Precision Drilling Corporation v. Calgary (City), 2011 ABQB 503

Court of Queen ’ s Bench of Alberta Citation: Precision Drilling Corporation v. Calgary (City), 2011 ABQB 503 Date: 20110812 Docket: 1101 02538 Registry: Calgary Between: JT Tax Consulting Ltd. on behalf of Precision Drilling Corporation Applicant - and - The City of Calgary and the Assessment Review Board for the City of Calgary and the Minister of Justice, Attorney General for Alberta Respondents _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J.T.

McCarthy _______________________________________________________ Introduction [ 1 ] This is an application for judicial review in respect of a property assessment. Precision Drilling Corporation (“Precision”) owns two warehouses in southeast Calgary. The Applicant, JT Tax Consulting Ltd. (“JT Tax”), on behalf of Precision, disputes the values at which those properties were assessed by the City of Calgary (the “City”) for 2010. [ 2 ] JT Tax brought the complaint before the Assessment Review Board for the City of Calgary (the “Board”) on August 11, 2010.

The Board confirmed the original assessments, issuing written reasons on August 26, 2010. JT Tax now seeks judicial review of that decision. The relevant portion of the Board’s decision reads as follows: Issues: 1. The assessed values of the properties have increased significantly over the past year and this is not indicative of market

conditions. 2. The subject properties would have a lower assessed value if they had been assessed using the Cost Approach to Value as opposed to the Income Approach to Value. Complainant’s Requested Value: $3,110,000 (roll # 119010601) & $5,9000,000 (roll # 120021902) Board’s Decision in Respect of Each Matter or Issue: With regard to the First Issue the assessment of the subject properties is prepared annually and the fact that the assessed value(

s) have increased over the previous year is not a valid basis for Complaint. This argument fails. With regard to the Second Issue the method that the Assessor has chosen to derive the assessed value(

s) for the subject is not a valid basis for a Complaint. The Composite Assessment Review Board (CARB) is concerned with the fairness, accuracy and equity of the assessed value(

s) in comparison to the assessments of similar properties within the same municipality. The Complainant introduced no evidence to indicate to the CARB what the resulting assessed value(

s) would be if the properties had been assessed through application of the Cost Approach to Value. This argument fails. Board’s Decision: Upon review of the [Complainant’s] evidence and having heard their argument, the Respondent was reluctant to submit evidence and requested the CARB to make a ruling with regard to ONUS and BURDEN of PROOF and whether or not the Complainant had met same.

While the Complainant’s evidence was somewhat scant, the CARB determined that ONUS had been met; however, the CARB agreed with the Respondent that the Complainant had not met the BURDEN OF PROOF requirement as they presented no property specific analysis to prove their case, but were instead relying on being able to rebut the evidence of the Respondent. The Legislative Regime [ 3 ] Proper consideration of this matter requires review of the legislative regime governing property assessment disputes.

It is common ground that, prior to January 1, 2010, such disputes were heard by an assessment review board, whose decisions could be appealed to the Municipal Government Board. Decisions of the Municipal Government Board could not be appealed, though judicial review by this Court was available. [ 4 ] On January 1, 2010, changes to the relevant legislation gave rise to a new process. Property assessment disputes are now heard initially by a Composite Assessment Review Board (“CARB”).

Two members of a CARB are appointed by a municipality; a third is appointed by the Minister of Municipal Affairs and is a member of the Municipal Government Board. The Board is a CARB. [ 5 ] The new legislation does not allow for appeals from a CARB to the Municipal Government Board. Instead, an appeal is available to this Court, with leave, on a question of law or jurisdiction, provided that question is of sufficient importance to merit an appeal and has a reasonable chance of success. This new appeal to this Court is to be found at s. 470 of the Municipal Government Act , R.S.A. 2000, c. M-26 , as amended.

The relevant provisions for purposes of this application are as follows: 470(1) An appeal lies to the Court of Queen’s Bench on a question of law or jurisdiction with respect to a decision of an assessment review board.

(2) Any of the following may appeal the decision of an assessment review board: (

a) the complainant; (

b) an assessed person, other than the complainant, who is affected by the decision; (

c) a municipality, if the decision being appealed from relates to property that is within the boundaries of that municipality; (

d) the assessor for a municipality referred to in clause (c).

(3) An application for leave to appeal must be filed with the Court of Queen’s Bench within 30 days after the persons notified of thehearing receive the decision under

section 469, and notice of the application for leave to appeal must be given to (

a) the assessment review board, and (

b) any other person as the judge directs. ...

(5) On hearing the application and the representations of those persons who are, in the opinion of the judge, affected by theapplication, the judge may grant leave to appeal if the judge is of the opinion that the appeal involves a question of law or jurisdiction ofsufficient importance to merit an appeal and has a reasonable chance of success. [6] It is agreed among the parties that no appeal of the Board’s decision was filed within the thirty-day period, though noevidence was led as to the reason for that.

Interplay Between Judicial Review and Appeal [7] There is a considerable body of case law dealing with the question of when judicial review should be grantednotwithstanding the availability of an appeal. Two fundamental points must be borne in mind. First, the authority of the superior courts toreview the decisions of administrative tribunals is constitutional in nature and cannot be derogated by Parliament or by the provinciallegislatures: Dunsmuir v. New Brunswick, 2008 SCC 9, 1 S.C.R. 190. Second, judicial review is discretionary in nature: Harelkin v.University of Regina, (SCC), [1979] 2 S.C.R. 561.

This leads to a balancing exercise. Parliament or a legislature may notforeclose judicial review, but the courts will be slow to grant it if the legislation provides for what has been called an “adequatealternative remedy”. [8] The process for determining whether an appeal constitutes an adequate alternative remedy was succinctly canvassed byHillier J. of this Court in BP Canada Energy Company v.

Alberta Energy and Utilities Board, 2003 ABQB 875, 356 A.R. 363 at paras.23, 29 and 34: The central issue for determination is not so much whether the Court possesses jurisdiction to hear the application for judicial review;the issue is whether this Court should decline to exercise its jurisdiction, if the alternate remedy, a statutory appeal, is adequate and thecircumstances are not extraordinary. ... The leading decision on the question of granting judicial review in the face of access to appeal is [Harelkin].

In that case, as here, theapplication for judicial review was based on allegations of breach of statutory obligations and duties of fairness in the course ofdeliberations under an administrative process. The Supreme Court confirmed the discretionary nature of judicial review. Where an

applicant has access to an adequate right of appeal, judicial review should be declined. Factors to be assessed include: (

a) Procedure on the appeal; (

b) Composition of the appeal tribunal; (

c) Powers of the appeal tribunal; (

d) Manner for exercise of such powers; (

e) Burden of the previous finding; (

f) Expeditiousness; and (

g) Costs. ... However, Harelkin acknowledges that special circumstances may override the adequacy of the appeal. [9] However, JT Tax argues that different considerations apply when both an appeal and a judicial review application would beheard in the same forum, namely this Court. For this proposition, JT Tax relies on the judgment of Slatter J.A. in Buckley v. Entz Estate,2007 ABCA 7, 401 A.R. 231 at paras. 13 and 14: The Act gives a right of statutory appeal to the Court of Queen’s Bench on a question of law or jurisdiction. Issues of mixed fact and law,or pure fact, are subject to judicial review.

In borderline cases there may be some uncertainty as to the appropriate procedure. To avoidthis problem it is increasingly becoming the practice of cautious applicants to launch an application for judicial review, and an appeal,under the same Originating Notice. The respondents Buckley and H&R Transport did not appeal the decision of the AppealsCommission. Rather, they applied for judicial review only. Counsel for the Appeals Commission drew this to the panel’s attentionduring argument.

The Court of Queen’s Bench has jurisdiction to judicially review the decisions of tribunals, even where a right of appeal exists. However,where an equally effective alternative remedy exists, the court will often exercise its discretion to refuse a remedy on judicial review:[Harelkin]; Canadian Pacific Ltd. v. Matsqui Indian Band, (SCC), [1995] 1 S.C.R. 3, at paras. 32-38, 112, and 140-153. The courts generally insist on the exhaustion of administrative remedies, in order to avoid undermining the administrative appealstructure with applications for judicial review.

An application for judicial review in the face of an administrative appeal deprives theappeal tribunal of its jurisdiction itself to hear the appeal. However, where the right of appeal and the application for judicial reviewwould both be to the same tribunal (the Court of Queen’s Bench), this factor is not in play, and there is no reason why judicial review ona question of law or jurisdiction should not be available notwithstanding the right of appeal. The standard of review will be the samewhether the matter is brought forward by judicial review, or by way of appeal: Dr. Q. v.

College of Physicians and Surgeons of BritishColumbia, [2003] 1 S.C.R. 226, 2003 SCC 19, at para. 21. Therefore, in these circumstances it is not always necessary for the court torecast the proceedings under Rule 753.16, although that rule confirms that the form of the application is no impediment to the reliefapplied for.

Thus the form of the application before the Court of Queen’s Bench is not of any significance in this matter. [10] While it is true that allowing judicial review rather than appeal when both are to be made to this Court does not derogate fromthe authority of the relevant administrative tribunal, I am satisfied that there are, to paraphrase Slatter J.A., other factors in play. The Citycited the Court of Appeal’s decision in Milner Power Inc. v. Alberta (Energy & Utilities Board), 2007 ABCA 265, 417 A.R. 115.

In thatcase, the power company had brought both a statutory appeal of the administrative tribunal’s decision to the Court of Appeal and anapplication for judicial review of that decision to the Court of Queen’s Bench. This Court dismissed the application for judicial reviewand that decision was appealed to the Court of Appeal. Paperny J.A. made these comments at paras. 27 and 34: We see no reviewable error in this conclusion.

Section 26 grants the Court of Appeal the jurisdiction to decide all questions of law orjurisdiction that arise from decisions of the EUB. Allegations of bias and breaches of natural justice are such questions. It is the clearintent of the legislature that this Court address those issues by way of an appeal under the AEUB Act. As this Court noted in Foster atpara. 16, to be meaningful s. 26 must apply to all appeals complaining of errors of law or jurisdiction. ... For these reasons, I have concluded that an appeal under s. 26 is an adequate alternative remedy in this case, and that the chambers judge

did not err in declining to hear the judicial review application. [ 11 ] Interestingly, Slatter J.A. concurred in that decision, stating as follows at para. 38: I have had the advantage of reading the reasons prepared by Paperny J.A., and I agree with her reasons in concluding that judicial review is not available in this case, because the right of appeal to the Court of Appeal is an adequate alternative remedy. [ 12 ] It is true that, in contrast to Buckley and to this case, the appeal and the application for judicial review in Milner Power were not to the same forum.

Nevertheless, I find instructive Paperny J.A.’s reference to the clear intent of the legislature and to the necessity for a statutory appeal to be meaningful. [ 13 ] I note, too, that the Court of Appeal made similar comments in Foster v. Alberta (Transportation and Safety Board) , 2006 ABCA 282 , 397 A.R. 82, which was referred to in Milner Power . The statute at issue in Foster allowed for appeals from a board to this Court in some circumstances and to the Court of Appeal in others.

The question was whether a party could seek judicial review in this Court on a question of law when the statute provided a right of appeal to the Court of Appeal on such questions. Ritter J.A. made these comments at paras. 16, 17 and 19: If Foster must appeal a question of law to this Court but must also pursue judicial review of other matters in the Court of Queen’s Bench, at least two court appearances will be required.

On the other hand, if a s. 49 appeal is considered an inadequate remedy for reasons of convenience and expediency each time issues of both law and fact are raised, then the Legislature’s direction in providing a statutory right of appeal for questions of law or jurisdiction will be rendered meaningless. The Legislature expressly granted a right of appeal to this Court for errors of law and jurisdiction.

Section 49 is succinct and clear. It deals only with the right of appeal from alleged questions of law or jurisdiction. To be meaningful, s. 49 must apply to all appeals complaining of errors of law or jurisdiction, even if the appeal also alleges that other types of errors (fact or mixed fact and law) were made by the Board. ... The outcome of this analysis (that matters of law or jurisdiction must be dealt with on appeal to this Court and not by judicial review) is not ideal.

Appellants will be required to decide correctly whether their case raises an issue of law (as opposed to either mixed law and fact, or fact). They will also need to decide whether to both appeal and seek judicial review when both legal and factual errors are alleged. [ 14 ] Thus, the Court of Appeal held that the legislature’s decision to separate the rights to appeal and to judicial review must be respected, even when some inefficiency results.

Though that case also did not involve two potential applications to the same forum, these are useful statements of principle. [ 15 ] Finally, I take guidance from the Court of Appeal’s reasons in Merchant v. Law Society of Alberta , 2008 ABCA 363 , 440 A.R. 377 at para. 3 : Counsel for Merchant argues that whether to deny judicial review on that ground [that there was a statutory appeal] is within the discretion of the chambers judge. That is true to an extent, but the word “discretion” is vague, and is no substitute for looking at the case law.

The chambers judge does not have an unfettered choice, and a long line of case law lays down criteria for making that choice. If there is a clear right of appeal, and the appeal would be an adequate remedy, only in very exceptional circumstances will the courts grant judicial review instead. There are no exceptional circumstances here. [Emphasis added.] [ 16 ] Taking into consideration all of the above, I cannot conclude that Slatter J.A. intended to say in Buckley that judicial review always should be available notwithstanding a statutory appeal when both are to be heard by this Court.

To avoid rendering the right of appeal nugatory, a distinction must be made between the two remedies, regardless of the overlapping forum. This is particularly so when the two remedies are subject to different conditions, as in this case where there is a significant difference in the relevant limitation periods.

The Questions At Issue [17] At this point in the analysis, I must consider the nature of the questions before me. Are they questions of law or jurisdictionthat are within the purview of the statutory right of appeal or are they matters falling outside that scope that properly are the subject ofjudicial review? In its brief, JT Tax sets out the questions as follows: (

i) In a proceeding where a breach of natural justice occurs, should the Court exercise its discretionary jurisdiction to quash theboard decision on judicial review and send the matter back for rehearing in accordance with the rules of natural justice? (ii) Where the Board finds the Complainant has met the onus, but the same Board terminates the hearing for reasons so inadequatethat make the decision a nullity, should the Court exercise the discretionary remedy of judicial review, quash the decision, and remit itback to the Composite Assessment Review Board for hearing in accordance with the principles of natural justice? (iii) When the Board has misapplied the principles of the requirements for a non suit in mid hearing such that it affects thefundamental fairness of the hearing, does judicial review provide a remedy to correct the Board’s fundamental breach? [18] All of these, in my view, are questions of law.

Indeed, counsel for JT Tax acknowledged as much in oral argument. There isabundant case law in support of the proposition that a question of whether there has been a breach of the duty of fairness or of naturaljustice is a question of law; see, for example, Foster at para. 13 and Milner Power at para. 27. [19] With respect to the alleged lack of reasons, the case law is clear that the requirement to give reasons is part of the duty ofprocedural fairness. This was expressly stated by L’Heureux-Dubé J. in Baker v.

Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 S.C.R. 817, which was cited by JT Tax itself. Therefore, this too is a question of law and is subject toappeal. Special or Extraordinary Circumstances [20] To preclude judicial review, however, the alternative remedy must be “adequate”. In numerous cases, the courts have referredto the possibility that special or extraordinary circumstances may justify judicial review despite an alternative remedy such as appeal.

Inoral argument, counsel for JT Tax argued that four such special circumstances exist in this case. [21] First, JT Tax asserted that the Board’s decision is so flawed as to invite this Court to exercise its discretion to grant judicialreview. The difficulty with this assertion is that it seems to require an assessment of the merits of the decision.

While judicial reviewinvolves, at least to some extent, consideration of the merits of a tribunal’s decision, this glosses over the threshold question of whetherjudicial review is available in this case. [22] On the other hand, in making his argument on this point, counsel for JT Tax took the position that the Board’s decision wasessentially incomprehensible. In essence, then, this argument returns to the question of the adequacy of the Board’s reasons.

This, asdiscussed above, is a question of law that is subject to an appeal and I cannot see how this factor, in and of itself, can constitute anextraordinary circumstance that would justify granting judicial review. [23] In its brief, JT Tax alleges that the Board’s reasons are so inadequate as to render the decision a nullity. This, however, is ofno assistance. In Merchant, counsel asserted that bias on the part of the impugned tribunal produced a nullity and that this should giverise to an exception permitting judicial review rather than appeal.

The Court of Appeal rejected this argument, holding that such anexception would be impossible or, at best, unworkable in practice.

[24] Therefore, I reject the argument that this first point constitutes an extraordinary circumstance sufficient to merit judicialreview in the face of the available appeal. [25] The second point that JT Tax asserts warrants judicial review is that the current property tax dispute process is an “entirelynew regime” and that parties are still working through their confusion around it.

As an example of that confusion, JT Tax pointed out thatthere was some disagreement among the parties as to who should be the complainant for purposes of this dispute - JT Tax or PrecisionDrilling. [26] I have considerable difficulty with this argument for several reasons. First, I note that counsel for JT Tax, at the beginning ofhis oral submissions, indicated that he was prepared to consent to the addition or substitution of Precision Drilling as a party to theproceedings.

Further, while counsel pointed out that there is no evidence that Precision Drilling received notice of the Board’s decision,he readily conceded that JT Tax had received it. Therefore, it seems that little turns on this point. [27] Moreover, if there is indeed some uncertainty with respect to who should be the complainant for purposes of this dispute, itseems to me that this too is a question of law, being an issue of statutory

interpretation. [28] Finally, I note that s. 470(3) of the Municipal Government Act clearly provides a thirty-day limitation period for the filing ofan appeal. I do not see how there could be confusion or uncertainty on that point. If the confusion arising from the change in the disputeresolution process is as to whether a particular question should be resolved by judicial review or appeal, then it seems to me that the“cautious approach” articulated by Slatter J.A. in Buckley has much to recommend it.

I do not see how failure to adopt that cautiousapproach can be considered an extraordinary circumstance. [29] Third, JT Tax takes the position that a more interventionist approach is required given that this is a “tax matter”. JT Taxargues that the courts in Alberta have a longstanding tradition of playing a supervisory role in such matters and of intervening evenwhere there has been no appeal in recognition of the fact that tax matters involve the power of the state being pitted against an individual.He cites a number of cases in support of this proposition: Canadian Pacific Ltd. v.

Matsqui Indian Band, (SCC), [1995]1 S.C.R. 3; Pacific Logging Co. v. British Columbia (Assessor), (SCC), [1977] 2 S.C.R. 623; Sommers v. Edmonton(City), 1978 ALTASCAD 195 , [1978] 10 A.R. 48 (S.C.A.D.); Barron v. Foothills (Municipal District No. 31), 1984 ABCA343 , [1984] 57 A.R. 71 (C.A.); and Alliance Pipeline Ltd. v. Alberta (Minister of Municipal Affairs), 2006 ABCA 9, 376 A.R.44. However, my review of those cases does not indicate that there is anything in the analysis that is particular to taxation.

Rather, thecases turn on such matters as independence of the tribunal (Matsqui), assessments being made without statutory authority (PacificLogging, Sommers, Barron) and statutory

interpretation (Alliance Pipeline). Therefore, I am not satisfied that there is anythingextraordinary inherent in the fact that this matter concerns taxation. [30] Finally, JT Tax points out that its statutory right of appeal is limited not only to questions of law or jurisdiction, but further toquestions that are “of sufficient importance to merit an appeal” and that have “a reasonable chance of success”.

Counsel argues that this,too, is an extraordinary circumstance that justifies judicial review. [31] I cannot accept this assertion as I am not satisfied that the limitations on the statutory right of appeal render that remedyinadequate. I note that the Court of Appeal in Merchant at para. 23 made clear that the requirement is that the remedy be adequate, notthat it be preferable: Merchant also relies on a decision of the Saskatchewan Court of Appeal in Spence v. Spencer (Pr. Albert Police Comm’rs.), (1987) (SK CA), 25 Admin. L.R. 90, 53 Sask.R. 35 (C.A.), leave den. (1987) 58 Sask.R. 80, 80 N.R. 316.

That decision alsoallowed judicial review in a (police) discipline case involving allegations of ex parte reception of evidence and bias. It quoted at lengthboth the dissent and the majority judgment in the Harelkin case. It then said that a statutory appeal might not be effective because theappellate tribunal might not hold a hearing de novo.

The possibility that it would order a new hearing on the merits was not discussed.Instead, the Saskatchewan Court of Appeal said that “it is doubtful that the objection ... will be dealt with as a challenge to jurisdictionand more likely that the matter will be dealt with on the merits” (at para. 26). Why they thought that, we have no idea. It seems tocontradict the Court of Appeal’s fear that the statutory appeal would not be heard de novo.

Then the Saskatchewan Court of Appeal heldthat the ratio of the majority in Harelkin was that the appeal must be “a more efficient remedy” than judicial review (emphasis added) (atpara. 29). But Harelkin does not say that; it speaks of appeal as “an adequate alternative remedy”. We respectfully decline to follow theSpence decision, and prefer to follow the Supreme Court of Canada’s majority’s actual words in Harelkin.

[ 32 ] The requirements that leave to appeal be granted and that the question be of importance and have some chance of success represent, in my view, a reasonable attempt on the part of the legislature to prevent unmeritorious appeals. In this regard, these comments from Ritter J.A. in Foster at paras. 21 and 22 are instructive: The present legislation is also less than ideal because it contains no leave requirement for appeals to this Court. Many other regulatory statutes grant a right of appeal to this Court, but generally also require leave from a judge of this Court.

Established legal tests ensure that leave will only be granted if the appeal meets the statutory criteria, does not raise settled issues of law and has some hope of success: see for example Kirchmeir v. Boulanger (2000), 271 A.R. 340 (C.A.), 2000 ABCA 324 at para. 9 . An unfettered right of appeal risks meaningless appeals because, when combined with a successful application for a stay of the license suspension pending appeal, the inevitable loss of driving privileges is delayed. For some that delay may become the entire rationale behind the appeal.

Given the number of impaired administrative license suspensions currently administered in Alberta, there is also a floodgates concern. The Legislature may wish to consider adding a leave requirement to s. 49. Administrative proceedings should be efficient. Multiple proceedings are not. Unmeritorious appeals and those brought merely to delay license suspensions accomplish nothing; they simply add to the societal burden of ensuring safe driving.

The Legislature may wish to consider if the present ss. 48 and 49 provide an appropriate appellate framework for administrative license suspensions. [ 33 ] Therefore, I disagree that the limitations on the statutory remedy are an extraordinary circumstance. Disposition [ 34 ] To summarize, in appropriate circumstances, judicial review is available in respect of CARB decisions notwithstanding the statutory right of appeal.

In this case, however, the issues raised by JT Tax are questions of law for which the appeal was an adequate alternative remedy and there are no extraordinary circumstances which justify granting judicial review. [ 35 ] In the result, the application for judicial review is dismissed. The City and the Board shall have their costs. Heard on the 21 st day of July, 2011. Dated at the City of Calgary, Alberta this 9 th day of August, 2011. J.T. McCarthy J.C.Q.B.A. Appearances: G. Ludwig Wilson Laycraft for the Applicant, JT Tax Consulting Ltd.

P. Frank City of Calgary Law Department for the Respondent, The City of Calgary P. Knoll, Q.C. University of Calgary Faculty of Law for the Respondent, The Assessment Review Board