The error must be sufficiently serious that it was “overriding and determinative in the assessment of the balance of probabilities with respect to that factual issue”. 41) In Barrett v. Reynold (1998), 170 N.S.R. (2d) 201 (N.S.C.A.) Cromwell, J.A. stated at pp. 223-224: Appellate intervention may be warranted where the trial judge has misapprehended or overlooked material evidence. . . . Even where this has occurred, intervention is not automatic; the error must be sufficiently serious that it is “overriding and determinative” with respect to the factual issue under consideration . . . . . . This deferential approach applies to all factual findings, but is applied less strictly when the findings do not depend on the trial judge’s assessment of credibility . . . 42) The appellant submits that: . . . Justice Moir did make manifest errors; ignored conclusive evidence; and misunderstood the evidence on crucial issues. Further, Justice Moir relied on erroneous key findings of fact which he made to support other factual findings and conclusions he made throughout his decision, and which led to the dismissal of Founders’ actions. 43) The appellant lists some 30 alleged errors, a number of which are recurrences, in an appendix to its factum. It focuses on four that, if not sufficiently grave to warrant interference in themselves, assume determinative and overriding importance because of the emphasis and reliance the trial judge placed on them throughout his decision. The appellant alleges: (a) Moir J. held that the pro forma statements reviewed at the Cabinet Committee meeting on October 12, 1983, did not contain all information required to form the basis of the agreement asserted by Founders. (b) Moir J. inferred that a letter written by McCrea on October 20, 1983 demonstrated that the parties had not agreed on the size of the complex by that date. (c) Moir J. inferred that the October 4, 1984 letter from Mr. Lawrence contained a negotiated agreement between the parties, whereby the Province would lease 50,000 square feet of space in Founders Square for 5 years with an option to renew for five years. (d) Moir J. erroneously believed that the calculation of payments to be made on an amortized mortgage requires the payment to be readjusted as the principal declines and in reliance on this erroneous belief made incorrect findings of fact. 44) After carefully considering the evidence, the submissions of counsel and the decision of the trial judge, I am satisfied that the trial judge made the errors alleged by the appellant and that they are of an “overriding and determinative” importance that caused him to misconstrue the nature of the agreement between Mr. McCrea’s company and the province as a result of which the Founders Square project was developed. The trial judge’s finding that there was no contract was not a reasonable conclusion supported by the evidence. These errors require the intervention of this court in the result reached by the trial judge. The Pro Forma Statements 45) As mentioned above, Mr. McCrea met with Mr. Power, the deputy minister, and Mr. Hayward on October 12, 1983, to review pro forma statements that had been worked out to reflect the objectives of the province and Founders Square Limited. The province wanted Founders to construct an office complex that would contain approximately 200,000 rentable square feet, including the space in the historic buildings on the province’s property which were to be renovated and preserved in accordance with the Heritage Property Act. The province had been insistent on a rentable area of that size to maximize its income from the ground rent from Founders over an 80 year lease, which had been fixed at a minimum of $100,000 per year but could rise as a percentage of income. The space was larger than Mr. McCrea initially visualized and in his view this represented greater risk. He had determined that restoration of the old buildings would not be economic, and made it as a condition for proceeding that the province agree to lease 50,000 square feet to subsidize the extra expense of restoration and risk involved in the additional area. The pro forma statements made provisions based on the accommodation of the requirements of both sides. The earlier pro formas based on the smaller proposed project assumed interest at 10% and that rate was used to calculate an “economic rent” of $18.50 per square foot amortized over 30 years. All three understood that the economic rent in the actual leases would be calculated against the actual interest and term of the mortgage. Leases were to be renegotiated periodically to reflect fluctuations in mortgage rates. 46) After their own meeting to consider the proposals, Mr. McCrea, Mr. Power and Mr. Hayward met with the cabinet committee that had been struck to oversee the arrangement. 47) The obvious intention of both parties who met that day, Mr. McCrea representing Founders Square Limited and the cabinet committee representing the province, was to conclude an agreement. No witness who attended the meeting testified to any doubt as to the result: an agreement was reached. The cabinet committee and the developer, the only developer still interested in the project, negotiated a scheme for saving the heritage buildings as part of a larger office complex in return for a subsidy in the form of a long term rental. 48) I accept the appellant’s submission that a group of players as sophisticated as the premier of the province and selected ministers and officials on the one hand and an experienced developer on the other would have concluded from the pro forma statements under discussion that the following were the essential elements of the agreement, as listed in the appellant’s factum: a) Total net rentable area of 200,600 sq. ft.; b) Annual ground rent to Province of $100,000; c) Long-term pre-lease of 50,000 rentable square feet @ $18.50/sq.ft. per annum; d) Amortization of estimated development costs at 10% over a period of 30 years; e) Allowance for tenant improvements at $7.00/sq. ft.; f) Estimated development costs of $25,425,000; g) Mortgage of $21,000,000 at 10% interest amortized over 30 years. (The annual payment for long term debt is shown to be $2,173,900.00. Using blended payments tables the monthly payment for a $1,000 loan, amortized over 30 years at 10% is (8.6260). Converting to an annual payment for an amount of $21M, the payment is $2,173,900.00.) 49) I am satisfied that the terms contained in the pro forma statements became the terms of the contract between Her Majesty in Right of the Province of Nova Scotia and Founders Square Limited concluded on October 12, 1983, and that the trial judge erred in holding otherwise. The October 20, 1983 letter 50) After the meeting Mr. McCrea wrote to Mr. Power on October 20, 1983, enclosing the revised pro formas based on the “larger scheme” and advised the draft ground lease and development agreement were being sent that day under separate cover. He referred to his intention to seek a development agreement from the City of Halifax, which would depend on working drawings reflecting a final determination of the space available in the restored historic buildings. This letter was discussed in greater detail above. In my view the trial judge misapprehended its effect; it does not support the inference he drew from it that Mr. McCrea was still keeping his options open as to the overall size of the project, and that negotiations were continuing. This interpretation of the letter by the trial judge stood alone without supporting evidence, and appears to have been contrary to the understanding upon which both parties to the agreement proceeded. I find more plausible the appellant’s explanation that the reference to 140,000 to 185,000 square feet related to the new construction only because the amount of space available in the restored buildings would not be known precisely until more work was carried out to determine how much could be salvaged by the appellant. 51) Premier Buchanan appears to have been eager to announce the project, and did so at a press conference in the Red Room of Province House on October 31, 1983. Mr. McCrea and Mr. Power attended the press conference. The premier could not have done so had the October 20th letter had the effect the trial judge inferred it did. The press release stated in part: The entire development (including new and restored construction) will provide approximately 230,000 square feet [gross] of commercial/office/retail space. Approximately 190,000 square feet will be new, approximately 40,000 square feet will be restored. 52) Premier Buchanan was asked at the press conference if the province was contributing any funds to the development. He replied that the province was not making any capital contribution to the project but that it had agreed to a long-term lease of 50,000 square feet of space in the project. He testified at the trial that if the province had not made such a commitment he would not have announced it on October 31, 1983, and the project would not have been built. 53) There is no evidence of any further negotiations between Founders Square Limited and the cabinet committee after October, 1983. Indeed, there was nothing left to negotiate, save for the individual leases by which the province would make good its commitment to lease 50,000 square feet at an economic rent over a long term reflective of the amortization period of the Founders Square mortgage. 54) Mr. McCrea and Founders Square Limited went ahead and constructed the $25,000,000 project in accordance with the agreement reached in October, 1983. There was no evidence of any complaint on the part of the province that they had failed to carry out their part of the contract. It would have been desirable if the parties had been more attentive to documenting the agreement they reached. In particular, Mr. McCrea could have saved himself a good deal of grief if his letter to Mr. Power of October 20, 1983, had been more explicit. In his view, the revised pro forma statements which he enclosed, which the cabinet committee had accepted, said it all. The parties had achieved a meeting of the minds on all essential terms. At the invitation of the province, Founders Square Limited had made an offer to build the project the province wanted, but only on the condition that the province would provide the support of the long term lease. Members of the cabinet committee understood that if they did not accept that condition, the project would not proceed. They accepted, and announced their acceptance publicly. The consideration to flow from both sides was clearly stated. There was an intention on both sides to be bound. The October 4, 1984 Letter from Mr. Lawrence 55) This letter, discussed above, did not result from negotiation of terms of the contract between the province and Founders Square Limited after October 12, 1983. Rather it provided confirmation, for the particular purpose of satisfying the requirements of Mr. McCrea’s bank, of the agreement reached at that time. Mr. McCrea, who seems to have been in a degree of awe of Mr. Power as an official used to having his way, accepted his reasons for not including the 50,000 square foot commitment in the development agreement, a public document. This left him without a means of proving this term of his agreement to the bank. His company had already expended some $3,000,000 and the bank required documentation before advancing funds. Had it not been for this requirement, it appears to have been Mr. McCrea’s assumption that he would need nothing beyond the individual leases Mr. Power or his successors would provide from time to time until the province’s commitment had been fulfilled. While his attitude may seem casual given the stakes, Mr. McCrea was used to dealing with the province when large sums were involved. He had negotiated a fair contract in good faith, and he had no reason to doubt the good faith of the government. 56) It would not have been reasonable for the cabinet committee to have left negotiations involving essential terms involving public policy and the outlay of substantial public moneys to Mr. Power’s department. This is clear from the testimony of Premier Buchanan: Q. Would you get involved at all or be aware of any of the details of the negotiations for the various agreements? A. No. No. Q. Did you become involved? A. Not that I recall, no. The policy was there and it was up to the Department to - - as I said when we started, my philosophy of government is that the government makes policies and the civil service follows the policies. If we’re wrong, then next election will tell the tale. Well, next election came along and we won the biggest majority since the 1950s. . . . Q. Was long term ever defined at committee? A. Not that I can recall. It was definitely a long-term commitment for the lease of the 50,000 square feet. Q. And was it your understanding that the negotiations over the leases would then be left up to Don Power and his department to handle? A. Well, to Don, who was the deputy minister, and departmental people, yeah. That was the usual procedure that we followed back when I was Minister of Public Works in the late 60s. But acting on government policy always. Q. Did you give any instructions to Don Power or anyone at the Department of Government Services with respect to negotiating the government’s commitment to take space at Founders Square? A. No. No. I didn’t. They would know the commitment from the committee and also from the public announcements. 57) What was left to be negotiated were the terms of the individual leases after the project had been built and was ready for occupancy. But in the meantime Mr. McCrea was spending money and needed proof in the form of the letter from the Minister of Government Services. That letter appears to have been seen by Mr. Power, who drafted it, Mr. Lawrence, who signed it, and Mr. McCrea who tried unsuccessfully to get some of the language changed, simply for what it was, evidence of the government’s commitment to lease created as means for Mr. McCrea “to get his money.” Each of the three knew they were not renegotiating the long-term leasing commitment that had been made in October of 1983. The trial judge, however, saw the letter as evidence that negotiations between Mr. McCrea and the government were continuing a year after the agreement of October, 1983. The respondent has laid great stress upon it in an attempt to avoid commitment to a long-term lease, but the letter is of limited significance. Once the province had accepted the terms in the pro formas and announced the contract to the public, the terms were not subject to change and Mr. McCrea was justified in committing his company to the development of Founders Square. The letter of October 4, 1984, is simply what it purports to be, written evidence of an agreement reached a year earlier, created for the purpose of enabling the bank to release funds to Mr. McCrea. As such it is not a particularly probative document, and does not support a finding that negotiations were continuing as to fundamental conditions between Founders Square Limited and the province represented by Mr. Power a year after a contract was concluded by the province represented by the committee of cabinet headed by the premier. Amortization 58) After setting out the general background, the trial judge considered where matters stood in October, 1983, including a detailed discussion of his understanding of the pro forma statements in which he noted “a constant is stated for interest on long term debt in each of the six years.” He made the following statements in his decision: * ... It is Mr. McCrea’s belief that these pro forma statements contain the terms of the contract made by the province and Founders Square: 1) 50,000 square feet, 2) $18.50 triple net to be adjusted at each mortgage renewal, but only for changes in the rate of interest, and 3) long term, meaning the length of the mortgage amortization to be negotiated with a lender. I disagree with this conception. Quite apart from the difficulties of finding contractual terms in financial projections, the projections, of themselves, do not address all that would be necessary to find the terms alleged by Mr. McCrea, despite his assertion that they are contained “in absolute detail” among these documents. The extrapolation of a thirty year commitment is not possible. Mr. McCrea testified that the assumed period of mortgage amortization was reflected in these pro forma statements, and the document therefore reflected the period of his “demand” for a long term lease as being whatever mortgage amortization his company should negotiate. He is mistaken. Earlier financial projections did contain information from which an assumed amortization could be deduced, but the statements shown to Mr. Power and the cabinet committee in October 198, do not show any projected decline from year to year in interest on long term debt. Nothing can be deduced from these documents alone to indicate how long “long term” was to be. Further, the financial statements say nothing of rent adjustment which, according to Mr. McCrea’s conception, was essential to the contract he alleges. According to him, the rent of $18.50 was only good until the terms for repayment of mortgage debt matured. The contract he alleges would include a term by which the rent would be adjusted according to new interest rates after each maturity, which he anticipated would involve five year renewals. As an aside, I note that more detail would have to have been agreed or would have to be implied because the long term expressed by Mr. McCrea leaves unanswered questions that would have needed answering before the adjustment could be made, such as, whether the new rent was to be calculated on reduced principal, whether the development was free to negotiate alternate financing, and what portion of the $18.50 was to be adjusted. (Emphasis added.) 59) Elsewhere he made the following statements: * . . . Firstly, reductions in principal are not part of the calculation, although the theory advanced by Mr. McCrea and some of the witnesses from the cabinet of the day was that subsidization was to finance the three million dollars in capitalized expenses attributable to the restoration, and if this were the case, the subsidy portion of the rents ought to have reduced as principal was retired. * . . . I have commented at some length in the findings of fact about the difficulties with the alleged term respecting rent adjustments upon mortgage renewals. If the principal was, as some cabinet ministers thought it to be and as much of Mr. McCrea’s correspondence and minutes stated it to be, that the subsidization was to pay for the three million dollars in restoration costs, and, even if the principal was, as alleged by Founders, to retire that cost in 30,000 of the 50,000 square feet to be rented, the term ought to have provided for reductions as principal was paid down and not just for reductions or increases as interest fluctuated. * . . . The object was at least to subsidize the cost of renovations, which Mr. McCrea said was three million dollars. A portion of the $18.50 had been calculated to recover what was, in effect, a monthly loan payment on three million at ten percent interest over thirty years, assuming 30,000 square feet. I cannot perform an exact calculation, but it seems to me that the greater square footage and the failure to credit reductions in principal means that much, if not all, of the three million dollars has been recouped. (Emphasis added.) 60) The trial judge’s repeated references to taking “reduced principal” into account betray a misunderstanding of the principles of amortizing long term debt which recurs throughout his decision. The term and the instalment payments consisting of blended principal and interest remain constant, subject to periodic adjustments for fluctuations in interest rates. It is clear from the evidence that the parties, in particular Mr. McCrea and Mr. Power, were familiar with the concepts of long term financing and understood the implications of the undertaking demanded by Mr. McCrea as a condition for proceeding with the project. 61) The amortization issue was identified as one of the four “overriding and determinative” errors by the appellant. The respondent acknowledges the error: The respondent agrees the amortization issue was decided incorrectly by the trial judge. The respondent submits that regardless of the finding by Moir J. on the amortization issue, there was ample evidence to support the decision of Moir J. by the terms of which decision His Lordship dismissed the claim based on breach of contract and dismissed the claim based on negligent misrepresentation. 62) Unfortunately from the respondent’s point of view, the amortization error assumed an overriding importance to the trial judge’s reasoning. It was specifically referred to as one of the matters that remained to be negotiated after October, 1983. Because he considered the parties remained in negotiation, the trial judge concluded they had not then reached an agreement. This was of determinative importance to his conclusion there never was a contract. Because he could not readily reconcile Mr. McCrea’s testimony with the conclusions he had drawn about the absence of an agreement, the trial judge made findings adverse to Mr. McCrea’s credibility, as follows: . . . there are many examples of his (Mr. McCrea’s) having recalled events in a way that was rationalized to his theory of the case. One example was his assertion of absolute commitments to and by Founders Square given at the meeting with the cabinet committee, contradicted by his own letter shortly after the meeting, in which he makes it clear that Founders Square had made no commitment as to the size of the project. Another example was his insistence that the pro forma statements before the cabinet committee laid out the terms of the contract, contradicted by the statements themselves, which were premised on no amortization and which contain nothing respecting rent being adjusted according to interest rates negotiated whenever the mortgage came up for renewal. This propensity is evident for the present point in Mr. McCrea’s assertion that Mr. Zareski was projecting interest rates far into the future. That position, while it gives no credit to Mr. Zareski’s experience and intelligence, conveniently suits Mr. McCrea’s position that renewals were to be automatic and rent was to be calculated on renewal interest rates. 63) Even greater deference is normally accorded to findings of credibility than to other findings of fact by a trial judge, but when the credibility assessment rests upon obvious misapprehension of the facts it cannot be accepted. Fortunately little turns on credibility in this matter. Mr. McCrea’s evidence is important because of his close involvement, his habit of taking notes and his continuity of recall, but he is not contradicted to any significant extent and frequently corroborated by key witnesses on the government side. The issues relate less to what happened than to what it meant. The Findings of the Trial Judge 64) The Trial Judge after a further review of the evidence stated: Founders Square draws my attention to an event on Halloween 1983 towards findings that the province had bound itself finally to the terms alleged by Founders, or misrepresented to Founders that it would do so. On that day the Premier issued a press release and held a public ceremony to announce that Mr. McCrea’s company would be building Founders Square. It is reported that the Premier told the press no public money would be invested, but the province would assist through a long term commitment to lease space in the building. More telling is a less public communication. On October 20th, 1983, after the meeting with the cabinet committee and before the announcement, Mr. McCrea wrote to Mr. Power. He made reference to “the current draft of the Agreements”, and advised that Founders’ solicitor would forward them to Mr. Power. The letter stated, A final decision by Founders with respect to the final development size will have to be made prior to the working drawing stage and will fall within the bounds of approximately 140,000 to 180,000 square feet. Obviously, Mr. McCrea did not consider himself bound to provide 200,600 square feet of rentable space, the square footage under discussion at the time of the cabinet meeting and the square footage assumed by the financial projections. Obviously, Mr. McCrea did not then consider the discussions of October 11th (sic) to have been final. 65) As previously remarked, the trial judge placed considerable emphasis on this interpretation of the letter and referred to it frequently in his decision to support his conclusion that no agreement had been reached at the October, 1983 meeting with the cabinet committee. 66) The trial judge continued: I find that Founders Square and the province were still in negotiations through October of 1983. I accept that Mr. McCrea had in mind the province taking 30,000 to 50,000 square feet at $18.50 a foot base rent for as long as his mortgage amortization. However, I find that the terms he had in mind were not set out explicitly for the cabinet committee. Mr. McCrea spoke in generalities to the committee and he expects the pro forma statements to take on a contractual significance far greater than they could sustain in the discussions at that point. Mr. McCrea says his understanding of the purpose of the meeting was to make a final decision. That was not its purpose. The call for proposals set finality at the next stage, execution of a development agreement. Further, too much remained undecided and awaiting negotiation, as Mr. McCrea’s letter of October 20th clearly shows. I accept the evidence of Mr. Donahoe as to the purpose of the discussions, and his evidence, as well as that of Senator Buchanan, to the effect that the matter was referred to Mr. Power for further negotiations. The most a developer could reasonably take from the discussions and the announcement was the comfort of knowing that the government was prepared to continue negotiations toward contracts that would include a substantial subsidy through long term leases at secure rents involving as much as 50,000 square feet of rentable space. My findings of fact as to the dealings of the parties throughout October 1983 are, of course, based upon my assessment of the evidence as a whole, but prominent in that assessment are the terms of the call for proposals, which saw contracts being finalized at a later stage, the discussions, statements and correspondence of October 1983, including the public announcement at the end of that month, and the terms of leases and other contracts made in writing subsequently, which I shall refer to later. I should state my major findings as to the dealings of October 1983 as follows: 1. The parties were, and remained, in negotiation. 2. Specifically, at the time of the announcement of the project, the parties were still in negotiation. 3. For the province, the purpose of the discussions was to gather information and further negotiations, not to make final or binding commitments. 4. For Mr. McCrea, the purpose of the discussions was to further negotiations and not to make final or binding commitments. 5. One of Mr. McCrea’s objectives was to secure, for the course of future negotiations, a commitment that the government would negotiate terms by which the project could be partially subsidized through long term leases, and he received an indication the government would do so. 6. Although the government indicated it would accept terms for subsidization, the terms were not settled beyond the following generalities: the subsidization would cover at least the cost of restoration, it would be achieved through long term leases with the province as tenant, and it could relate to as much as 50,000 square feet. 7. It remained one of the province’s objectives for future negotiations that the rentable space in the complex should approach 200,000 square feet, but Mr. McCrea kept his options open for the time being as regards the intended size of the project. Executed contract was the place for final commitments. Unfortunately, Mr. McCrea did not see it that way. In cross-examination, he said the public announcement at the end of October 1983 was enough for him. He neither proposed nor required a record of the commitment he alleges. He embarked on a twenty-five million dollar project with nothing in writing as to terms he says were essential to success. 67) The first six of the “major findings” by the trial judge are not only without evidentiary support, but they are contrary to the evidence. Every witness who attended the October 12, 1983, meeting testified to an understanding that the Founders Square project was to proceed because the government had committed itself to the long term lease of 50,000 square feet that Mr. McCrea demanded if his company was to build it. The terms were not generalities; there is no evidence they were considered to be such by those who attended the meeting. The terms were clear in the pro formas, and there does not appear to have been any serious quarrel with them. They had been reviewed by Mr. Power and Mr. Hayward, who would have been alert for unreasonable costs, and they were discussed at the meeting. By that stage it was essentially a take it or leave it proposition with little room for negotiation. If the government did not accept the requirement for a long-term lease, Mr. McCrea would not proceed with construction. That would be politically unpalatable, given the public interest in the historic buildings. Against that background, it was not unreasonable for Mr. McCrea to consider the public announcement “enough for him.” All that remained to negotiate were the specific leases by which they province would fulfil its long term commitment to lease 50,000 square feet at an economic rent. 68) The seventh major finding was a restatement of the trial judge’s interpretation of the letter of October 20, 1983. 69) In his preamble to the findings the trial judge placed emphasis on the “terms of the call for proposals, which saw contracts being finalized at a later stage.” He failed to consider the effect upon that process of the formation of the cabinet committee, which circumvented the administrative steps set out in the proposal call. That shift in the kind of authority, which could be exercised over the project, led to a jocular remark by Premier Buchanan to Mr. Power after the public announcement in the Red Room. Mr. Power testified that the premier came to him and said “that he got it settled in two or three hours, and I played with it for eight or ten months and didn’t get it settled.” The Appellant’s Submission 70) The appellant submits that the facts proven by the evidence establish that the contract asserted by Mr. McCrea was concluded on October 12, 1983 and has remained in effect since that time: The role of the court in contract cases has been clearly defined. It is the role of the court to assist the parties in enforcing a contract that accords with their original intention. It is not the role of the court to apply a formalistic and technical analysis to defeat the intention of parties to contract. The role of the court in this context was explained by Lord Wright in Luxor Ltd. v. Cooper, [1941] A.C. 108 at p. 137: There have been several general statements by high authorities on the power of the Court to imply particular terms in contracts. It is agreed on all sides that the presumption is against the adding to contracts of terms which the parties have not expressed. The general presumption is that the parties have expressed every material term which they intended should govern their agreement, whether oral or in writing. But it is well recognized that there may be cases where obviously some term must be implied if the intention of the parties is not to be defeated, some term of which it can be predicated that “it goes without saying,” some term not expressed but necessary to give to the transaction such business efficacy as the parties must have intended. This does not mean that the Court can embark on a reconstruction of the agreement on equitable principles, or on a view of what the parties should, in the opinion of the Court, reasonably have contemplated. The implication must arise inevitably to give effect to the intention of the parties. These general observations do little more than warn judges that they have no right to make contracts for the parties. Their province is to interpret contracts. But language is imperfect and there may be, as it were, obvious interstices in what is expressed which have to be filled up. . . . 71) The respondent argued that further formal documentation was required to complete the contract, following the remark by the trial judge, considered above, as to the “terms of the call for proposals, which saw contracts being finalized at a later date.” The appellant, adding its own emphasis, cites the following passage by Cromwell, J.A., writing for this court, in Mitsui & Co. (Point Aconi) Ltd. v. Jones Power Co. et al., [2000] N.S.J. No. 257: At § 67: An agreement is not incomplete simply because it calls for some further agreement between the parties (H.G.Beale et al, Chitty on Contracts (28th ed. 1999) at 2-119) or because it provides for the execution of a further formal document (G.H.Treitel, The Law of Contract, supra at 51-2). The question is whether the further agreement or documentation is a condition of the bargain, or whether it is simply an indication of the manner in which the contract already made will be implemented. This is a matter of the proper construction of the agreement: see Calvan Consolidated Oil & Gas Co. Ltd. v. Manning, [1959] S.C.R. 253 at 261 citing with approval Von Hatzfeldt-Wildenberg v. Alexander, [1912] 1 Ch. 284 at 288-9; see also G.H.Trietel, supra, at 52. This exercise of interpretation must take account the document as a whole as well as of the ‘genesis and aim of the transaction’ of which it forms part: see, for example, Hillas & Co. Ltd. v. Arcos Ltd. (1932), 43 Lloyd’s L. Rep. 359 (H.L.) per Lord Wright at 368 and I.N. Duncan Wallace, Hudson’s Building and Engineering Contracts (11th ed. 1995) at 114. As noted earlier where, as here, the parties intended to be bound, the courts will tend to favour a construction that the agreement is not conditional. At § 76 and 81: . . . As noted where, as here, experienced business people intended to create a binding agreement, the court should not be astute to find essential terms lacking. Where parties reach agreement, courts are reluctant to find that it cannot be given meaning. From early times, the common law has accepted the principle that, where possible, words should be understood so as to give effect to the agreement rather than to destroy it. . . . 72) The appellant requests that this Court apply these principles (as Moir, J. should have done) to the facts of this case. The evidence is clear from all of the witnesses present. The parties intended to and did enter into a contract whereby the province agreed to lease 50,000 square feet of space on a long term basis in Founders Square. In exchange, Founders agreed to undertake a difficult and risk development project on the terms requested and required by the province. 73) I agree with the submissions of the appellant. Despite the deference owed to factual findings of a trial judge, four errors of overriding and determinative importance have been identified which led the trial judge to a wholly erroneous conclusion, that there was no contract between Founders Square Limited and the Province of Nova Scotia. The evidence for such a contract is overwhelming and uncontradicted. In particular, the long term leasing commitment asserted by the appellant, as a fundamental condition for proceeding with the Founders Square project, was accepted on October 12, 1983, by a committee of cabinet empowered at that time to exercise the executive authority and commit the resources of the Province of Nova Scotia. The agreement was announced and its key provisions explained to the public in a formal ceremony, held for that express purpose with pomp and elegance, in the Red Room of Province House. With those assurances the developer proceeded to perform its contractual duties and during the next three years built, on land owned by the province, the complex for which the province had bargained at a cost and risk to itself of some $25,000,000. The contract was with the Crown. It was not open to later governments or administrations to ignore its terms without subjecting the Crown to liability for breach of contract. 74) The province initially performed its duties pursuant to the contract in exact accordance with the terms agreed to on October 12, 1983. Individual leases were negotiated by the Department of Government Services and Founders Square to take 50,000 square feet for five years and 11 years at the economic rent and with the allowance for leasehold improvements contemplated by the pro forma statements and agreed to in 1983. The terms of the leases were for periods shorter than the 30 year amortization period of the financing because the economic rent was based on interest rates, and was subject to adjustment as rates fluctuated. The mortgage financing for a 30 year amortization period also assumed repeating terms of five years to reflect changing interest rates. Had the actual amortization period proven to have been less than the period of 30 years assumed in the pro forma statements, there can be no doubt that Mr. Power or his successors would have adjusted the total terms of the leases to reflect this. 75) By the expiration of the term of the first five year lease in 1991 the guard had changed at Province House. There was a new premier expressing an intent to break leases with developers, a scheme to be implemented by new ministers and new officials. But the obligation to lease 50,000 square feet of space in Founders Square, incurred on October 12, 1983, was ongoing. The Crown remained bound, and the law imposes consequences for breach of contract. But spotty departmental records did not support Mr. McCrea’s claim. It was necessary for him to go to court to prove it. 76) For the reasons stated above the primary issue in this appeal, whether there was a contract between the Province of Nova Scotia and Founders Square Limited, which included a commitment by the province to a long-term lease of 50,000 square feet of space, must be resolved in favour of the appellant. The lease commitment was a fundamental term of the contract, which resulted in the building of the Founders Square complex, and without which it would not have been built. There is no need to consider the alternative argument of the appellant that the leasing commitment should be considered as a collateral contract. Negligent Misrepresentation 77) The appellant claimed concurrently in tort for all damages suffered by Founders as a result of Founders’ reliance on the province’s representations that it would lease space on a long-term basis. I find the two claims to be mutually exclusive, although the two arguments can be made in the alternative. 78) Contrary to the finding of the trial judge, the statement was made to Mr. McCrea at the October 12, 1983 meeting with the cabinet, and he relied on it, that if his company would build the Founders Square project, the province would lease 50,000 square feet of space in it at an economic rent for the long term. However that statement was not made negligently. It was made in good faith, with the intention that it be acted on as a term of an enforceable contract. 79) The appellant cites Queen v. Cognos Inc. (1993), 99 D.L.R. (4th) 626 (S.C.C.) for Iacobucci, J.’s summary of the elements of the tort of negligent misrepresentation, which it stated as follows: a) there must be a duty of care based on a “special relationship”; b) the representation in question must be untrue, inaccurate or misleading; c) the representor must have acted negligently in making the misrepresentation; d) the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and, e) the reliance must have been detrimental to the representee in the sense that damages resulted. 80) In light of my finding for the appellant in contract, I am unable to find that elements (b) and (c) have been satisfied. In the particular circumstances of this case, I would dismiss this alternative claim in tort. The Position of the Respondent 81) The respondent’s counsel has ably defended the judgment at trial on the grounds of appellate restraint, that is, the deference owed to findings of fact by the trial judge, and on want of authority by the cabinet committee to bind the province for lack of an order in council. I have dealt with both of these issues above. 82) The respondent has also argued the Statute of Frauds, R.S.N.S. 1967, c. 290, (as amended), submitting that the commitment to lease for 30 years must be in writing. 83) In Carvery et al. v. Fletcher et al. (1987), 34 D.L.R. 739 (S.C.T.D.) Hallett, J. stated at pp. 741-743: The Plaintiffs rely on the doctrine of part performance to support an oral agreement for the sale and purchase of the Gerrish St. property. The so-called doctrine of part performance was developed by the courts of equity following the passage of the Statute of Frauds in 1677. The courts quickly realized that the statute was a shield for persons who had orally agreed to sell lands but wished to resile from their agreement. As a result, the courts of equity invented the doctrine of part performance to make possible the enforcement of such oral contracts, the theory being that if a person went into possession and made improvements to property or did other acts, it could be evidence that would lead to the conclusion that there was the oral agreement alleged. The courts quickly realized that the doctrine of part performance too had to have some limits. The doctrine and its scope is described in DiCastri’s The Law of Vendor and Purchaser, 2nd ed. (1976), para 136: . . . in order to exclude the operation of the Statute of Frauds, the part performance relied upon by the plaintiff must: (1) be unequivocally referable to the contract asserted, which must be one, if properly evidenced by a writing, would be specifically enforceable; (2) demonstrably, unmistakenly and exclusively point to this contract as affecting the ownership or the tenure of the land in question; and (3) be such that, to deny its recognition would be to permit the statute to be made an instrument of fraud by permitting the defendant to escape from the equities with which the acts of part performance have charged him. The doctrine is an invention of the Court of Chancery to ensure equity being done where the defendant has stood by and allowed the plaintiff, to his detriment, to fulfil his part of the oral contract, and where it would be unconscionable for the defendant to set up the statute by asserting that the contract is unenforceable so that he might retain benefits which have accrued to him from that contract. It would appear that the law has been somewhat relaxed by the Saskatchewan Court of Appeal in Lensen v. Lensen (1984), 14 D.L.R. (4th) 611, [1984] 6 W.W.R. 673, 35 Sask R. 48. It is no longer necessary that the acts of part performance be unequivocally referable to the contract asserted; the acts need only be indicative of and referable to “some contract dealing with the land.” 84) I find no merit in this argument on behalf of the respondent. Having brought the $25,000.000 Founders Square complex into being on the strength of a commitment for long term leasing, it would be unconscionable for the province to seek to get out of it for want of a paper bearing an appropriate signature when there were countless acts consistent with part performance by both sides, including the various steps in the proposal call process, the meetings and negotiations involving the pro forma statements, the actual construction of the complex in a manner satisfactory not only to the province and to the city, but to its critics in the ranks of the heritage activists, and the actual leasing by the province of 50,000 square feet at the stipulated economic rent for respective terms of five and 11 years. The Exclusionary Clause 85) Similar considerations apply to another argument by the respondent who relies, as the trial judge did in part, on a provision in clauses 16.01 and 1.01a in the development agreement that that document and the ground lease “constitute the entire agreement between Founders and Nova Scotia and neither party is bound by any representation, warranties, promises, agreements or inducements not embodied herein. . . .” Mr. McCrea sought to have the leasing commitment included and was refused by Mr. Power, not because the commitment was not a term of the agreement, but because it was government, or Mr. Power’s, policy not to include information deemed to be private or confidential in public documents. Departmental Leases contained such information, but they were not documents made available to the public. All witnesses, who attended the meetings of Mr. McCrea with the cabinet committee, were in agreement that the commitment was a fundamental condition of the contract: without it, Founders Square would not have been built. The appellant submits it would be unconscionable to hold this term of the contract to be unenforceable because the development agreement did not make reference to it. A detailed analysis of the development agreement, in the context of the terms negotiated as steps in the proposal call procedure, might result in the conclusion that the commitment was implied sufficiently to be incorporated by reference within the general concept of the development agreement. However in all of the circumstances, including the considerations referred to with respect to the Statute of Frauds, I find it sufficient to agree with the appellant that it would be unconscionable to find the contract is not enforceable for that reason. The Interlocutory Appeal 86) The appellant by a separate interlocutory appeal, heard with the main appeal, contested the preliminary ruling by the trial judge that Rule 31.03.(3) of the Rules of Civil Procedure did not apply to former cabinet members. The rule provides: 31.03.(3) A party may call an adverse party or an officer, director, or managing agent of a public or private body corporate or of a partnership or association that is an adverse party, and interrogate him by leading questions and contradict and impeach him in all respects as if he had been called by the adverse party, and the witness thus called may be contradicted and impeached by or on behalf of the adverse party also, but may be cross-examined by the adverse party only upon the subject matter of the examination in chief. 87) Moir, J. found that the Rule applied to cabinet ministers as officers of the Crown, a corporation sole, but not to former cabinet ministers. 88) A similar rule was held to apply to former company directors in Société Générale du Commerce et de l’industrie en France v. Johann Maria Farina & Co. , [1904] 1 K.B. 794. In Granitile Inc. v. Canada, [1998] O.J. No. 5028 Molloy, J. applied the equivalent Ontario Rule, 53.07 in the case of a former federal cabinet minister. However that case focused on whether the rule applied to a member of parliament or cabinet minister. It was found to do so, but the fact that the witness in question no longer was a cabinet minister was not considered. 89) The appellant sought to cross-examine Premier Buchanan and other members of the cabinet committee, and claims to have suffered detriment by not having been permitted to do so. 90) Section 9 of the Interpretation Act, R.S.N.S. 1989, c. 235, provides: 9(1) The law shall be considered as always speaking and, whenever any matter or thing is expressed in the present tense, it shall be applied to the circumstances as they arise, so that effect may be given to each enactment, and every part thereof, according to its spirit, true intent, and meaning. 91) The question raised is a nice one, but it is now moot because of the result of the appeal on the merits. It is not clear there is enough material before the court by way of evidence and precedent to make the kind of inquiry envisioned by the Interpretation Act. Even if there were, I am reluctant to decide a matter of such potential precedent value except in relation to live issues. As it is unnecessary to deal with moot issues, I will leave this question for another day. The Remedy 92) The appellant acknowledges that the Proceedings against the Crown Act, R.S.N.S. 1989, c. 360, s. 16(2), prohibits orders of specific performance against the Crown, but in lieu thereof permits “an order declaratory of the rights of the parties.” 93) The “Order Sought” in its factum requests that Moir, J.’s decision of February 28, 2000 and his ruling of March 9, 2000 be reversed with costs to Founders throughout and that this court make a declaration with respect to the long term lease commitment or, in the alternative, damages or a new trial. The trial judge did not make a hypothetical assessment of damages, stating: This is not a case in which such could be helpful on appeal if I erred in my conclusions as to liability, which turn so much upon my assessment of the facts. 94) As I understood the appellant’s argument at the hearing, a declaration that the contract is enforceable should enable the parties to work out a just result. However a resort to damages was sought as a further safeguard if it developed that the passage of time and the complexities of the rental arrangements had made it difficult or impossible to obtain an adequate remedy from the declaration alone. 95) I would allow the appeal and set aside the judgments on the merits. The trial judge fixed costs at trial at $60,000 less a $10,000 adjustment resulting from a payment of some $180,000 by the respondent to the appellant resulting from failure to pay rents as of an agreed starting date. The respondent cross-appealed the costs judgment, arguing for costs determined by the tariffs. It was a proper exercise of the trial judge’s discretion to fix costs, and I would dismiss the respondent’s cross-appeal, leaving the sum of $60,000, without the $10,000 adjustment, as costs due to the appellant at trial, plus disbursements. The costs on this appeal shall be 40 per cent of the costs at trial, plus disbursements. 96) I would declare that the respondent is and has been since December 1, 1986, obliged pursuant to its contract with the appellant concluded on October 12, 1983, to lease not less than 50,000 square feet of rentable space in the complex known as Founders Square at an economic rent of $18.50 per square foot calculated at an assumed interest rate of 10 per cent, such economic rent to be adjusted periodically to reflect the true interest rate on the mortgage by which Founders Square Limited financed the construction of the Founders Square project during the life of such mortgage, such period not to exceed 30 years. 97) Finally, I would remit the matter to the Supreme Court of Nova Scotia for an assessment of damages or other remedies as may appear necessary in the interests of justice. Freeman, J.A. Concurred in: Roscoe, J.A. Flinn, J.A.