Canadian Natural Resources Limited v. Wood Buffalo (Regional Municipality), 2011 ABQB 220

Court of Queen ’ s Bench of Alberta Citation: Canadian Natural Resources Limited v. Wood Buffalo (Regional Municipality), 2011 ABQB 220 Date: 20010401 Docket: 1113 00044 Registry: Ft. McMurray Between: Canadian Natural Resources Limited Applicant - and - The Regional Municipality of Wood Buffalo, the Regional Municipality of Wood Buffalo Composite Assessment Review Board and the Minister of Justice, Attorney General for Alberta Respondents _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice S.L.

Martin _______________________________________________________ 1. Introduction [ 1 ] The applicant Canadian Natural Resources Limited (CNRL) disputes the Respondent Municipality’s amended assessment of its business equipment and machinery for tax purposes. CNRL has appealed that assessment to the administrative tribunal charged with determining whether a change in the assessment is warranted. A three week hearing is scheduled to deal with the merits of that appeal starting May 3, 2011. The tribunal has rendered four preliminary decisions.

CNRL has challenged two such decisions by way of originating notice. [ 2 ] In the case at bar CNRL applies for an order in the nature of an application for a stay of proceedings. CNRL asks to be permitted to impugn these two preliminary decisions in the courts without first having the tribunal hear the challenge to the amended

assessment on its merits at the scheduled hearing. CNRL argues that this is one of those rare and exceptional circumstances in which interim relief should be granted before the tribunal has completed its designated task. 2. Process and Procedure [ 3 ] This matter concerns property, being machinery and equipment, involved in a new oil sands development within the judicial district of Fort McMurray. This matter was, by order of the Associate Chief Justice, set down for a half day hearing in Calgary on Friday, March 25, 2011 and was assigned as an afternoon special. There is some urgency to the stay application. 3.

The Statutory Framework, Facts and the Challenge to CARB’s Preliminary Decisions [ 4 ] The basic facts are agreed. The Board filed a helpful chronology of events which is attached as Exhibit A to this judgment. [ 5 ] There is also agreement concerning the basic framework under which tax is paid on property and equipment. The municipality assesses the value of the property; the taxpayer pays based on the assessment; and any complaints about that assessment are heard by an administrative tribunal specially constituted for that purpose.

As this property was machinery and equipment, the appropriate administrative tribunal was the Composite Assessment Review Board (CARB), established pursuant to the Municipal Government Act , R.S.A. 2000, C. M-26 and the Assessment Review Boards Bylaw No. 10/003 passed by the Regional Municipality of Wood Buffalo. [ 6 ] In 2009, Bill 23, the Municipal Government Amendment Act , 2009, was introduced. It came into effect January 1, 2010.

The changes introduced sought to improve the assessment complaint and appeals processes with the key objective being to have a well- managed, fair and efficient assessment and property tax systems in which taxpayers have confidence. Under the legislative scheme, CARBs have three members, two appointed by the municipality.

The third member, who is appointed by the province, serves as the chair. [ 7 ] CARBs are also governed by the provisions of the Matters Relating to Assessment Complaints Regulation , Alberta Regulation 310/2009 and the Matters Relating to Assessment and Tax Regulation , Alberta Regulation 220/2004. [ 8 ]

Section 464 of the MGA provides that CARBS control their own procedure and are not bound by the rules of evidence. The jurisdiction of the CARB is found at

section 467: only it can decide to change or not to change the assessment roll. [ 9 ] The Municipality issued the first property assessment on March 1, 2010 in the amount of $2,413,340,490. Five days later, it issued a second, amended property assessment on March 5, 2010 which increased the assessment to $3,222,5000,860. CNRL had no prior notice that an amended assessment was forthcoming. [ 10 ] The original assessment was based on CNRL’s “cost rendition”, a complex document created over a five-year period tracking what CNRL says are the assessable costs for this new project.

CNRL worked with the Municipal tax assessors extensively in that five- year period and provided extensive information over the course of approximately 13 meetings. [ 11 ] By correspondence dated March 5 and March 12, 2010 CNRL asked the Municipality to provide the details supporting the amended assessment. They expressly made request under ss. 299 and 300 of the M.G.A. [ 12 ] The Municipality replied by a one-page email on March 22, 2010.

Essentially, the increase was based on an estimate of the ratio to capital expenditures to assessable costs developed for tax planning purposes. [ 13 ] As required, CNRL paid the amount called for under the amended assessment, which CNRL says amounts to a $15 million overpayment. [ 14 ] On April 4, 2010 CNRL filed a complaint challenging the amended assessment before the CARB.

[15] There have been preliminary hearings and to date the CARB has rendered four preliminary decisions, dealing with variousmatters. Of primary significance to this application are the findings concerning the legality of the amended assessment, whether CNRLcan argue about the equity of the amended assessment, and its request for information under

section 299 and 300 of the MGA. [16] CNRL has filed originating motions challenging two of these decisions: being Board Order CARB 007/2010-P issuedOctober 7, 2010 and Board Order CARB 027/2010-P issued January 4, 2011.

CNRL raises numerous objections concerning the twoimpugned decisions, among them being: · that the CARB does not have jurisdiction to simply rule that the amended assessment is a nullity but rather must require an extremelycomplex and lengthy line by line review of the assessment · that the CARB lacks jurisdiction or otherwise is not prepared to hear any evidence on questions of equity; · that each party has the onus to prove the assessed value that it is seeking; · that despite the fact that the Municipality failed to disclose details of the amended assessment pursuant to a request under the newregulations, the Municipality is entitled to present evidence of those details at the hearing and to require further assessment informationfrom CNRL throughout the hearing process. [17] The CARB hearing on the merits of the complaint is scheduled to begin May 2, 2011 and to last three weeks. 4.

Evidence [18] The evidence on the stay application included the affidavit of Mr. Kerry Minter and the return, which currently runs over6000 pages. [19] The Municipality argues in its brief that Mr. Minter’s affidavit is not admissible in its entirety as it improperly seeks tosupplement or supplant the return in a judicial review application. Counsel softened that position in oral argument and only challengedcertain parts of the affidavit. [20] The cases cited to by the Municipality are distinguishable; including McClary v. Geophysical Services Inc. [2011] A.J. 198,TNL Industrial Contractors Ltd. v.

International Brotherhood of Electrical Workers, Local Union 424 1998 ABQB 241 , [1998]A.J. No. 449, United Food and Commercial Workers’ Union, Local 401 v. Westfair Foods Ltd. [2010] A.J. 386, B.G. v. Alberta(Director of Assured Income for the Severely Handicapped) [2004] a.J. No. 258, Czerwinski v. Mulaner [2007] A.J. No. 1005. Unlikethose cases, Mr. Minter’s affidavit is not directed solely towards the record, the reasons for decision or the merits of the decision. Insteadthe thrust of Mr. Minter’s testimony addresses the issue of whether CNRL would suffer irreparable harm if the requested stay is notgranted.

An applicant for a stay of proceedings is required to establish that it will actually suffer irreparable harm on the basis ofevidence that is clear and not speculative. As the failure to submit evidence of irreparable harm may prove fatal to a stay application, theaffidavit of Mr. Minter is necessary, relevant and admissible. Certain exhibits to the affidavit also form part of the return. Commentsmade about the CARB decisions and other matters outside the scope of his knowledge attract little or no probative value. 5.

The Law Concerning Stays of Proceedings and Premature Appeals [21] The stay sought by CNRL is a discretionary remedy measured against the three part test established by the Supreme Court ofCanada in RJR-MacDonald Inc. v. Canada (Attorney General) (SCC), [1994] 1 S.C.R. 311. The applicant mustestablish that there is a serious issue to be tried on the merits; the applicant would suffer irreparable harm if the application were refused;and the balance of convenience favours granting the stay.

The three parts of the test are interrelated, but the overarching consideration iswhether the interests of justice call for a stay, see Longley v. Canada (Attorney General 2007 ONCA 149 , [2007] O.J. No. 929.at paras 14-15. [22] In this application CNRL asks to go directly to court to impugn two of the tribunal’s preliminary rulings without first having

the hearing before the CARB on the merits of the amended assessment. Such a request involves resort to the courts before theadministrative tribunal has reached a final decision. The law on premature adjudication is relevant to this application and structures andinforms the overall analysis. It is therefore appropriate to canvass the authorities on prematurity at the outset. [23] The relevant statute allows a statutory right if appeal on a point of law or question of jurisdiction.

The MGA provides in s.470(1) that: an appeal lies to the Court of Queens Bench on a question of law or jurisdiction with respect to a decision of an assessment review board. [24] However, the Act is silent as to when that right of appeal arises: whether after any decision is made, including any preliminarydecision, or only after the CARB has completed its deliberations and rendered a final decision. The Act is also silent on whether judicialreview may be taken in addition to, or in lieu of the express statutory right of appeal. [25] It is not necessary to decide these issues in the application at bar.

However, the basic principles of prematurity direct that, ingeneral, and across a variety of contexts, leave to appeal should not be granted respecting interlocutory decisions. Normally courts willnot hear appeals from preliminary rulings given partway through a hearing, except in rare and exceptional circumstances. Similarly,judicial review of interlocutory decisions of administrative tribunals should only be undertaken in exceptional circumstances. As statedby the Alberta Court of Appeal in Encanca Corporation v.

Alberta (Energy & Utilities Board), 2004 CarswellAlta 1145 at para. 25: appeals of interim decisions, particularly where the appeal will not resolve any final or significant issues, are generally to be discouraged.In addition to delay, there are many pragmatic reasons not to hear such appeals including added cost, waste of judicial resources and theneed to discourage other premature applications. [26] The Alberta courts have adopted a strong policy against litigation in installments.

Troublesome aspects to interlocutoryapplications include the likelihood that such intervention will lead to fragmentation and bifurcation; delay and uncertainty may beintroduced into the proceedings by recourse to the courts before the tribunal has had the opportunity to complete its mandate; there arepossible issues of res judicata and abuse of process; and there is a risk of failing to accord appropriate deference to the administrativedecision maker by short circuiting the statutory division of labour between the tribunal as a first instance decision maker and the court asan appellate review body.

Interlocutory appeals may also provide little background on which to assess the effect of the decision on theproceedings taken as a whole.

A more basic concern is that such litigation may become unnecessary in light of the tribunal’s ultimatedecision in the matter. [27] Special circumstances in which a stay may be appropriate include instances where it would be unfair to refuse to intervenewhen the underlying decision denies a party the benefit of a fair hearing, discloses grounds for an apprehension of bias, or could affect aparty’s substantive rights. [28] The fact that an preliminary decision may relate to the tribunal’s jurisdiction does not automatically justify immediate judicialreview.

In Greater Moncton International of Airport Authority and Public Service Alliance of Canada 2008 FCA 68 , [2008]F.C.J. No. 312, the court said that the tribunal’s work should not be prohibited unless the lack of jurisdiction is “clear and beyonddoubt.” [29] The Municipality acknowledged in argument that a stay would be appropriate in a case in which there was a clearjurisdictional error that undermined the fairness of the process. Using that standard should a stay be granted in the circumstances? 6. Should a Stay Be Granted in the Circumstances? A.

Positions of the Parties [30] In essence CNRL argues that unless the matters addressed in its originating motions are addressed by a court, it cannot obtain

a full, fair and proper merits hearing before the CARB. Some grounds in the originating notice addressed the threshold issue of the legality of the amended assessment; others relate to what arguments can be made and the evidence which may be admitted and used at the merits hearing. CNRL points out that this is likely the largest and most complex assessment case ever litigated in Alberta, it is the first significant case under the new assessment review regime, and fundamental questions of fairness and jurisdiction are at issue.

In its view CNRL would be “ required to undertake the enormous effort of justifying its rendition, which was carefully prepared over a five- year period in cooperation with the municipality’s assessor, simply because, at the last minute, the municipality decided to increase the assessment arbitrarily and not in accordance with the legislation.” It says the ruling on the inability to argue or tender evidence on the issue of equity is such that the entire proceeding will be tainted and a new hearing would be required.

CNRL argues that it is appropriate for the court to intervene at an early stage to assist the parties in determining the correct rules for a full, fair, and proper hearing. CNRL claims it will suffer irreparable harm and that the balance of convenience favours “doing it once and doing it right.” [ 31 ] The CARB took no position on the stay application but requested guidance on certain issues should a stay be granted. Counsel for the CARB noted that the board has not made any determinations on the merits of CNRL’s appeal.

It states that all four of the hearings to date have dealt with preliminary matters, including the scope of its jurisdiction and the admissibility of evidence. [ 32 ] The Municipality submits that the application for judicial review or leave to appeal is premature and ought not to be entertained, especially considering that there is much evidence which has not yet been heard by the CARB.

The Municipality says the original assessment contained errors which were corrected by the amended assessment, citing witness reports that explained that CNRL’s cost renditions contained mathematical errors, omitted important information and excluded costs contrary to the legislation. The Municipality argues that equity is not a consideration in relation to the assessment of machinery and equipment under s. 467 (4) of the Act.

The Municipality argues that while the disputed decisions contain jurisdictional elements, there are no exceptional circumstances justifying immediate resort to the courts, nor are the alleged errors clear and beyond doubt. The Municipality argues that there is no irreparable harm and the balance of convenience favours allowing the tribunal to finish its work. B. The Three Part Test i. Are There Serious Issues to be Tried? [ 33 ] According to the Supreme Court in RJR the threshold for determining whether a serious issue exists is a low one.

The Municipality concedes there are serious issues to be tried, but does not outline which of the many issues CNRL raised so qualify. They accept that CNRL’s challenges are not frivolous and vexatious but argue that a court should not intervene before the CARB has rendered its final decision. [ 34 ] In RJR the Court said the judge is to make a preliminary and limited review of the merits of the case at this stage of the inquiry. However, case law about the appropriateness of interlocutory intervention during administrative proceedings calls for the somewhat different standard of clear and beyond doubt.

It is therefore important to address some of the issues raised by CNRL to assess whether it can meet what the Municipality says is the test for granting a stay before the complaint is heard on the merits. [ 35 ] CNRL challenges the legality of the amended assessment on many grounds; arguing it is a nullity. CNRL says it has evidence that the industrial assessor acknowledged that the amended assessment was not prepared in accordance with the regulations.

Rather, CNRL suggests that the amended assessment was issued because the Municipality felt the original assessment was too low and then simply increased it based on a rule of thumb calculation derived from the ratio of assessable costs to actual construction cost for other oil sands operations. At the December hearing, it asked the CARB to hear arguments and make a declaration that the amended assessment was a nullity. The CARB determined it would address the legality or status of the amended assessment when it hears the merits of the appeal.

The tribunal acknowledged that while it had the jurisdiction to determine the legality of the amended assessment, it did not accept that it was bound to reinstate the original assessment if the amended assessment was found wanting. The tribunal was of the view that it would be required to determine the appropriate amount for the amended assessment at the hearing. Nevertheless CNRL argues that if the amended assessment is faulty, the original assessment will be the only operative assessment.

A finding in favour of CNRL on this point by the court is potentially dispositive, and may obviate the need for a merits hearing before the CARB at all. However, this is a matter on which the Board has decided to exercise jurisdiction and as such would not be sufficient alone to ground interlocutory relief. [ 36 ] CNRL also raises an argument about the equity of the amended assessment. Equity refers to the fairness of the amended assessment and includes the notion that fair taxation calls for the comparable treatment of like property.

CNRL argues that equity between taxpayers is a fundamental component of Alberta and Canada’s property tax regime, both under the legislation and pursuant to

the case law. It is based on two fundamental principles. First, the property is to be assessed on a common basis so that the cost ofmunicipal governments will be fairly borne by taxpayers in proportion to the relative values of their assessable properties. Second, thatthe assessor is obligated to determine value in a manner that is fair and equitable with the level of the value prescribed by legislation. SeeBoardwalk Reit LLP v. Edmonton (City), [2008] A. J. No. 635 (C.A.); Royal Montréal Golf Club v.

Dorval, (QC CS),[1946] 1 D.L.R. 50. [37] CNRL’s challenge on the question of equity also dovetails with its concerns over the absence of disclosure of the approachtaken to equipment and machinery in comparable facilities. On March 18, 2010 CNRL wrote the CARB requesting information undersection 299 and 300. On April 2, 2010 it filed its complaint.

At the December hearing CNRL sought an order compelling production ofinformation with respect to the assessment of comparable facilities in the municipality. [38] Before this Court the Municipality argued that equity was not a relevant consideration in the assessment of equipment andmachinery: arguing that this category of property was subject to a statutory formula that did not include a consideration of like treatment.CNRL responded to that suggestion by pointing to

section 293 , which it argues makes equity a mandatory consideration for all types ofproperty: 293

(1) In preparing an assessment, the assessor must, in a fair and equitable manner, (

a) apply the valuations standard set out in the regulations, and (

b) follow the procedures set out in the regulations. (2) if there are no procedures set out in the regulations for preparing assessments, the assessor must take into account assessments ofsimilar property in the same municipality in which the property that is being assessed is located. [39] CNRL says its approach is supported by s. 467(3) and the Municipality says s.467(4) is the governing subsection: 467 (3) an assessment review Board must not alter any assessment that is fair and equitable, taking into consideration (

a) valuation and other standards set out in the regulations, (

b) the procedures set out in the regulations, and (

c) the assessments of similar property or businesses in the same municipality. (4) assessment review board must not alter any assessment of farmland, machinery and equipment or real world property that is beenprepared correctly in accordance with the regulations. [40] CNRL also cites a ruling on the previous municipal taxing powers by Fraser J, as she then was, in Strathcona No. 20 (County) v. Assessment Appeal Board 1995 ABCA 165 , [1995 A.J.

No. 369 at para. 8: So the Act, read in light of the general law, requires, except where otherwise clearly stated, that assessments be both at ‘actual value’ andalso equitable as between taxpayers. [41] In addition, s. 300 permits taxpayers to apply for the disclosure of information of other tax assessments so that an argument inequity may have a factual foundation. [42] The CARB addressed its mind to whether equity is a consideration for machinery and equipment only in a limited way inBoard Order CARB 007/2010.

It held that even if the amended assessment amounted to a nullity, the CARB was nevertheless required todetermine the “correct, fair and equitable assessment.” Further it stated at p. 9 of the decision: The question for the CARB is whether a previous assessment be assumed to be valid, correct, fair and equitable, or whether the CARBmust hear evidence to determine what is correct, fair and equitable?

[ 43 ] However, in Board Order CARB 027/2010-P the CARB concluded that “pursuant to section 9 (1) of the Matters Relating to Assessment Complaints Regulation the CARB lacks the jurisdiction to hear or grant relief in relation to the issue of equity as it is a new matter.” [ 44 ] It is true that s. 9(1) of the Matters Relating to Assessment Complaints Regulation says the CARB: “must not hear any matter in support of an issue that is not identified on the complaint form.” What is at issue is the CARB’s

interpretation and characterization of the nature and scope of the complaints raised by CNRL on the Assessment Review Board complaint and whether equity was a new matter or new issue.

While CNRL spoke to the issue of the equity between and among tax payers and the amended assessment in its letter of November 1, 2010 and in written submission before the CARB marked as exhibit C 41 paragraphs 40 to 44, the focus under the relevant regulation and the CARB decision was the content of the complaint form. [ 45 ] The complaint form is a Government of Alberta standard form document which asks the complainant to provide certain required information: sometimes by checking one of the boxes provided and sometimes by way of narrative. [ 46 ]

Section 4 of the Assessment Review Board Complaint form addresses complaint information and requires the complainant to: “ check the matter(

s) that apply to the complaint .” There are 10 boxes that may be checked. Ten categories are outlined on the back of the form in a

section called “Matters for a Complaint.” It reads: A complaint the assessment review Board may be about any of the following matters shown on an assessment notice or on attacks notice (other than a property tax notice) 1. the description of the property or business 2. the name or mailing address of an assessed person or taxpayer 3. an assessment amount 4. an assessment class 5. an assessment sub-class. 6. the type of property 7. the type of improvement 8. school support 9. whether the property or business is assessable 10. whether the property or business is exempt from taxation [ 47 ] CNR checked boxes three, four, and nine. Such “matters” apply to the complaint. [ 48 ]

Section 5 calls for further information on the “Reasons for Complaint.” Under this heading it says: “Note: an assessment review board must not hear any matter in support of an issue that is not identified on the complaint form.” [ 49 ] CNRL attached a separate

schedule outlining three separate issues, some of which had sub issues with a list of alleged problems. “Equity” was not set out under its own separate or distinct heading but many of the arguments identified as “Issues” were stated in broad terms.

For example, CNRL questioned whether the amended assessment was based upon any factual circumstances that can be supported by the assessor; whether the amended assessment was illegal; whether the amended assessment was beyond the jurisdiction of the assessor; and whether the amended assessment was driven by a tax motivation or bad faith or an abuse of process? [ 50 ] Under one of these issues CNRL references “equity” explicitly.

After it outlined other perceived deficiencies in the Municipality’s approach, it stated that: the amended assessment introduces non-assessable costs and non-assessable property into the assessment contrary to and inequitable with, established cost reporting for industrial facilities. To CNRL’s knowledge, the Assessor has not used this rule of thumb method to

adjust the assessments of any other industrial facilities. [ 51 ] The CARB held that equity was not raised in the complaint form such that it did not have the jurisdiction to hear or deal with it. A reviewing court would be required to determine the correctness or reasonableness of such a finding. [ 52 ] CNRL argues that the CARB’s approach is overly technical and involves a tenuous reading of the relevant regulation.

Case law supports the proposition that the underlying purpose of complaint or originating documents is to give sufficient notice so that the responding party is not taken by surprise and understands the nature of the case it is required to meet. Courts generally interpret documents in the nature of pleadings generously and with these goals in mind. See Fullowka v. Whitford [1996] NWTJ No. 58 and Hunt v. Carey Canada Inc. [1992] S.C.R. 959. [ 53 ] The Municipality admitted there were serious issues to be tried.

In the complaint form CNRL spoke to the question of “equity”, both generally and in the comparative sense by asking whether other tax payers were assessed or reassessed on the same basis. There is certainly an important question about what must be on the complaint form to ground jurisdiction.

The Regulation speaks in terms of “any matter in support of any issue.” A reviewing court would interpret the legislation and determine what is any “matter” and what is any “issue”; outline the degree and level of notice and specificity required to raise a matter or an issue; and decide whether CNRL’s explicit mention of equity in the complaint is sufficient to confer jurisdiction. [ 54 ] I accept that whether the CARB will consider the equity of the amended assessment goes to the fairness and efficacy of the merits hearing.

Although the rules of evidence need not apply and the CARB is the master of its procedure, this preliminary decision operates to shape what can be argued; what disclosure may be required and what reports may be tendered; helps delineate who may be called as witnesses; structures what evidence is admissible and will set the scope of permissible cross-examination. The equity issue thus has clear and profound implications for how the hearing on the merits will be conducted. [ 55 ] In my view the arguments around equity raise jurisdictional concerns that potentially affect the fairness of the hearing.

The refusal of jurisdiction over equity is not only a serious issue, it is sufficiently clear to support interlocutory review. These difficulties could be avoided if the CARB would hear evidence on equity. However, the CARB has determined that it does not have the power to reconsider its rulings. ii. Has CNRL Demonstrated Irreparable Harm? [ 56 ] The burden of proof is on CNRL to demonstrate that it will suffer irreparable harm if recourse to the courts before the CARB’s final decision is not granted. Irreparable refers to the nature of the harm suffered rather than its magnitude.

It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. [ 57 ] At this second stage the only issue to be decided is whether a refusal to grant relief could so adversely affect CNRL’s interests that the harm could not be remedied. Some of the same considerations are also relevant to the third stage of the analysis when weighing the balance of convenience.

Canvassing CNRL’s understanding of how its complaint to the CARB and its challenges in the originating notice may unfold thus provides the overall context for both remaining parts of the test. [ 58 ] The affidavit of Mr. Minter addresses the harms anticipated by CNRL if it is forced to a hearing on the merits before the CARB in May 2011. Mr. Minter’s evidence is uncontradicted and there was no cross-examination. [ 59 ] Mr. Minter testified that CNRL would expend considerable money and resources in the hearing, losses which could not be recovered even if CNRL was successful.

The Municipality disputes some of the claims and argues that what he describes merely amounts to inconvenience rather than irreparable harm. [ 60 ] Mr. Minter testified that a line by line review of the cost report of the various equipment and machinery may encompass 2,300 entries and that the resources to undertake the review would be enormous. The Municipality argues that the CARB did not determine that a line by line analysis was required. That is correct: the CARB ruling merely said the tribunal would be required to review

the evidence and did not say that a line by line inquiry was necessary. However, CNRL is the party appealing the assessment to theCARB and the CARB has determined that the party seeking a particular assessment bears the burden of proof to establish its accuracy.CNRL disputes that the merits hearing can take place within the scheduled three weeks, suggesting 12 weeks are needed to present thecase it believes is necessary to result in a changed assessment.

The Municipality argues that the CARB is in the best position to judge thelength of the hearing, given that the CARB has tried to narrow the issues in its correspondence and rulings. CNRL says the proposedtiming is unrealistic and points to initial discussions before the CARB at which CNRL said it needed four to five weeks and submissionsby counsel for the Municipality that both preparation and hearing time may take up to two months.

In my view CNRL’s view that itcannot present its request for a changed assessment in the currently allotted time is not unreasonable and can be accepted as a validassumption for the purposes of analysis. [61] CNRL says a hearing may be entirely unnecessary if it is successful in convincing a court that the amended assessment is anullity and the original assessment governs.

Even if a merits hearing is held at some later time, CNRL argues that it is better and lesscostly to allow recourse to the courts at the outset, rather than starting the hearing, adjourning because of insufficient time and forcingCNRL to split its case, conducting the CARB hearing in installments, having judicial review/appeal and then having another hearing.CNRL says any delay that will occur by allowing access to the courts now will be saved later. Existing problems with jurisdiction andfairness will be cured.

In relation to irreparable harm and the balance of convenience CNRL argues that it is best to have one hearingdone right. [62] The current process will likely produce unrecoverable and lost costs. The Municipality argues that taxpayers like CNRL knowwhat costs can be awarded before the complaint is filed. However, informed choice is not complete recovery. Further, while the CARBhas decided it can award costs, it is unlikely the hearing would be cost neutral to CNRL. Further there is the loss of time of CNRLemployees, some of whom are otherwise needed to deal with a pressing situation.

CNRL testified that significant time from two vicepresidents, a senior vice president, two members of the tax team, in-house lawyers and three consultants would be required. Particulardifficulties arise in respect of some of these individuals as they are tasked to manage the consequences of a fire in an upgrading facility. [63] While there is evidence that there would be substantial effort and expense involved in the hearing, there is no estimate of thatprospective cost and no comparison with the cost of a bifurcated process. In Wellcome Foundation Ltd. v.

Novopharm Ltd., 1992CarswellNat 705, the judge pointed out that there was no evidence as to the amount of the expense and held that such did not amount toirreparable harm. In my view, the absence of such detail or comparative figures is not fatal as the focus is on whether there is harm andits nature, and not its magnitude. [64] Other case law distinguishes between irreparable harm and inconvenience, even serious inconvenience. The Ontario Court ofAppeal in F(

S) v. Ontario (Director of Income Maintenance, Ministry of Community & Social Services), (ON CA),2000 CarswellOnt 2537, rejected a stay application because the irreparable harm alleged was based on administrative convenience andfinancial costs to be incurred if the stay was not granted. They noted that administrative inconvenience, even where serious, does notgenerally constitute irreparable harm. In Canada (Superintendent of Bankruptcy) v.

MacLeod, 2010 CarswellNat 680, the court also saidadministrative inconvenience is too trifling to justify the unusual remedy of a stay against the public decision-maker who wants toexercise its jurisdiction. Mere administrative inconvenience, without more, does not qualify as irreparable harm. In RJR the SupremeCourt said that monetary loss involving an inability to recover their costs or thrown away compliance costs with allegedlyunconstitutional legislation will not usually amount to irreparable harm. [65] However, Wachowich, C.J.Q.B. held, in Muskwachees Ambulance Authority Ltd. v.

Canadian Union of Public Employees,Local 3197 [2007] A.J. No. 1227, that continuation of a merit hearing prior to a pending ruling by the Court on the Board’s jurisdictionover the Applicant would result in irreparable harm to the Applicant, as the Applicant would incur costs that may not be compensatedfor; and the continuation of the merit hearing would result in duplicative rulings by the board and the court which would be a waste ofresources and time.

Thus, the expenditure of non-compensable costs and the potential for duplication of evidence and analysis was held to constituteirreparable harm. [66] When the issue to be tried is not only serious but affects the very fairness of the administrative proceeding more is at stakethan non-recoverable costs and inconvenience. There exists the real possibility of waste, which in turn may threaten to undermine theparties’ and the public’s confidence in the integrity of the administrative and legal systems.

It is cold comfort to a taxpayer to be told thatdespite their complaint of a significant initial error that limits what they may argue, they should just go through a long and expensiveprocess and if they are correct their remedy is to do it again. Similarly, the tribunal works too hard and labours too long to produce afutility. [67] Mr. Minter also testified that disclosure of confidential information regarding construction costs and execution strategy to

build the facility at issue would result in irreparable harm. However, the CARB controls its own process and can accommodate privacyinterests and the disclosure of such information is likely to form part of any fair merits hearing in any event. [68] Mr. Minter also testified there would be a loss of use of funds held by the municipality pursuant to the amended assessmentfor which the CARB has no ability to award interest or damages. CNRL has paid $15 million more in tax under the amended assessmentthan what would have been paid under the original assessment.

CNRL can only receive a return of what it claims is an overpayment afterthe court or the CARB makes a ruling in its favour. No interest is paid when any such overpayment may be returned. Thus, even issuccessful, CNRL has lost the time/value of any overpayment. Not only is this a financial harm that is not compensated, it means thatCNRL has a strong financial interest in avoiding delay.

This alone would qualify as irreparable harm. [69] In combination, however, the unrecoverable costs of processes that may be unnecessary or even potentially unfair, as well asthe loss of the use of any funds that have been overpaid, qualify as irreparable harm. iii.

The Balance of Convenience [70] This part of the test, sometimes called the balance of inconvenience, is a determination of which of the two parties will sufferthe greater harm from the granting or refusal of the stay, pending a decision on the merits. [71] The factors which must be considered under this part of the test are numerous and will vary in each individual case. The lawrelating to premature appeal figures prominently and the discretion to grant a stay ought to be exercised with great caution and restraintwhile the administrative process is ongoing.

The originating notices mean there will likely be a challenge to the CARB’s decision atsome point. There will be delay in any event.

The key issue is to determine when that challenge should be heard when the serious issueto be heard is a refusal of jurisdiction that goes to the heart of the fairness of a hearing that has not commenced. [72] CNRL argues that the balance of convenience favours the granting of a stay: they submit that they are not attempting tofrustrate the work of the tribunal, but to ensure that they receive a fair hearing, which is especially for important as this is the first appealunder the recent amendments to the structure; the first major industrial appeal for the CARB in the Municipality and involves a largeamount of money. [73] CNRL concedes there is the possibility it may accept the final assessment of the CARB, such that no resort to the courtswould be sought, but suggests that such a likelihood is low.

It is just as likely that the hearing will produce another originating notice. [74] CNRL argues that it does not know of any inconvenience to the CARB which may result from a stay and quoted McQuaidJ.A. of the P.E.I. Court of Appeal in Island Telephone Co. Re, (1987), (PE SCAD), 67 Nfld. & P.E.I.R. 158, cited inRJR at p. 164: I can see no circumstances whatsoever under which the Commission itself could be inconvenienced by a stay pending appeal. As aregulatory body, it has no vested interest, as such, in the outcome of the appeal.

In fact it is not inconceivable that it should welcome anyappeal which goes especially to its jurisdiction, for thereby it is provided with clear guidelines for the future, in situations where doubtmay have theretofore existed. The public interest is equally well served, in the same sense, by any appeal. [75] Other considerations arise in the balance of convenience. Where the issue is the appropriateness of a tax assessment, theinterests of the public, which the Municipality and the CARB are created to protect, must be taken into account and weighed in thebalance, along with the interests of private litigants.

The weight accorded to public interest concerns is partly a function of the nature ofthe legislation generally and partly a function of the purposes of specific piece of legislation under attack. In this regard, one purposebehind the recent amendments was to increase public confidence in the tax assessment system by having a fair and credible process. Thatassessments are done yearly and one year’s assessment has the potential to affect assessments in subsequent years, adds to the urgencyand importance of having an appropriate starting point.

[76] In Robertson v. Edmonton (City) Police Services 2003 ABCA 279 , [2003] A.J. No. 1213, the Alberta Court ofAppeal refused to hear an appeal from a decision in which the judge refused judicial review respecting a disciplinary hearing which hadnot yet even begun on the grounds that the proceedings were premature. The court concluded that to hear the appeals would do no goodand gave various reasons for why allowing the appeal might be for naught. Similarly, in EnCana Corp. v.

Alberta (Energy & UtilitiesBoard), 2004 CarswellAlta 145, the proceedings already anticipated a final hearing and the court found that it was difficult to see what, ifany, benefit could be gained by sending an interim decision back for reconsideration when the current proceedings already anticipatefurther final hearings. [77] In the case at bar there is such a benefit. If the CARB has made a reversible error in declining jurisdiction over equity, theredoes not appear to be any good reason to insist that the CARB conduct and conclude a hearing constructed on a faulty pillar.

A findingthat the CARB acted outside its jurisdiction after a final decision was reached could potentially trigger a re-hearing, with new rounds ofdisclosure, new witnesses, the recalling of witnesses previously heard, and the presentation of new arguments. All parties are prejudicedwhen they do not know at the outset of the hearing the scope and nature of the evidence to be heard. There is a significant issue whichwill affect the conduct of the hearing. [78] For all the reasons stated above, not only does the balance of convenience favour the granting of the stay, the interests ofjustice require it. 7.

Conclusion [79] A court should only exercise its discretion to allow recourse to the court during a multi-stage administrative hearing in limited,rare and exceptional circumstances. CNRL has convinced me, on the balance of probabilities, that this is such a case. The requested stayis granted. [80] While I have canvassed, and perhaps even commented upon certain parts of the parties’ arguments, I make no finding on themerits of any portion of the substantive challenges to the CARB’s decisions.

The justice hearing the matters raised by the originatingnotices will determine these issues. [81] Nor do I make any findings as to the nature of the proceedings contemplated in CNRL’s originating notices or what processmay be required by the hearing justice to have the substantive challenges heard. [82] The CARB has asked that if a stay is granted, that the court provide some guidance in terms of a timeline so it can betterunderstand how and when it may fulfill its mandate. I am prepared to hear further submissions on timing and scheduling as requested andas required. Heard on the 25th day of March, 2011.

Dated at the City of Calgary, Alberta this 1st day of April, 2011. S.L. Martin J.C.Q.B.A. Appearances:

Gilbert J. Ludwig for the Applicant Carol M. Zukiwski for the Respondent, The Regional Municipality of Wood Buffalo Gwendolyn J.

Stewart-Palmer for the Respondent, The Regional Municipality of Wood Buffalo Composite Assessment Review Board Exhibit A Date Event Reference in Record March 1, 2010 RMWB issues assessment for Roll 8992004910 (Work camps) ( not at issue in this appeal) and Roll 8992004911 (Machinery and Equipment) (at issue in this appeal) Binder 1, page 15 March 5, 2010 RMWB issues revised assessment for Roll 8992004911 (Machinery and Equipment) Binder 1, page 16 March 18, 2010 CNRL writes to RMWB requesting information Binder 1, page 20 March 22-23, 2010 RMWB provides information Binder 1, pp. 21-23, 25-26 April 28, 2010 CNRL files appeals for Roll 8992004910 and 8992004911 Binder 9, pp. 5868-5878 June 21, 2010 First Preliminary Hearing before CARB June 22, 2010 CARB decision from first hearing Binder 9, pp. 6243-6247 July 26, 2010 CNRL files materials with CARB Binders 1-3, pp. 1-1549 Binder 9, pp. 5880-5899 August 23, 2010 RMWB files materials with CARB Binders 3-4, pp. 1550-2903 Binder 9, pp. 5900-5918 August 30, 2010 CNRL files rebuttal materials with CARB Binder 5, pp. 2904-3454 Binder 9, pp. 5936-5941

September 7, 8, 9, 2010 Second Preliminary Hearing Binder 7, pp. 4205-5107 October 7, 2010 CARB issues decision Board Order CARB 007/2010-P Binder 9, pp. 6247-6270 November 8, 2010 CNRL files Originating Application Action No. 1113 00090 November 12, 2010 Third Preliminary Hearing Binder 8, pp. 5108-5227 November 25, 2010 CARB issues decision Board Order CARB 023/2010-P Binder 9, pp. 6271-6279 December 6-7, 2010 Fourth Preliminary Hearing Binder 8, pp. 5228-5867 January 4, 2011 CARB issues decision Board Order CARB 027/2010-P Binder 9, pp. 6283-6305 February 2, 2011 CNRL files second Originating Application Action No. 1113 00044 May 2-20, 2011 Proposed dates for Merit hearing in relation to roll 8992004911