Edmonton (City) v. Alberta (City of Edmonton Composite Assessment Review Board), 2012 ABQB 118

Court of Queen ’ s Bench of Alberta Citation: Edmonton (City) v. Alberta (City of Edmonton Composite Assessment Review Board), 2012 ABQB 118 Date: 20120223 Docket: 1003 20549 Registry: Edmonton Between: The City of Edmonton Applicant - and - The City of Edmonton Composite Assessment Review Board and Earle M. Jorgenson (Canada) Inc. Respondents _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.A.

Sulyma _______________________________________________________ I Introduction [ 1 ] The City of Edmonton (the City) seeks leave to appeal a decision of the City of Edmonton Composite Assessment Review Board (the ARB) exempting the Respondent’s property from taxation assessment under the Municipal Government Act , R.S.A. 2000, c. M-26 [ MGA ].

Section 291 of the MGA exempts from assessment new improvements, not completed by December 31 of the taxation year, used for manufacturing or processing or for storage of materials manufactured or processed by those improvements. The City argued that the property is an industrial warehouse, not a special purpose manufacturing or processing building.

II Facts [ 2 ] Earle M. Jorgenson (Canada) Inc. (Jorgenson) owns land in Edmonton that contains a warehouse building which holds equipment for pipe cutting. The warehouse building was only 98% complete by December 31, 2009. The City did not issue an occupancy permit for the warehouse until May 10, 2010.

However, the City included the warehouse and other yard improvements in the assessment for 2010. [ 3 ] Jorgenson filed a complaint with the Edmonton Composite Assessment Review Board (ARB), arguing that the warehouse and yard improvements were not assessable under s. 291(2) of the MGA , which exempts improvements used for manufacturing or processing that are not complete by December 31. The assessment of the land itself was not at issue, and the City did not include the equipment inside the warehouse in the assessment. [ 4 ] On November 3, 2010, the ARB conducted a hearing on the Jorgenson property.

At the hearing, the City took the position that the warehouse building was not exempt, pursuant to s. 291(2) , because it was not used for or in connection with a manufacturing or processing operation. The City argued that the exemption was limited to machinery and equipment used for manufacturing or processing.

Jorgenson submitted that the definition of the word “improvement” in s. 291(2) is not limited to machinery and equipment, but includes a structure, and the warehouse is a structure. [ 5 ] On November 8, 2010, the ARB issued a written decision, finding that the warehouse improvement was not assessable according to s. 291(2) . [ 6 ] The City filed an originating application for leave to appeal and judicial review on December 3, 2010. III Issues [ 7 ] The application raises the following issues: 1. Should the Court grant the City leave to appeal? (

A) Does the City raise a question of law or jurisdiction if the grounds of the appeal are that the ARB erred by (

i) misinterpreting sections of the MGA and the Matter Relating to Assessment and Taxation Regulation , Alta. Reg. 220/2004 ( MRAT ), (ii) making a decision not supported by the evidence, (iii) failing to provide adequate reasons, and (iv) making findings of fact not supported by the evidence? (

B) Do the grounds of the appeal have precedential value such that they are of sufficient importance to merit an appeal?

(

C) Do any of the grounds of the appeal have a reasonable chance of success? 2. If the City is not granted leave to appeal, does it still have a right to judicial review? IV Legislation [8] The relevant sections of the MGA and the Regulations are attached in Appendix A. V The Board’s Reasons for Decision [9] The Board’s reasons for decision set out the background of the dispute, the issues, the relevant legislation, the parties’positions, and its findings. It provided the following reasons for its decision. The Board finds that the facility is a processing operation.

C-1, pg. 16 describes the processing operation of the subject property. Also onthis page, it states that the judicial test to be applied in determining whether processing has taken place, is whether there has been achange in the form, appearance or other characteristics of the goods and whether the goods become more marketable. The Board acceptsthat the improvements of the subject property were intended for the processing of materials. The MGA, s. 291(2)(

b) and (

c) state that new improvements intended for manufacturing or processing and not completed or in operationby December 31 of the year prior to the taxation year, must not be assessed. The MGA, s. 284(1)(j)(

I) defines an improvement as a structure. S. 284(1)(

u) defines a structure as a building erected in, on, over, orunder land. Therefore, the Board determines that the subject property was an improvement which was not completed or in operation onDecember 31, 2009 and, therefore, no assessment should have been prepared for the improvement portion of the subject property for the2010 assessment year.

VI Position of the City of Edmonton [10] The City submits that s. 470(5) of the MGA states that leave to appeal should be granted if (1) there is a question of law orjurisdiction (2) of sufficient importance to merit an appeal, and (3) there is a reasonable chance of success. Question of Law or Jurisdiction [11] The City argues that three of its grounds of appeal raise questions of law: 1. Did the ARB misinterpret the MGA and the MRAT? As a question of statutory

interpretation, this is a question of law. 2. Did the ARB made an unsupportable and/or unreasonable decision based on the evidence? The City argues that this raises aquestion of law citing, Canada (Director of Investigation & Research, Competition Act) v. Southam Inc., (SCC),[1997] 1 SCR 748; at paras. 39-41, which holds that a tribunal makes an error of law if it fails to consider evidence it is required by law

to consider. In particular, the City alleges that the ARB failed to use the analytical framework required by the MGA and the MRAT . This failure, it argues, makes it impossible to follow the ARB’s steps of

interpretation. 3. The City also argues that the ARB failed to provide adequate reasons, and that this raises a question of law: McCauley Community League v. Edmonton (City) , 2010 ABCA 215 at para. 11 . [ 12 ] The City also argues that the ARB made unsupportable and unreasonable findings of fact, and that this is a question of jurisdiction: Gerard Developments Ltd. v. Parkland (County) , 2010 ABCA 52 . The City asserts that the ARB’s finding of fact that the warehouse was an improvement used for processing was contrary to the uncontradicted evidence before the ARB.

Sufficient Importance [ 13 ] The City argues that all four grounds of appeal have precedential value for future cases about how certain types of improvements and partially built improvements must be assessed. In addition, these questions will affect a large number of properties across Alberta. Reasonable Chance of Success [ 14 ] According to the City, the appeal has a reasonable chance of success because all four grounds of appeal are subject to a correctness standard of review.

The first three grounds of appeal are questions of law not within the specialized expertise of the decision- maker, and the fourth ground of appeal is a question of jurisdiction. [ 15 ] Even if the questions of law are subject to a reasonableness standard, the City argues the appeal still has a reasonable chance of success. The first ground of the appeal has a reasonable chance of success because the ARB should have applied a purposive analysis to the MGA , and such a purposive analysis does not appear on the face of the written reasons.

The City provides three examples of the ARB’s alleged failure to apply a purposive analysis. First, the ARB should have considered the

definitions of “improvement” and “structure”, but simply found that the “facility was a processing operation.” Second, ss. 291(2)(

b) and 291(2)(

c) apply to different types of improvements, but the ARB found that both sections applied to the improvements on the Jorgenson property. Third, the ARB must consider the definition of “manufacturing” and “processing”. The City argues that although the MGA does not define either term, the MRAT defines “machinery and equipment” as including “manufacturing” and “processing”. I note that the MRAT actually does define “machinery and equipment” as including materials used in either manufacturing or processing. The City also argues that a reasonable

interpretation of the MGA and the MRAT leads to the conclusion that there are different types of improvements, and that some improvements on a parcel of land may be assessable, even if others are not. [ 16 ] The City argues that the second ground of appeal has a reasonable chance of success because the ARB clearly did not consider points of

interpretation required by the MGA . [ 17 ] The third ground of appeal, that the ARB provided inadequate reasons, has a reasonable chance of success, according to the City, because it is not possible to follow the ARB’s reasoning or apply the reasoning to other assessments, the reasons do not disclose findings of fact where there was contradictory evidence, and there is no certainty as to when ss. 291(2)(

b) or 291(2)(

c) will apply. More particularly, the reasons do not consider what improvements were assessed, whether the building is distinguishable from the metal cutting equipment, the distinction between improvements in ss. 291(2)(

b) and 291(2)(c), and do not weigh the evidence. [ 18 ] The City argues that its assertions that the ARB made unsupportable and unreasonable findings of fact have a reasonable chance of success because the uncontested testimonial evidence does not support the finding that the building and the yard improvements fell within the definition of “improvement”. Therefore, finding that the warehouse and yard improvements were “improvements” within the MGA was in the absence of evidence. Judicial Review [ 19 ] If the test for leave to appeal is not satisfied for any of the four grounds, the City argues that it still has the right to judicial

review. According to the City, where there is a statutory right to appeal on questions of law and jurisdiction, judicial review is available for grounds of appeal that are not questions of law or jurisdiction (questions of fact or questions of mixed fact and law). The City submits that, if the test for leave to appeal is not satisfied, the same arguments made in support of the application for leave to appeal also support the City’s right to judicial review. The same four grounds of appeal would be the questions on judicial review. VII Position of Earl M. Jorgenson (Canada) Inc.

Question of Law or Jurisdiction [ 20 ] The Respondent argues that none of the City’s grounds of appeal raise questions of law or jurisdiction. Jorgenson suggests that the City’s first argument is not that the ARB misinterpreted the legislation, but that it misapplied s. 291(2) . Questions of application involve questions of whether a set of facts satisfy a legal test, and are thus questions of mixed law and fact.

According to Jorgenson, leave to appeal should only be granted if the applicant raises questions of pure law. [ 21 ] The ARB’s treatment of evidence raises a question of mixed law and fact, and not a question of pure law or jurisdiction. Moreover, Jorgenson argues that questioning facts or trying to establish new facts is not a proper basis for requesting leave to appeal. [ 22 ] On the issue of the sufficiency of the Board’s reasons, Jorgenson argues that the reasons must be examined in light of the proceedings before the ARB. The hearing was short; the transcript was only 37 pages.

At the hearing, the City took no issue with the fact that the building was incomplete, and that there was machinery and equipment intended for processing in the building. Also, the ARB’s reasons specifically reference the evidence the Board found persuasive. Finally, Jorgenson argues that a tribunal is not required to expressly indicate all the relevant considerations it has taken into account in its decision.

Sufficient Importance [ 23 ] Jorgenson alleges that the ARB’s decision deals with a specific fact context applying to one property for a single year, and therefore this case is not important for jurisprudential purposes. Moreover, issues relating to the assessment of new buildings at manufacturing and processing facilities as of the condition date are well established in Alberta assessment practice. There is no point that needs clarification. Reasonable Chance of Success [ 24 ] Jorgenson argues that the standard of review that the Court would apply to the ARB’s decision would be reasonableness. Dunsmuir v.

New Brunswick , 2008 SCC 9 , states that a reviewing court should determine whether previous case law has satisfactorily ascertained the proper standard of review for the particular category of question.

In this case, Jorgenson argues that courts previously applied a standard of reasonableness to questions of the application of s. 291 of the MGA : Alberta (Minister of Municipal Affairs) v Municipal Government Board , 2005 ABQB 866 , 388 AR 284; Alberta (Minister of Municipal Affairs) v Alberta Oil Sands Pipeline Ltd , 2007 ABQB 652 , 436 A.R. 89; and Alberta (Municipal of Municipal Affairs) v Access Pipeline Inc , 2011 ABQB 144 , 508 A.R. 165. [ 25 ] Even if a correctness standard applies, Jorgenson submits that the City’s appeal does not have a reasonable chance of success. The City’s proposed

interpretation of ss. 291(2)(

b) and 291(2)(

c) suggests that it only applies to machinery and equipment. According to Jorgenson, this would be inconsistent with the purpose of the exception, and with the plain and ordinary language of the legislation. Jorgenson submits that if the legislature intended for the taxation exception for new improvements to be limited to machinery and equipment it would have said so in much clearer terms in the legislation. In addition, the City takes a narrow view of the phrase “used in connection with”. The City proposes that this creates a “necessary and integral” test.

Jorgenson argues that the Alberta Court of Appeal in University of Alberta v. Edmonton (City) , 2005 ABCA 147 , stated that the phrase “used in connection with” does not create a necessary and integral test as that would be too restrictive. Applying a necessary and integral test would capture only a subset of what the legislation intended.

Judicial Review [ 26 ] Jorgenson concedes that courts retain discretion to judicially review decisions of the ARB, despite the amendments to the MGA which grant parties a statutory right to appeal on questions of law or jurisdiction.

Jorgenson suggests that judicial review would be appropriate when the following examples existed, regardless of the right of appeal: arbitrary actions of statutory delegates; abuses of power or excess of jurisdiction by a statutory delegate; questions of vires and nullity; fundamental breaches of fairness; where leave to appeal alone would provide insufficient remedy; and questions of independence, impartiality, or constitution.

However, Jorgenson argues that none of those examples exist in the present case. [ 27 ] Jorgenson recognizes that the provisions on leave to appeal are new, and it remains to be seen whether leave to appeal is an adequate alternative remedy. If there is an adequate alternative remedy the Court ought to refuse to exercise its discretion to judicially review the ARB’s decisions. VIII Position of the City of Edmonton Composite Assessment Review Board [ 28 ] The ARB only addressed the issue of whether the Court should conduct a judicial review, if leave to appeal is not granted.

The ARB argues that courts should not judicially review decisions of administrative tribunals if there is an adequate alternative remedy. In this case, the statutory appeal is an adequate alternative remedy. The Court of Queen’s Bench would be the forum in either case, and the procedures would be similar. [ 29 ] If there is an adequate alternative remedy, judicial review should only occur if there are exceptional circumstances. The ARB argues that in this case there are no exceptional circumstances warranting judicial review. IX Analysis 1.

Should the Court Grant Leave to Appeal [ 30 ] Section 470(5) of the MGA states that the Court may grant leave to appeal on a question of law or jurisdiction that is of sufficient importance to merit an appeal and has a reasonable chance of success. Leave to appeal will only be granted on questions that meet these three criteria. Rather than address each of these criteria for all the questions raised by the City, I will address each question separately to determine whether it meets the requirements for leave to appeal. This was the approach taken by Poelman J. in Ruppert v.

Calgary Assessment Review Board (Calgary) (18 November 2010), 1001-11405 (ABQB). A. Did the ARB err in interpreting ss. 284(1)(j), 284(1)(u), 285, 291, and 298(1)(

z) of the MGA and s. 1 (

j) of the MRAT ? i. Question of law or jurisdiction [ 31 ] The Supreme Court of Canada in Southam, at para 35, discussed the distinctions among questions of law, fact, and mixed law and fact: Briefly stated, questions of law are about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests.

[ 32 ] Only questions of law or jurisdictional questions may be granted leave to appeal. However, if a pure legal question may be extricated from a question of mixed law and fact, leave to appeal should be granted on that pure legal question: Pembina Institute for Appropriate Development v Alberta (Energy Resources Conservation Board) , 2009 ABCA 322 at para 7 . [ 33 ] In McCauley, at para 16, Bielby J.A. held that a dispute over the proper

interpretation of a term in the MGA is a question of law. [ 34 ] On the face of it, the question of whether the ARB misinterpreted sections of the MGA appears to be a question of statutory

interpretation, and therefore a question of law. The essence of the City’s argument is that the ARB failed to apply a purposive analysis when interpreting the MGA and to consider

definitions of terms contained in the sections it applied. These failures, according to the City, resulted in the ARB interpreting the statute incorrectly. Although the misinterpretation necessarily leads to a misapplication of the MGA , the question raised by the City does deal directly with the application of statute to the facts. Therefore, the first question is a question of law. ii. Sufficient Importance [ 35 ] If a question is important for jurisprudential purposes, it may be of sufficient importance to merit an appeal: Omega2 Corp v Edmonton (City) , 2005 ABCA 449 , 24 MPLR (4th) 36 at para 9 .

Importance is judged objectively, not on the importance of the matter to the applicant: 845971 Alberta Ltd. (cob South 40 Shopping Centre) v Grande Prairie (City) (Subdivision and Development Appeal Board) , 2010 ABCA 135 at para 8 . [ 36 ] The City submits that the proper

interpretation of s. 291(2) and the related sections will be important for future cases dealing with how certain types of improvements, and partially built improvements, should be assessed. It submits that there are a large number of properties across Alberta that would be affected. [ 37 ] In contrast, Jorgenson argues that the relevance of the ARB decision is limited to the specific facts in this case. Jorgenson also submits that a predecessor to the ARB, the Alberta Assessment Appeal Board dealt with same issue in Shell Canada Resources Ltd v County of Mountain View No 17 , AAAB 39-83 (30 December 1983).

In that case the Board decided that the word improvements, defined similarly to the current MGA , was not limited to machinery and equipment. [ 38 ] While that decision certainly supports Jorgenson’s argument, it is not sufficient to show a clear and established assessment practice in Alberta. [ 39 ] In Municipal Property Assessment Corp v 1695408 Ontario Ltd. , 2010 ONSC 4025 , the Ontario Supreme Court of Justice held that a question of whether certain activities on a property constituted “manufacturing”, “producing”, or “processing” was not of sufficient importance.

The question was one that could only be answered on a case by case basis, and therefore did not have objective importance. [ 40 ] The question posed by the City in this case is broader. Although the City poses its argument in general terms, arguing that the ARB misinterpreted sections of the MGA , its real issue is that the ARB did not employ a “purposeful” approach to the Act. If it had, the City argues, it would have found that s. 291(2) is limited to machinery and equipment. A decision on this question could certainly affect the application of s. 291(2) to other properties across Alberta.

Therefore, there is sufficient importance to merit an appeal. iii. Reasonable Chance of Success [ 41 ] The standard of review for an issue may impact whether there is a reasonable chance of success. In Dunsmuir v. New Brunswick , 2008 SCC 9 at para. 57 , Bastarache and Lebel JJ. stated that courts need not always engage in an exhaustive analysis of the proper standard of review, and that “[d]eference will usually result where a tribunal is interpreting its own statute or statutes closely connected to its function, with which it will have particular familiarity.” (at para 54).

This analysis was further reinforced in the Supreme Court of Canada’s decision in Alberta (Information and Privacy Commissioner) v. Alberta Teachers' Association, 2011 SCC 61 . There the Court noted (at para 34):

... it is sufficient in these reasons to say that, unless the situation is exceptional, and we have not seen such a situation since Dunsmuir , the

interpretation by the tribunal of "its own statute or statutes closely connected to its function, with which it will have particular familiarity" should be presumed to be a question of statutory

interpretation subject to deference on judicial review. [ 42 ] In this case, the ARB is interpreting the MGA , its own statute, and therefore the standard on the question of whether the ARB misinterpreted sections of the MGA is likely to be subject to a reasonableness standard of review. [ 43 ] The Supreme Court of Canada in Dunsmuir also elaborated on the meaning of “reasonableness”, at para 47: Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result.

Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process.

But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [ 44 ] In order for the City to establish that the Court, on appeal, might find that the ARB misinterpreted the MGA , it must show that the ARB’s

interpretation was not justifiable, transparent, or intelligible, and did not fall within a range of reasonable outcomes. The City has not done so. [ 45 ] In its argument, the City claims that the ARB did not apply a purposive analysis when interpreting the MGA , and provides three examples. The first example is that the ARB found that the “facility was a processing operation” without considering the meaning of “improvement” or “structure” in the MGA . Second, the ARB did not distinguish between the different types of improvements in ss. 291(2) (

b) and 291(2) (c). Third, the ARB did not consider the definition of manufacturing or processing. The City also argued that a reasonable

interpretation would find that there are different types of improvements, and some improvements on a parcel of land will be assessable while, at the same time, others may not be. [ 46 ] However, in its brief reasons, the ARB discusses the statutory

definitions of “improvement” and “structure”, and considers judicial

interpretations of “processing”. The ARB does gloss over the differences between ss. 291(2) (

b) and 291(2) (c), but both sections could apply to the Jorgenson property. Therefore, it was not necessary to distinguish the two exemptions. There is nothing in the decision which suggests that the ARB interpreted the legislation to mean that either all or no improvements are exempt. Finally, nothing remains to suggest that the ARB did not take a purposive approach to the MGA . [ 47 ] As a result, the City’s first ground of appeal has no reasonable chance of success. B. Did the ARB make an unsupportable and/or unreasonable decision based on the evidence? i.

Question of Law or Jurisdiction [ 48 ] In Southam , at paras. 39-41, Iacobucci J. said that a failure to consider evidence that a tribunal is required to consider is an error of law: After all, if a decision-maker says that the correct test requires him or her to consider A, B, C, and D, but in fact the decision-maker considers only A, B, and C, then the outcome is as if he or she had applied a law that required consideration of only A, B, and C. If the correct test requires him or her to consider D as well, then the decision-maker has in effect applied the wrong law, and so has made an error of law.

If the Tribunal did ignore items of evidence that the law requires it to consider, then the Tribunal erred in law. [ 49 ] The City argues that the ARB should have employed an analytical framework that it argues is required by the MGA and MRAT . Yet, there is nothing in either the MGA or the MRAT that requires a specific analytical framework.

If the City is arguing that the analytical framework it proposes is one that is inferentially required by the structure of the Act and the Regulation, it has not identified where that inference is drawn from. [ 50 ] The City argues that the ARB should considered the following: (1) what improvements exist on the Jorgenson property; (2) what improvements were assessed in the 2010 assessment; (3) for each improvement assessed, was it a new improvement used for or in conjunction with a manufacturing or processing operation and not completed before December 31; (4) alternatively, was the improvement a new improvement used for the storage of materials manufactured or processed by improvements referred to in s. 291(2) (

b) and not completed before December 31. For the third and fourth questions, the City argues that the ARB should have considered how the definition of machinery and equipment in the MRAT affects the

interpretation of improvements. [ 51 ] In my view, there is nothing in the Act that compels such a framework for the analysis. Moreover, this statement of the issue is merely another way of saying that the City disagrees with the way in which the ARB applied the facts to the legislation, in other words a question of mixed fact and law. In my view, this is not analogous to the situation described in Southam as ignoring items of evidence it was required to consider. [ 52 ] I therefore deny leave to appeal on this ground, concluding that it is not a question of law or jurisdiction.

If I am wrong, I will also consider the other two tests for leave. ii. Sufficient Importance [ 53 ] It could be helpful for future cases to clarify what the ARB must consider when determining whether improvements are exempt under s. 291(2) . Therefore, there is sufficient importance to merit an appeal on the City’s second ground of appeal. iii. Reasonable Chance of Success [ 54 ] Regardless of the standard of review, the argument that the ARB failed to consider evidence it was required to consider has no reasonable chance of success.

The City states that the MGA and the MRAT required the ARB to consider a particular framework when making a decision. Although a decision that followed the City’s framework would be easy to understand, nothing in the MGA or the MRAT requires the ARB to apply that framework. [ 55 ] The ARB decided that the warehouse and yard improvements fell within the definition of “improvement”, as they were a “structure”.

The ARB also determined that the facility, as a whole, was a processing operation, and that the improvements were used for, or in conjunction with, that processing operation, or were used for storage of materials processed by improvements that were used for or in conjunction with a processing operation. Finally, the ARB determined that improvements were not completed by December 31. This is all ss. 291(2) (

b) and 291(2)(

c) of the MGA required the ARB to consider. [ 56 ] I would also deny leave to appeal on this ground, since there is no reasonable chance of success. C. Did the ARB err by failing to provide adequate reasons? i . Question of Law or Jurisdiction

[ 57 ] In McCauley , at para. 11, Bielby J.A. stated that failing to provide adequate reasons, when a statute requires a tribunal to give reasons, is an error of law. In this case, s. 468 of the MGA requires the ARB to provide reasons for its decision. It would appear, however, that this decision has been, at least, impliedly overruled by decisions of the Supreme Court of Canada, in Newfoundland and Labrador Nurses' Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 and a subsequent decision of the Alberta Court of Appeal, in Calgary (City) v. Alberta (Municipal Government Board), 2012 ABCA 13 .

Both decisions were released after submissions and argument were submitted in this matter, but they both rely directly on the decision in Dunsmuir , a decision referenced by all parties here, and neither decision constitutes a revision of the law, only a clarification. [ 58 ] The Supreme Court of Canada in Newfoundland recently held that the decision in Dunsmuir does not stand for the proposition that the "adequacy" of reasons is a stand-alone basis for quashing a decision, and that the Dunsmuir criteria are met if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes. [ 59 ] The Alberta Court of Appeal in Calgary (City) v.

Alberta (Municipal Government Board) , 2012 ABCA 13 discussed the Newfoundland decision and held that (at para 15) : The Supreme Court of Canada recently determined that where there are reasons to review (as opposed to a situation where the tribunal gave no reasons) any challenge to the sufficiency of the reasons should be made within the reasonableness analysis: Newfoundland and Labrador Nurses' Union v Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 .

Abella J noted that it would be "an unhelpful elaboration on Baker to suggest that alleged deficiencies or flaws in the reasons fall under the category of a breach of the duty of procedural fairness and that they are subject to a correctness review." (para 21.) [ 60 ] There is a slight distinction between McCauley and the most recent Court of Appeal decision. In McCauley, the SDAB was required by s. 687(2) of the MGA to provide reasons, while the MGA in effect at the time of the MGB’s decision in Calgary (City) v.

Alberta (Municipal Government Board) did not require the MGB to give reasons, unless asked to do so (s 505, 1994 cM-26.1 s505; 1998 c24 s52 ). In my view, notwithstanding this distinction, the Supreme Court and recent Court of Appeal decisions are binding and directly on point.

In light of these more recent decisions, the statutory requirement to provide reasons does not render the adequacy of reasons a separate question of law. [ 61 ] I therefore would deny leave to appeal on the basis that the adequacy of reasons does not constitute a separate question of law, reviewable on a separate standard than the overall decision. [ 62 ] If I am wrong, I will consider the other two grounds for leave to appeal. ii. Sufficient Importance [ 63 ] If the ARB did not provide adequate reasons, it would be useful for the Board to receive instructions as what qualifies as adequate.

Therefore, there is sufficient importance to merit an appeal. iii. Reasonable Chance of Success [ 64 ] Given the decision by the Supreme Court of Canada in Newfoundland and Labrador Nurses ’ Union that a reviewing court will apply a standard of reasonableness when considering the adequacy of a tribunal’s reasons, I conclude that there is no reasonable chance of success here.

Abella J., at para. 14, stated that adequacy of reasons is not a stand-alone basis for quashing a decision, but rather the reasons are examined with the outcome to determine whether the result, as a whole, falls within the range of reasonable possibilities: Read as a whole, I do not see Dunsmuir as standing for the proposition that the “adequacy” of reasons is a stand-alone basis for quashing a decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one for the result....

It is a more organic exercise — the reasons must be read together with the outcome and serve the purpose of showing whether the result falls within a range of possible outcomes. This, it seems to me, is what the Court was saying in Dunsmuir when it told

reviewing courts to look at “the qualities that make a decision reasonable, referring both to the process of articulating the reasons and tooutcomes”. [65] In Newfoundland Nurses’ Union, Abella J. also highlighted the degree of deference owed by reviewing courts whenconsidering a decision-maker’s reasons: It is important to emphasize the Court’s endorsement of Professor Dyzenhaus’s observation that the notion of deference to administrativetribunal decision-making requires “a respectful attention to the reasons offered or which could be offered in support of a decision”.

In hiscited article, Professor Dyzenhaus explains how reasonableness applies to reasons as follows: “Reasonable” means here that the reasons do in fact or in principle support the conclusion reached. That is, even if the reasons in factgiven do not seem wholly adequate to support the decision, the court must first seek to supplement them before it seeks to subvertthem.

For if it is right that among the reasons for deference are the appointment of the tribunal and not the court as the front lineadjudicator, the tribunal’s proximity to the dispute, its expertise, etc, then it is also the case that its decision should be presumed to becorrect even if its reasons are in some respects defective. [Emphasis added.] [66] Finally, Abella J., at paras. 16-17, provided some guidance on how reasons might meet the Dunsmuir criteria of“justification, transparency, and intelligibility”: Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would havepreferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis.

A decision-maker isnot required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion (ServiceEmployees’ International Union, Local No. 333 v. Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382,at p. 391). In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it todetermine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met. The fact that there may be an alternative

interpretation of the agreement to that provided by the arbitrator does not inevitably lead to theconclusion that the arbitrator’s decision should be set aside if the decision itself is in the realm of reasonable outcomes. Reviewingjudges should pay “respectful attention” to the decision-maker’s reasons, and be cautious about substituting their own view of the properoutcome by designating certain omissions in the reasons to be fateful. [67] In this case, the decision of the ARB outlines the issues, legislation, and arguments of the parties. The decision does notaddress conflicting evidence in detail.

However, the evidence before the ARB was slim. On the issue of whether the improvements wereexempt under s. 291(2), the complainant stated that the warehouse was used in conjunction with machinery located inside the buildingthat cut metal pipes. The assessor for the City stated that the warehouse had been visited and looked like a typical warehouse. He alsosaid that the machinery could be removed without the building falling down. [68] The ARB’s reasons state that it finds that the facility was, in fact, a processing operation, and they considered the meaning ofprocessing.

The reasons go on to say that the ARB accepted that the improvements were used for the processing of materials. Given thescarcity of evidence, this implies that the ARB accepted the evidence of the complainant and rejected the evidence of the assessor. Thereasons also consider the definition of “improvement” and “structure”, and whether the buildings met this definition. In addition, theARB accepted the evidence that the improvements were not complete by December 31. [69] I find that the reasons and conclusion fall within a range of reasonable outcomes.

It is possible to see how and why the ARBcame to its decision. Therefore, the City’s argument that the ARB’s reasons are inadequate has no reasonable chance of success. D Did the ARB make unsupportable and unreasonable findings of fact not supported by the evidence?

i. Question of Law or Jurisdiction [70] The City argues that Gerard Developments Ltd. v. Parkland (County), 2010 ABCA 52, states that a finding of fact made inthe absence of evidence results in a loss of jurisdiction, and that a finding of fact made contrary to the vast majority of evidence, evenwhere there is some evidence, results in a loss of jurisdiction.

Thus, according to the City, the question of whether the ARB made afinding of fact not supported by the evidence is a question of jurisdiction. [71] Assuming without deciding, that whether the ARB made a finding of fact in the absence of evidence is a question ofjurisdiction, the issue on appeal would be limited to whether there was no evidence or a modicum of evidence in the face of a greatamount of contrary evidence.

Once there is some evidence that supports the finding of fact made by the ARB, the issue becomes aquestion of fact. [72] In its written submissions to the ARB and at the hearing, Jorgenson presented some evidence that the improvements wereused for or in conjunction with a processing operation. The City’s evidence came from the assessor and simply stated that the buildingwas a warehouse, the warehouse was only used to house metal cutting equipment, and the metal cutting equipment could have beenremoved from the warehouse and the warehouse used for another purpose.

While the evidence of Jorgenson is not significant, neither isthe evidence of the City. There is some evidence in favour of either argument. The ARB did not make a finding of fact in the absence ofany evidence, and, therefore, there is no error of jurisdiction. [73] I will consider the other two portions of the test in case I am wrong on whether this is a question of jurisdiction. ii. Sufficient Importance [74] This is a matter of sufficiency of evidence in a particular factual context. It raises no important precedential question. iii.

Reasonable Chance of Success [75] There was some evidence upon which the ARB based its decision; there is no reasonable chance of success that the City couldsucceed on the question of jurisdictional error. [76] Leave to appeal on the City’s fourth ground of appeal is denied. Thus, all the grounds raised by the City in its application forleave to appeal are denied. 2. If the City is not granted leave to appeal, does it still have a right to Judicial Review? [77] Superior courts have constitutionally protected, inherent jurisdiction to review actions and decision of administrative decision-makers.

Justices Bastarache and Lebel in Dunsmuir stated that legislatures cannot remove this jurisdiction: The legislative branch of government cannot remove the judiciary’s power to review actions and decisions of administrative bodies forcompliance with the constitutional capacities of the government. Even a privative clause, which provides a strong indication oflegislative intent, cannot be determinative in this respect (Executors of the Woodward Estate v. Minister of Finance, (SCC), [1973] S.C.R. 120, at p. 127).

The inherent power of superior courts to review administrative action and ensure that it does notexceed its jurisdiction stems from the judicature provisions in ss. 96 to 101 of the Constitution Act, 1867: Crevier. As noted by Beetz J.in U.E.S., Local 298 v. Bibeault, (SCC), [1988] 2 S.C.R. 1048, at p. 1090, “[t]he role of the superior courts inmaintaining the rule of law is so important that it is given constitutional protection.” In short, judicial review is constitutionallyguaranteed in Canada, particularly with regard to the definition and enforcement of jurisdictional limits.

[ 78 ] Therefore, s. 470 of the MGA , which grants the right to seek leave to appeal a decision of the ARB, does not prevent a Court from granting judicial review. [ 79 ] However, judicial review is a discretionary and extraordinary remedy. The Alberta Court of Appeal in KCP Innovative Services v. Alberta (Securities Commission) , 2009 ABCA 102 at para 9 , said that the first step in deciding whether to grant judicial review is determining whether there is an adequate alternative remedy.

The Court continued, and held that where there is “a clear right of appeal which would provide an adequate remedy, only in exceptional circumstances should judicial review be granted.” See also Precision Drilling Corp v Calgary (City), 2011 ABQB 503 at para 7 and 14 . [ 80 ] In KCP , at para 10, the Court also outlined the factors to be considered when determining whether there is an adequate alternative remedy: “the procedure on appeal, the composition and powers of the appeal tribunal, the manner of exercise of its powers, the burden of previous findings, time and cost, as well as the convenience of the alternate remedy and the nature of the error.” [ 81 ] In this case, s. 470 of the MGA grants a statutory right to seek leave to appeal.

The forum would be the same, the Court of Queen’s Bench, regardless of whether the applicant sought leave to appeal or judicial review. The Court could grant substantially the same remedy in either an appeal or judicial review. The procedure to be followed on appeal or judicial review would be similar, except that an appellant would first need to seek leave to appeal. The requirement to seek leave to appeal does not, by itself, render an alternative remedy inadequate: Milner Power Inc. v.

Alberta (Energy and Utilities Board) , 2007 ABCA 265 at para 32 . [ 82 ] However, s. 470 only allows an applicant to seek leave to appeal on questions of law or jurisdiction. There is no ability to appeal questions of fact or mixed law and fact.

Therefore, the statutory appeal procedure is not an adequate alternative remedy if an applicant seeks judicial review on a question of fact or mixed law and fact. [ 83 ] The ARB’s argument that judicial review should only be granted in exceptional circumstances only applies if there is an adequate alternative remedy. [ 84 ] This leads to what appears to be an inefficient process, with applicants filing both an application for leave to appeal and for judicial review, each with different limitation periods and different records production requirements (see Precision Drilling Corp at para 28 ; Associated Developers Ltd v Edmonton (City) , 2011 ABQB 592 at para 19 ).

However, the Court of Appeal has, in a similar situation, noted ( Foster v. Alberta (Transportation and Safety Board ), 2006 ABCA 282 , 397 AR 82 at (para 19 ): 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. [ 85 ] No questions of fact or mixed law and fact were argued before this Court. However, even if they were, the merits of the judicial review should be heard separately from any leave to appeal application. Ross J in Associated Developers Ltd addressed the issue of whether an application for judicial review should be heard at the same time as an application for leave to appeal.

She recognized that parties will often apply for both remedies with the same Originating Application, a process approved by Slatter J in Buckley v. Entz Estate , 2007 ABCA 7 at para 13 . Ross J opined, at para 19, that, due to differences in the record filed for the purposes of leave to appeal and judicial review, the two should not be decided at the same time: I note, however, that the Board raises the question of whether it is appropriate to conduct a judicial review at the same time as the leave application, noting that if judicial review is to be conducted, it must file a return as soon as practicable.

If the leave to appeal and the judicial review are conducted at the same time, a partial record may be produced in the leave application, but a full return must be produced for the judicial review. Thus, the efficiency of a limited record for the leave application would be lost.

I conclude that, as Slatter J noted, cautious parties will file both an application for leave to appeal and judicial review, but the judicial review should generally not be heard until a Court determines whether the issues raised by the Applicant are questions of law or jurisdiction subject to appeal, or questions of fact or mixed fact and law subject to judicial review.

[ 86 ] Therefore, although the City may have a right to judicial review on a question of law or mixed law and fact, the Court cannot decide those questions at this time. X Conclusion [ 87 ] I therefore dismiss the City’s application for leave to appeal, but leave open the possibility that judicial review may be available for questions of fact or mixed fact and law. [ 88 ] The parties may speak to costs within 30 days of this decision. Heard on the 2 nd day of June, 2011. Dated at the City of Edmonton, Alberta this 22 nd day of February, 2012. D.A. Sulyma J.C.Q.B.A.

Appearances: Rebecca Ratti City of Edmonton Law Branch for the Applicant - The City of Edmonton Kate Hurlburt Darin S. McKinley Emery Jamieson for the Respondent - The City of Edmonton Composite Assessment Review Board Gilbert Ludwig Wilson Laycroft for the Respondent - Earle M. Jorgenson (Canada) Inc.

Appendix A 284(1) In this Part and Parts 10, 11 and 12, ... (j) “improvement” means (

i) a structure, (ii) any thing attached or secured to a structure, that would be transferred without special mention by a transfer or sale of the structure, (iii) a designated manufactured home, and (iv) machinery and equipment; ... (u) “structure” means a building or other thing erected or placed in, on, over or under land, whether or not it is so affixed to the land as to become transferred without special mention by a transfer or sale of the land. Preparing Annual Assessments 285 Each municipality must prepare annually an assessment for each property in the municipality, except linear property and the property listed in

Section 298. Rules for assessing improvements 291(1) Unless subsection (2) applies, an assessment must be prepared for an improvement whether or not it is complete or capable of being used for its intended purpose.

(2) No assessment is to be prepared (

a) for linear property that is under construction but not completed on or before October 31, unless it is capable of being used for the transmission of gas, oil or electricity, (

b) for new improvements that are intended to be used for or in connection with a manufacturing or processing operation and are not completed or in operation on or before December 31, or

(

c) for new improvements that are intended to be used for the storage of materials manufactured or processed by the improvements referred to in clause (

d) if the improvements referred to in clause (

b) are not completed or in operation on or before December 31.

(3) For the purposes of subsection (2)(a), (a) “capable of being used”, in respect of linear property, means having the physical capacity to transmit gas, oil or electricity whether or not (

i) there is any gas, oil or electricity to transmit, or (ii) there are any facilities connected to the linear property for the sending or receiving of gas, oil or electricity; (b) “construction”, in respect of linear property, means the building or installation, or both, of linear property, but does not include the commissioning, operation or use of linear property.

(4) For the purposes of subsection (3)(a), linear property that is a pipeline has the physical capacity to transmit gas or oil when pressure testing of the pipeline is successful.

(5) For the purposes of this section, linear property that is a pipeline must be assessed separately and not as a system of pipelines. Non-Assessable Property 298(1) No assessment is to be prepared for the following property: (

z) machinery and equipment, except to the extent prescribed in the regulations. Assessment Review Board Decisions 468(1) Subject to the regulations, an assessment review board must, in writing, render a decision and provide reasons, including any dissenting reasons, (

a) within 30 days from the last day of the hearing, or (

b) before the end of the taxation year to which the complaint that is the subject of the hearing applies, whichever is earlier.

(2) Despite subsection (1), in the case of a complaint about a supplementary assessment notice, an amended assessment notice or any tax notice other than a property tax notice, an assessment review board must render its decision in writing in accordance with the regulations.

Appeal 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.

(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 if the judge is of the opinion that the appeal involves a question of law or jurisdiction of sufficient importance to merit an appeal and has a reasonable chance of success. Decision on Appeal 470.1(1) On the hearing of an appeal, (

a) no evidence other than the evidence that was submitted to the assessment review board may be admitted, but the Court of Queen’s Bench may draw any inferences (

i) that are not inconsistent with the facts expressly found by the assessment review board, and (ii) that are necessary for determining the question of law or the question of jurisdiction, and (

b) the Court may confirm or cancel the decision.

(2) In the event that the Court of Queen’s Bench cancels a decision, the Court must refer the matter back to the assessment review board, and the board must rehear the matter and deal with it in accordance with the opinion of or any direction given by the Court on the question of law or the question of jurisdiction.

(3) No member of the assessment review board is liable for costs by reason of or in respect of an application for leave to appeal or an appeal under this Act.

(4) If the Court of Queen’s Bench finds that the only ground for appeal established is a defect in form or a technical irregularity and that no substantial wrong or miscarriage of justice has occurred, the Court may deny the appeal, confirm the decision of the assessment review board despite the defect or irregularity, and order that the decision takes effect from the time and on the terms that the Court considers proper. The following sections of the Matters Relating to Assessment and Taxation Regulation , Alta.

Reg. 220/2004 [ MRAT ] are also relevant: 1 In this Regulation, (j) “machinery and equipment” means materials, devices, fittings, installations, appliances, apparatus and tanks other than tanks used exclusively for storage, including supporting foundations and footings and any other thing prescribed by the Minister that forms an integral part of an operational unit intended for or used in (

i) manufacturing,

(ii) processing, (iii) the production or transmission by pipeline of natural resources or products or by-products of that production, but not including pipeline that fits within the definition of linear property in section 284(1)(k)(iii) of the Act, (iv) the excavation or transportation of coal or oil sands as defined in the Oil Sands Conservation Act, (

v) a telecommunications system, or (vi) an electric power system other than a micro-generation generating unit as defined in the Micro-Generation Regulation (AR 27/2008 ), whether or not the materials, devices, fittings, installations, appliances, apparatus, tanks, foundations, footings or other things are affixed to land in such a manner that they would be transferred without special mention by a transfer or sale of the land.