Altus Group Limited v. Edmonton (City), 2011 ABQB 760

Court of Queen ’ s Bench of Alberta Citation: Altus Group Limited v. Edmonton (City), 2011 ABQB 760 Date: 20111207 Docket: 1103 06594 Registry: Edmonton Between: Altus Group Limited Applicant - and - The City of Edmonton and Edmonton Assessment Review Board Respondents Corrected judgment: A corrigendum was issued on December 13, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.A.

Jerke _______________________________________________________ [ 1 ] Altus Group Limited (Altus) filed property tax complaints with the Composite Assessment Review Board (CARB) for 166 industrial warehouses of which 88 included the claim that the income approach to assessment produced a more reliable estimate of market value. On the first day of the hearing it was agreed by the parties that one of the 88 roll numbers would be heard first with evidence, submissions and argument from it carrying through to each of the other hearings. The other 78 roll numbers are not at issue in

this appeal. [ 2 ] After the first day of the hearing Altus withdrew the income approach argument. Thirty-three of the 88 hearings had relied solely on that argument, were presented to the CARB as scheduled, and confirmed. The remaining 55 proceeded to hearing on other grounds. Seven of these assessments were varied (reduced) and the remaining were confirmed by the CARB. [ 3 ] The City of Edmonton (the City) made an application for costs. [ 4 ] The CARB awarded $18,100.00 in costs to the City. The costs were apportioned equally among the 88 roll numbers. Altus seeks leave to appeal the costs decision.

In addition to opposing the application for leave, the City also denies that Altus has standing to make the application. Issue 1 Does Altus have standing to apply for leave to appeal? [ 5 ] The City contends that Altus is neither a complainant nor an assessed person and therefore has no standing to make this application. Altus does not claim status as an assessed person. [ 6 ] Section 470(2) of the Municipal Government Act , RSA 2000, c M-26, ( MGA ) provides: Any of the following may appeal the decision of an assessment review board: (

a) the complainant; (

b) the assessed person, other than the complainant, who is affected by the decision; ... [ 7 ] “Complainant” is not defined in the MGA or the regulation, the Matters Relating to Assessment Complaints Regulation , Alta Reg 310/2009 ( MRAC ). [ 8 ] Altus was agent in respect of all 88 complaints, and was named as a party in the complaint hearings and the costs application. It would be unusual if Altus was not permitted to bring an application for leave to appeal. [ 9 ] The provisions of the MGA do not specifically permit or prevent Altus from making this application.

The relevant sections (with emphasis added) state: 460(3) A complaint may be made only by an assessed person or a taxpayer. 469 The designated officer ... must ... send the board’s written decision and reasons ... to the persons notified of the hearing under section 462(1)(

b) or (2)(b), as the case may be. 470(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 the hearing 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 persons as the judge directs. 470(5) On hearing the application and the representations of those persons who are, in the opinion of the judge, affected by the application , the judge may grant leave to appeal ... 470(6) If a judge grants leave to appeal, the judge may (

a) direct which persons or other bodies must be named as respondents to the appeal, ... 470(8) Notice of the appeal must be given to the parties affected by the appeal and to the assessment review board. [ 10 ] Reading the sections together it is reasonable to conclude that a party to a CARB hearing has status to apply for leave to appeal a CARB decision. [ 11 ] The MRAC contemplates that a complaint may be filed by an agent: 51 An agent may not file a complaint or act for an assessed person or taxpayer at a hearing unless the assessed person or taxpayer has prepared and filed with the clerk or administrator an assessment complaints agent authorization form set out in

Schedule 4. [ 12 ] An assessment complaints agent authorization in the prescribed form was completed and filed. It was accompanied by a completed Assessment Review Board complaint (the Form), which named Altus as the complainant.

The Form includes the question: Is the complainant the assessed person or taxpayer for the property under complaint. □ Yes ☒ No [ 13 ] The Form also provides: Complainant Name (if the complainant, assessed person, or taxpayer is a company, enter the complete legal name of the company) Altus Group Ltd. [ 14 ] Altus was treated as the complainant in respect of all 88 complaints and as a party at the hearing resulting in the costs decision. [ 15 ] The costs were apportioned to the various roll numbers pursuant to MRAC Section 52(5): If the complainant is ...

(

c) an agent for that assessed person or taxpayer, the assessed person or the taxpayer is responsible for any costs awarded by a composite assessment review board. [ 16 ] Under MRAC Section 52(6) Altus could have been made responsible for the costs: If the complainant is ... (

c) an agent for that assessed person or taxpayer, the complainant is responsible for any costs awarded by a composite assessment review board. [ 17 ] I am of the view that the statutory scheme contemplates the inclusion of an agent in the entire complaint process, including any appeal resulting from the decision which was the subject matter of the original complaint, or in related matters such as an appeal from a CARB decision awarding and allocating costs with respect to a complaint hearing.

I find that Altus is a complainant within the meaning of the MGA and accordingly has status to appeal the CARB decision. [ 18 ] Altus was agent for all 88 roll numbers against which the costs award was allocated. I find that it is not necessary to provide the 88 roll numbers with notice of the leave to appeal application under Section 470(3) (

b) of the MGA . Issue 2 Should leave to Appeal be granted? [ 19 ] In order to grant leave to appeal, the Court must determine whether the applicant has met the statutory requirements in Section 470(5) of the MGA , which are: 1. The issue raised is a question of law or jurisdiction. 2. The appeal involves a question of sufficient importance to merit an appeal. 3. The appeal has a reasonable chance of success. [ 20 ] This determination must be made for each proposed ground of appeal. Altus argues the following grounds: A.

Did the CARB err in law or otherwise exceed its jurisdiction in awarding costs in excess of its statutory authority? B. Did the CARB err in law or otherwise exceed its jurisdiction in finding an abuse of process? C. Did the CARB err in law or otherwise exceed its jurisdiction in exercising its discretion to award costs? D. Did the CARB err in law or otherwise exceed its jurisdiction in failing to articulate and provide adequate reasons for its award of

costs? A. Did the CARB err in law or otherwise exceed its jurisdiction in awarding costs in excess of its statutory authority? [ 21 ]

Section 468.1 of the MGA provides: A composite assessment review board may, or in the circumstances set out in the regulations must, order that costs of and incidental to any hearing before it be paid by one or more of the parties in the amount specified in the regulations. [ 22 ] The power to make regulations governing costs is provided in

Section 484.1 of the MGA : The Minister may make regulations (

l) respecting costs that may or must be imposed by a composite assessment review board in respect of a hearing, including, without limitation, regulations respecting (

i) the circumstances in which costs must be imposed, and (ii) the amount of costs; [ 23 ] MRAC provides: 52(1) Any party to a hearing before a composite assessment review board or the Municipal Government Board may make an application to the composite assessment review board or the Municipal Government Board, as the case may be, at any time, but no later than 30 days after the conclusion of the hearing, for an award of costs in an amount set out in

Schedule 3 that are directly and primarily related to matters contained in the complaint and the preparation of the party’s submission.

(2) In deciding whether to grant an application for the award of costs, in whole or in part, the composite assessment review board or the Municipal Government Board may consider the following: (

a) whether there was an abuse of the complaint process; (

b) whether the party applying for costs incurred additional or unnecessary expenses as a result of an abuse of the complaint process.

(3) A composite assessment review board or the Municipal Government Board may on its own initiative and at any time award costs.

(4) Any costs that the composite assessment review board or the Municipal Government Board award are those set out in

Schedule 3. [ 24 ]

Schedule 3 of MRAC contains a table which sets out costs amounts for various steps at varying assessed property values. The introduction to the

schedule states:

Schedule 3 Table of Costs Where the conduct of the offending party warrants it, a composite assessment review board or the Municipal Government Board may award costs up to the amounts specified in the appropriate column in

Part 1. Where a composite assessment review board or the Municipal Government Board determines that a hearing was required to determine a matter that did not have a reasonable chance of success, it may award costs, up to the amounts specified in the appropriate column in

Part 2 or 3, against the party that unreasonably caused the hearing to proceed. [ 25 ]

Section 468.1 of the MGA directs that in the circumstances set out in the Regulations the CARB must order that costs of and incidental to the hearing be paid, up to the amount specified in the Regulations. The CARB appears to have proceeded on this “must order” basis. [ 26 ] The CARB conducted an analysis of the circumstances in which costs must be imposed. It considered whether there was an abuse of the complaint process, and whether the City incurred additional or unnecessary expenses as a result of the abuse of the complaint process.

It was entitled to do so under Section 52(2) of the MRAC . [ 27 ] Altus contends that the CARB’s jurisdiction to award costs is limited by Section 52(4) of MRAC , which states any costs awarded by CARB are those set out in

Schedule 3. [ 28 ] In my view, Section 52(4) of MRAC may not limit the CARB’s jurisdiction to make an award of costs. It could merely repeat

Section 468.1 of the MGA , which provides that a discretionary or mandatory award of costs must be in the amount specified in the regulations, in particular

Schedule 3. [ 29 ] The CARB awarded costs under

Part 2 of

Schedule 3. The

preamble to

Schedule 3 provides (emphasis added), Where a [CARB] ... determines that a hearing was required to determine a matter that did not have a reasonable chance of success, it may award costs up to the amounts specified in the appropriate column in

Part 2 or 3, against the party that unreasonably caused the hearing to proceed. [ 30 ] In order for the CARB to engage

Part 2 of

Schedule 3, it needed to determine that a hearing was required to determine a matter that did not have a reasonable chance of success. The income approach to assessment was withdrawn by Altus after the first day of the hearing. Only 33 of the affected roll numbers relied solely on the income argument, and the remaining 55 proceeded to a hearing on other grounds, of which seven were varied.

CARB does not discuss this point, however, it may be possible to infer that resolution of the income argument with respect to the 88 matters was a hearing required to determine a matter that did not have a reasonable chance of success. [ 31 ] It is arguable that there is nothing in the MGA or MRAC that authorizes the CARB to exceed the amount of costs specified in

Schedule 3 through the costs allocation procedure set out in Section 52(5) of the MRAC . Here, by agreement, there was one hearing which applied to a number of matters. The costs awarded by CARB were $18,100.00, an amount which could exceed the maximum award under

Part 2 of

Schedule 3. [ 32 ] This issue raises a question of law or jurisdiction, involving the

interpretation of the MGA and the MRAC .

[33] No reasons are given by the CARB for awarding costs in the amount it did. An analysis needs to be undertaken to determinewhich standard of review applies; but even assuming that a standard of reasonableness will prevail, I am of the view that the appeal has areasonable chance of success. There is a reasonable chance that on an analysis of the MGA and MRAC a Court could conclude that theCARB made a reviewable error. [34] The current application directly affects 88 separate roll numbers.

The matter of costs in hearings of this nature are of obviousinterest to anyone involved in the assessment complaints process. This is one of the first, if not the first, application for leave to appealwith respect to a CARB costs decision since the MGA and it’s associated regulations were amended in 2009. In my view, questionsconcerning the

interpretation of the MGA and MRAC with respect to awards of costs raise questions of sufficient importance to merit anappeal. B. Did the CARB err in law or otherwise exceed its jurisdiction in finding an abuse of process? [35] The issue posed by the CARB was: Have the parties [sic] actions amounted to an abuse of process warranting an award of costs? [36] The reasons state: CARB does not find that the actions of the Respondent amounted to bad faith.

However whether categorized as negligence orcarelessness or a lack of attention to detail, the result of this massive disclosure of evidence and challenge to the assessment modelrequired the Applicant to prepare detailed and careful response to it.

In the circumstances a great deal of this expenditure of time andresources became redundant when the Respondent withdrew its income argument and disclosure at first hearing. [37] The City contends that the question of whether an abuse of the complaint process took place would most often be a questionof mixed law and fact, as it would always require analysis of what the CARB considers to be “an abuse of the complaint process”followed by the application of the facts to that test. [38] While that may be so, it is useful to consider the differences between fact, law, and mixed fact and law. [39] Justice Iacobucci in Canada (Director of Investigation and Research) v Southam Inc, (SCC), [1997] 1 SCR 748, 144 DLR (4th) 1, commented as follows: 35 ...

Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actuallytook place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. A simpleexample will illustrate these concepts. In the law of tort, the question what “negligence” means is a question of law. The questionwhether the defendant did this or that is a question of fact.

And, once it has been decided that the applicable standard is one ofnegligence, the question whether the defendant satisfied the appropriate standard of care is a question of mixed law and fact. ... [40] The CARB appears to conclude that an abuse of the complaints process occurs where there is negligence, carelessness or alack of attention. The

interpretation of the phrase “abuse of the complaints process” is an identifiable question of law. [41] The City contends that there is no rational link between the phrases “abuse of process” and “abuse of the complaint process”.The phrase “abuse of the complaint process”, as it is used in MRAC, obviously restricts abuses to be considered to those that occurwithin the MRAC complaints process. It seems to me, however, that “abuse of process” is at least a cousin of “abuse of the complaintprocess”, and the former may be of assistance in interpreting the latter.

[42] The phrase “abuse of process” was discussed, albeit in another context, by Arbour J. in Toronto (City) v. Canadian Union ofPublic Employees, (CUPE), Local 79, 2003 SCC 63, [2003] SCR 77:

(3) Abuse of Process 35 Judges have an inherent and residual discretion to prevent an abuse of the court’s process. This concept of abuse of process wasdescribed at common law as proceedings “unfair to the point that they are contrary to the interest of justice” R. v. Power, (SCC), [1994] 1 S.C.R. 601, at p. 616), and as “oppressive treatment” R. v. Conway, (SCC), [1989] 1 S.C.R. 1659,at p. 1667). McLachlin J. (as she then was) expressed it this way in R. v.

Scott, (SCC), [1990] 3 S.C.R. 979, at p. 1007: . . . abuse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamentalprinciples of justice underlying the community’s sense of fair play and decency. The concepts of oppressiveness and vexatiousnessunderline the interest of the accused in a fair trial. But the doctrine evokes as well the public interest in a fair and just trial process andthe proper administration of justice. 36 The doctrine of abuse of process is used in a variety of legal contexts.

The unfair or oppressive treatment of an accused may disentitlethe Crown to carry on with the prosecution of a charge: Conway, supra, at p. 1667. In Blencoe v. British Columbia (Human RightsCommission), [2000] 2 S.C.R. 307, 2000 SCC 44, this Court held that unreasonable delay causing serious prejudice could amount to anabuse of process. When the Canadian Charter of Rights and Freedoms applies, the common law doctrine of abuse of process issubsumed into the principles of the Charter such that there is often overlap between abuse of process and constitutional remedies (R. v.O’Connor, (SCC), [1995] 4 S.C.R. 411).

The doctrine nonetheless continues to have application as a non-Charterremedy: United States of America v. Shulman, [2001] 1 S.C.R. 616, 2001 SCC 21, at para. 33. 37 In the context that interests us here, the doctrine of abuse of process engages “the inherent power of the court to prevent the misuse ofits procedure, in a way that would . . . bring the administration of justice into disrepute” (Canam Enterprises Inc. v. Coles, (2000), (ON CA), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting (approved 2002 SCC 63, [2002] 3 S.C.R. 307,2002 SCC 63)).

Goudge J.A. expanded on that concept in the following terms at paras. 55-56: The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would bemanifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is aflexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel. See House of Spring Gardens Ltd. v.Waite, [1990] 3 W.L.R. 347 at p. 358, [1990] 2 All E.R. 990 (C.A.).

One circumstance in which abuse of process has been applied is where the litigation before the court is found to be in essence an attemptto relitigate a claim which the court has already determined. [Emphasis added.] [43] The CARB appears to have used a definition of abuse of process other than that employed in other contexts.

Even assumingthat the standard of review would be found to be reasonableness, I am of the view that the appeal on this ground has a reasonable chanceof success. [44] As discussed previously, the matter of costs in hearings of this nature is a question of sufficient importance to merit an appeal.Furthermore,

interpretation of the phrase “abuse of the complaints process” may well have implications beyond the MGA and theCARB. C. Did the CARB err in law or otherwise exceed its jurisdiction in exercising its discretion to award costs? [45] Under this ground, Altus reiterates its argument that the CARB erred in finding that there had been an abuse of process, andthat the abuse of process resulted in unnecessary or additional expenses. Because of this error, Altus further argues that the CARB hadno discretion to award costs.

[ 46 ] The CARB’s jurisdiction to award costs is found in

Section 468.1 of the MGA . That

section articulates when the CARB must order costs, but also provides that it may order costs. That discretion is, in my view, then limited by the regulations, however, a discretion it remains. [ 47 ] In any event, the CARB did not proceed under the discretionary power to award costs but on the basis of circumstances under which it must award costs. [ 48 ] This argument is already encompassed under the first and second grounds argued by Altus, and therefore leave on this issue is not granted. D.

Did the CARB err in law or otherwise exceed its jurisdiction in failing to articulate and provide adequate reasons for its award of costs? [ 49 ] The City concedes that a question of whether reasons are adequate is generally considered to be a question of law or jurisdiction. [ 50 ] Reasons are generally held to be inadequate where they fail to provide enough information to inform the parties of the possible basis for any appeal. If they do not allow for meaningful appellant review, they will also be held to be inadequate ( Law Society of Upper Canada v.

Neinstein , 2010 ONCA 193 ). [ 51 ] Altus contends that the reasons of the CARB are inadequate in three respects. These matters are all related to the first two issues. An appeal on those issues will require an examination of the reasons as related to them, and therefore granting leave on this question is not necessary. Conclusion [ 52 ] The first issue raises a question of law or jurisdiction with respect to

interpretation of the governing statute and relevant regulation. The second issue raises a question of law with respect to the

interpretation of a phrase contained within the regulation. Both questions have a reasonable chance of success, the determination of which may be of significant precedential value in MGA appeals and other processes generally. [ 53 ] In the result, I allow the application of Altus Group Limited for leave to appeal the following questions: A. Did the CARB err in law or otherwise exceed its jurisdiction in awarding costs in excess of its statutory authority? B.

Did the CARB err in law or otherwise exceed its jurisdiction in finding an abuse of process? [ 54 ] Costs should be determined by the Judge hearing the appeal. Heard on the 03 rd day of August, 2011. Dated at the City of Lethbridge, Alberta this 5 th day of December, 2011.

R.A. Jerke J.C.Q.B.A. Appearances: Stephanie Wanke Ogilvie LLP for the Applicant Cameron J. Ashmore for the Respondent City of Edmonton Kate L. Hurlburt Darin S. McKinley Emery Jamieson LLP for the Respondent the Composite Assessment Review Board _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice R.A. Jerke _______________________________________________________ 1. The citation line should properly read: Altus Group Limited v. Edmonton (City), 2011 ABQB 760.