Canadian Natural Resources Ltd. v. Wood Buffalo (Regional Municipality), 2012 ABQB 177

Court of Queen ’ s Bench of Alberta Citation: Canadian Natural Resources Ltd. v. Wood Buffalo (Regional Municipality), 2012 ABQB 177 Date: 20120314 Docket: 1113 00044, 1113 00090 Registry: Ft. McMurray Between: Canadian Natural Resources Limited Applicant - and - The Regional Municipality of Wood Buffalo, the Regional Municipality of Wood Buffalo Composite Assessment Review Board and the Minister of Justice, Attorney General for Alberta Respondents _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.A.

Sulyma _______________________________________________________ I. INTRODUCTION [ 1 ] The Applicant, Canadian Natural Resources Limited (CNRL), seeks leave to appeal under s. 470 of the Municipal Government Act , RSA 2000, c M-26 [ MGA ], challenging two preliminary decisions of the Regional Municipality of Wood Buffalo Composite Assessment Review Board (“ CARB ”), being CARB 007/2010-P and CARB 027/2010-P.

[ 2 ] Viewed more broadly, this action presents a general challenge to the new legislative scheme implemented under the 2009 amendments of the MGA . These amendments have shifted the responsibility for reviewing municipal tax assessments to locally- constituted assessment review boards and effectively abolished appeals, except on sufficiently important questions of law or jurisdiction. CNRL argues that, given the extensive powers of the review boards, their constitution and administration does not provide sufficient protection from decisions that could be biased in favour of the municipalities.

It also complains that the CARB misinterpreted legislation and incorrectly applied common law principles relating to pleadings and onus. II. FACTS [ 3 ] The present dispute arises from an amended 2010 assessment notice issued by the Regional Municipality of Wood Buffalo (the “ Municipality ”) for machinery and equipment at CNRL’s Horizon Oil Sands Project. On March 1, 2011, the Municipality rendered an assessment notice to CNRL for approximately $2.4 billion.

Four days later, on March 5 th , and without any notice to or input from CNRL, the Municipality issued an amended assessment notice for approximately $3.2 billion. [ 4 ] The March 1 st notice was prepared following five years of reporting work and meetings between CNRL and the Municipality’s industrial assessor. According to CNRL, the Municipality’s assessor has acknowledged that the March 5 notice was not made in accordance with the assessment regulations and that the Municipality had ordered him to issue it.

When CNRL requested details supporting the assessment pursuant to ss. 299 and 300 of the MGA , the Municipality explained that the increase in the assessment was based on “an estimate of a ratio of capital expenditures to assessable cost.” In cross examination, the assessor acknowledged that this was a “rule of thumb” ratio taken from the Oil Sands Development Group Report (“ OSDG ”), and that the OSDG was not legally sanctioned under the regulations for preparing an assessment.

The assessor has not used this “rule of thumb” to adjust the assessments of other industrial facilities. [ 5 ] CNRL challenged the legality of the amended March 5 assessment before the CARB. The parties agreed to deal with a number of preliminary issues first. The CARB held a total of four preliminary hearings. CNRL challenges only two decisions: CARB 007/2010-P and CARB 027/2010-P. III. THE TEST FOR LEAVE TO APPEAL [ 6 ] On January 1, 2010, amendments to the Municipal Government Act came into force, changing the way property assessment complaints are handled in Alberta.

The amendments abolished appeals to the Municipal Government Board for most property assessment matters. In their place, the new Act allows for an appeal to the Court of Queen’s Bench on questions of law and jurisdiction with respect to a decision of an Assessment Review Board. The appellant must seek leave to appeal before he/she will be allowed to proceed. [ 7 ] Subsection 470(5) of the amended MGA provides the test for obtaining leave to appeal, which can be distilled to three main requirements: (

a) the appeal involves a question of law or jurisdiction; (

b) the issue is of sufficient importance to merit an appeal; and (

c) the appeal has a reasonable chance of success. IV. THE IMPUGNED DECISIONS 1. CARB 007/2010-P [ 8 ] A hearing took place before the CARB in September 2010. The CARB heard a limited amount of evidence in relation to preliminary matters only. It did not hear any evidence on the merits of CNRL’s complaint. Nevertheless, CNRL sought a declaration that

the amended assessment was illegal, asking for the original assessment to be reinstated. CNRL’s position was that since the amended assessment was illegal, there was no need for a full hearing on the merits and what it calls “a line-by-line review” of the assessment.

In addition, CNRL argued that the Municipality had failed to reply to CNRL’s Request for Information in accordance with s. 299 of the MGA and was thus precluded by s. 9(4) of the Matters Relating to Assessment and Taxation Regulation , Alta Reg 220/2004 [ MRAT ] from relying on a subsequent report that was not provided to CNRL as part of the s. 299 disclosure. [ 9 ] The CARB did not permit CNRL to argue the question of legality or to call an expert on that point.

However, counsel for CNRL was allowed to cross-examine a witness on issues which the Municipality contends were unrelated to the s. 299 request. [ 10 ] The CARB concluded it did not have jurisdiction to provide declaratory relief, and that it only had jurisdiction to determine the “validity” of the amended assessment in the context of a full merit hearing. The CARB concluded that it could not reinstate a previous assessment if it finds the subsequent assessment to be invalid. The decision about whether to make a change — and the change itself — must rest on evidence.

A complainant must successfully establish that the assessment has not been prepared correctly, otherwise, the CARB’s jurisdiction to make a change is not established. Upon finding that an assessment is incorrect, the CARB must turn its mind to what the correct assessment is. At that point, the complainant has the opportunity to demonstrate what the correct number should be. [ 11 ] The CARB also held that the Municipality had complied with CNRL’s s. 299 request. The Board ruled that s. 299 required the Municipality to provide only the information CNRL asked for.

It also noted that CNRL did not advise the assessor that it considered his response insufficient, nor did it request a compliance review under s. 27.6 of the MRAT . The CARB held that since the Municipality had complied with s. 299, it could rely on the subsequent report in its argument before the CARB. [ 12 ] Finally, the CARB ruled that it had the power to direct the parties to jointly provide a list of issues they seek the CARB to resolve. CNRL does not contest this finding in its Application for leave. 2.

CARB 027/2010-P [ 13 ] At the December 2010 leading to decision 027/2010-P, CNRL argued that the amended assessment was a nullity because the amendments were made outside the statutorily mandated process. CNRL also raised the issue of equitable treatment and sought an order compelling production of information about the treatment of comparable facilities by the Municipality. CNRL’s chief concern was that it was the only taxpayer who was assessed based upon the OSDG report. The Municipality attempted to provide a new list of details to defend the amended assessment.

These details were not provided to CNRL following its ss. 299/300 request. Section 9(4) of the MRAT expressly provides that the CARB must not hear any evidence that was requested by a complainant under ss. 299 and 300 of the MGA , but was not provided. [ 14 ] The CARB declined to consider CNRL’s nullity argument. It held that it was merely an attempt to reintroduce the issue of legality of the amended assessment, a matter the CARB had already dealt with in decision CARB 007/2010-P.

The CARB ruled that it did not have jurisdiction to rehear a matter it had already decided. [ 15 ] The CARB likewise declined to hear CNRL’s equity argument because CNRL did not raise equity as an issue in the original Complaint Form. Although CNRL’s Complaint Form expressly referred to the assessment as “inequitable” in the “Grounds of Appeal” section, the CARB held that CNRL failed to raise equity as a separate issue because “equity” was not included in the list of issues in

Schedule “A”. The Board also noted that none of CNRL’s previous submissions raised equity as an issue. As a result, the CARB held it had no jurisdiction, under s. 9(1) of the MRAT , to hear or grant relief in relation to the equity issue. According to CNRL, this decision prohibited CNRL from calling evidence and questioning the Respondents about the equity of assessments. [ 16 ] Finally, on the issue of onus and burden of proof, the CARB held that each party bears the onus to establish the value which it is seeking to have the CARB find as the correct assessed value.

This is because neither party supports the assessed value given in the amended assessment. CNRL seeks to reduce it to the level of the original assessment; the Municipality seeks to increase it further. [ 17 ] The CARB also made a number of procedural decisions which are not subjects of this leave to appeal application.

[ 18 ] Following the preliminary hearings, the CARB scheduled a 3 week hearing on the merits to commence on May 2, 2011. CNRL applied to this Court for a stay of proceedings. Martin J granted the application, finding that the case involved special circumstances warranting interlocutory intervention in the ongoing CARB process. IV. POSITIONS OF THE PARTIES 1. Canadian Natural Resources Ltd. [ 19 ] CNRL seeks leave to appeal on the following questions: (

a) Legality of the Amended Assessment (

i) Does the CARB have jurisdiction to deal with illegality of an assessment notice and if so what is the effect of a ruling on illegality? (ii) Must an amended assessment be prepared in accordance with the legislative scheme? (iii) Is there a concurrent jurisdiction in the Court to deal with illegality on judicial review and can the Court issue a declaration with respect to the legality of an assessment? (iv) Is an Assessor to prepare assessments free from municipal influence? (

b) Equity (

i) Did the CARB err in its

interpretation of the regulation and its conclusion, as to whether equity was raised in the Complaint Form filed with the CARB? (ii) Did the CARB err in its

interpretation that CNRL is prohibited from calling evidence and questioning with respect to equity of assessments in the context of the appeal? (iii) Is the provincial Complaint Form used to file assessment complaints to be read in a liberal or restrictive manner? (

c) Assessor’s Information Response (

i) What is the intent of sections 299 and 300 of the Municipal Government Act ? (ii) Has the CARB misinterpreted s. 299 and 300 and restricted the meaning of section 9(4) of Alberta Regulation 310/2009? (

d) Onus and Burden of Proof

(

i) Who carries the burden to prove an amendment to an assessment? (ii) Can a Municipality or an Assessor seek an increase in an assessment before a CARB under the new regulations and if so, who carries the burden? (

e) Institutional Independence (

i) Does the structure of the CARB panel satisfy the requirements for institutional independence in the adjudication of the assessment complaint before it? (ii) Does the CARB structure invite institutional bias, resulting in a loss of jurisdiction? [ 20 ] The thrust of CNRL’s argument is that the CARB has committed a number of errors in its handling of its complaints.

Specifically, CNRL submits that the CARB failed to recognize the need to prepare an assessment in accordance with the legislative scheme, wrongly precluded CNRL from calling evidence with respect to equity of assessments, and in general acted contrary to the principles of natural justice. CNRL also raises concerns about the fairness of the process and the CARB’s institutional independence. [ 21 ] CNRL does not address the test for leave to appeal on an issue-by-issue basis. Rather, it provides a generalized argument with respect to the s. 470(5) test, followed by what appears to be an argument on the merits. (

a) Question of Law or Jurisdiction [ 22 ] CNRL submits that this appeal involves

interpretation of a statute, specifically the MGA and the MRAT .

Interpretation of a statute is a question of law. In addition, an allegation of failure to comply with procedural fairness likewise raises a question of law. Finally, it argues that where procedural fairness has been breached, a tribunal’s decision is void, as there has been a loss of jurisdiction. Thus, procedural fairness engages a question of jurisdiction. (

b) Sufficient Importance [ 23 ] CNRL submits that the test for sufficient importance is the importance of the issue for jurisprudential purposes. It argues that since the MGA amendments have completely changed the entire complaint system, the Court’s

interpretation of the issues raised in this appeal will be of fundamental significance to the whole complaint scheme. The

interpretation of taxpayers’ information rights and assurance of fair and impartial hearings are at stake. This concerns all stakeholders and not just CNRL. (

c) Reasonable Chance of Success [ 24 ] CNRL submits that since it met the stringent test for a stay of proceedings before Martin J, reasonable chance of success has already been shown to exist. [ 25 ] In addition, CNRL argues that the relevant standard of review to be applied will inform its prospects for success, and submits that the CARB should not be afforded deference by this Court. First, it notes the CARB has no special expertise and its inexperience and struggle with the new complaint system are demonstrated by its inconsistent decisions. Simultaneously, the courts’ experience in matters of pure statutory

interpretation is superior to that of a tribunal. The relevant statutory provisions carry no technical meaning beyond the “ken of a reviewing court”, and thus less deference is required.

[ 26 ] Next, the CNRL submits that this decision involves a question of law that is of general importance or precedential value, and thus a more searching review is warranted. The questions in this appeal are more law intensive as opposed to fact intensive and will be relied upon by future participants. [ 27 ] In addition to the submissions above, CNRL’s brief also offers an extensive argument on the merits of the matter. I am inclined to consider this argument as going to the “reasonable chance of success” branch of the test for leave. Accordingly, I will set it out below.

Legality of the Amended Assessment [ 28 ] CNRL submits that there is a legislated process for the assessment of machinery and equipment, which was not followed by the Municipality in preparing the amended assessment.

Section 293 of the MGA and s. 9 of the MRAT set out in mandatory language that the assessor must follow the procedures set out in the Alberta Machinery and Equipment Assessment Minister ’s Guidelines and must do so in a fair and equitable manner. Specifically, the Municipality was required to calculate the “included costs” for the valuation of machinery and equipment in accordance with the 2005 Construction Cost Reporting Guide. [ 29 ] Indeed, CNRL argues, the Municipality has admitted before the CARB that the amended assessment did not follow the regulated process.

Further CNRL submits, in cross examination, the industrial assessor Harry Schmidt admitted that the adjustment factor came from reference to an OSDG report. [ 30 ] CNRL submits that the amended assessment falls outside of the legally mandated process because it relied on the OSDG report. The amended assessment also fell outside the confines of section 305(1) of MGA , which authorizes amendments to an existing assessment. Section 305(1) permits an amended assessment if there is an error, omission or misdescription.

The industrial assessor has admitted that he was not aware of any error, omission, or misdescription in the initial assessment. Rather, the amendment was driven by a tax planning study. As a result, CNRL argues, the Municipality acted without jurisdiction. [ 31 ] CNRL relies on Teck-Bullmoose Coal Inc v British Columbia (Commissioner of Mineral Tax) , [2000] BCJ No 1957 (SC) for the proposition that a taxation authority does not enjoy an unfettered right to reassess at whim. While the taxing authority can reassess to correct a mistake, “it [cannot] move the goalposts in the middle of a game” (atpara38).

CNRL contends that this is precisely what the CARB’s ruling permits the Municipality to do. [ 32 ] Finally, CNRL submits that the timing of the amendment and response from the industrial assessor suggest municipal interference in the assessment process, contrary to an assessor’s statutory and common law obligation to act fairly. In addition, CNRL was not given a fair notice of any apparent deficiencies in its cost reporting. Equity [ 33 ] CNRL contends that the CARB’s ruling on equity was “egregious” and suggests that it raises concerns about the fairness of the whole hearing.

CNRL submits that the CARB panel has given inconsistent treatment to the issue of equity, ruling in CARB 027/2010-P that CNRL is not entitled to raise the issue of equity, while earlier noting in CARB 007/2010-P that the fairness and equity of the assessment must be taken into account in deciding on the legality of the assessment. [ 34 ] CNRL submits that this inconsistency renders the hearing process unfair and suggests bias in favour of the Municipality.

CNRL goes on to submit that the errors made by the CARB, especially its refusal to admit evidence on the issue of equity taint the entire proceeding, and a new hearing is required. [ 35 ] CNRL further submits that the assessor did not apply the same “rule of thumb” used to increase CNRL’s assessment to adjust the assessments of other industrial facilities in the area. Hence, the amended assessment was contrary to the fundamental principles of uniformity and impartiality governing municipal taxes: Jonas v Gilbert (1881), 1881 CanLII 36 (SCC) , 5 SCR 356.

As an extension of this argument, CNRL further submits that the assessment was made contrary to the assessor’s statutory and common law duties to be fair and equitable in preparing assessments.

[ 36 ] In response to the CARB’s finding that the issue of equity had not been raised in the Complaint Form, CNRL submits that the use of the word “arbitrary” in its complaint, referring to the nature of the amendment, impliedly brought the concepts of fairness and equity into play. CNRL also contends that equity was raised numerous times in expert evidence. CNRL also points out that its attached

schedule to the Complaint Form actually included a statement which explicitly referred to the amended assessment as “inequitable.” It asserts that the fact that equity was not mentioned under the “list of issues” on the Complaint Form is not fatal. On the contrary, the CARB’s narrow reading of the Complaint Form violated s. 26 of the

Interpretation Act , R.S.A. 2000, c. I-8 by elevating form over substance. It also contradicted the trite principle that pleadings are to be read liberally. Indeed, if the Complaint Form were to be read as narrowly as the CARB panel contemplated, equity could never be a matter before the Board, as “equity” is not one of the potential complaint subjects listed on the Complaint Form. [ 37 ] Finally, CNRL submits that the CARB’s treatment of the equity issue has revealed inherent unfairness in the process and rulings of the Panel.

Through its narrow reading of the Complaint Form, the Panel has effectively frozen CNRL’s ability to bring issues before the board. In the meantime, the Panel permitted the Assessor to re-formulate his justification for the amended assessment in subsequent filings. While the Panel employed an exceptionally narrow reading of s. 9(1) of the MRAT (which precludes raising any issues not identified on the Complaint Form), it did not hold the Assessor the same exacting standard with respect to the prohibition set out in s. 9(4) of the same Regulation.

Section 9(4) prohibits the Municipality from bringing evidence that was not provided to CNRL pursuant to a s. 299 Information Request. Despite this prohibition, the CARB permitted the Municipality to adduce additional post facto justifications for issuing the amended assessment. Assessor ’s Information Response [ 38 ] CNRL submits that the only information disclosed in response to its information request under ss. 299 and 300 of the MGA was an indication that the $0.8 Billion amendment was based upon tax planning factors.

The assessor did not point to any discrepancies in, nor took any issue with, CNRL’s reporting of costs. [ 39 ] CNRL contends that the effect of the assessor’s response in light of s. 9(4) of the MRAT is twofold. First, in the proceeding before the CARB, the assessor is prevented by s. 9(4) from relying on anything, other than the tax planning factors he identified in his response to CNRL’s s.299 information request.

Second, the assessor has the burden of proving that the tax planning study was a correct and legal method of preparing an assessment. [ 40 ] Finally, CNRL argues that taxpayers’ information rights and the assessor’s response to information requests are important issues that warrant this Court’s response, especially given the novelty of the legislative scheme set in place in 2010.

Onus and Burden of Proof [ 41 ] CNRL submits that the legislative scheme of the MGA and the legal principles governing burden of proof both support the proposition that the assessor has the onus to establish the existence of an error in rendering an amended assessment. In general, whoever asserts a proposition bears the burden of proving it.

The assessor’s s. 299 response constitutes exactly that — a proposition that a ratio of capital expenditures to assessable cost forms the proper basis for increasing CNRL’s assessment. [ 42 ] Moreover, in Moses v Agriculture Financial Services Corp Appeal Committee , [2005] AJ No 129 (QB) , Ross J explicitly recognized that where a matter “lies particularly within the knowledge of one of the parties, that party must prove it, whether it be of affirmative or negative character.” CNRL contends that it would be an error to suggest that the burden of proof should lie with CNRL to show that the amended assessment was wrong.

Rather, the assessor has the obligation to show that the original March 1 assessment was in error. This would restore the presumption in favour of the original assessment. [ 43 ] Finally, CNRL submits that the CARB is limited to the issues raised in the pleadings before it. As a result, the Municipality cannot seek to further increase the assessment while it is searching for information to defend an arbitrary amendment. If the CARB finds the amended assessment null and void, there is no appeal from the original assessment, and the CARB does not have the jurisdiction to enter into a line by line review.

Institutional Independence [ 44 ] CNRL submits that there is a heightened requirement for the perception of institutional independence in rural municipalities, where industrial properties often make up a large portion of the municipal tax base. [ 45 ] The test for a reasonable apprehension of bias is whether a reasonable and right-minded person, viewing the matter realistically and practically, would conclude that it is likely that the tribunal would not decide fairly. In determining whether the members of the tribunal are appointed in a manner that satisfies the criteria of independence and impartiality a Court (

i) should have regard to the historical context and (ii) may have regard to how the appointment process works in practice. [ 46 ] CNRL contends that while the CARB enjoys very broad powers, including the power to determine the admissibility of evidence, to order costs, and to change an existing assessment, security of tenure is entirely absent in the empowering legislation. It is left entirely up to the discretion of the appointing municipality, the same body that is liable to lose tax revenue.

Likewise, the provisions of the MGA regarding administration of the CARB are very sparse and leave de facto control over the setting of hearings and the assignment of board members to hearings with the Municipality. [ 47 ] The administrative practice of the CARB does not change the perception of bias raised by the absence of security of tenure. In actual practice, s. 7 of Bylaw 10/003 sets out that the Clerk responsible for the administration of the CARB is appointed by the Chief Administrative Officer of the Municipality.

The Clerk does not report in any way to the boards, only to the Chief Administrative Officer. The Bylaw is silent as to how the Boards are assigned. [ 48 ] In sum, CNRL submits that (

i) there is complete absence of financial security for the members of the CARB, (ii) there is complete absence of security of tenure, and (iii) the CARB members are being asked to adjudicate the interests of the very people to whom they owe their appointments. 2. Regional Municipality of Wood Buffalo [ 49 ] The thrust of the Municipality’s argument is that the questions on appeal are all questions of mixed fact and law, and therefore leave to appeal is unavailable.

On that basis, the Municipality asks this Court to lift the stay of the CARB proceedings and to declare that the balance of the issues raised by CNRL are spent, and seeks costs of this application. [ 50 ] The Municipality submits that the remedy of declaration requested by CNRL is not available in this case. CNRL has provided no authority to support departure from the powers of the Court described in s. 470.1 of the MGA , which do not include the power to declare an assessment null and void .

Section 470.1 clearly states that the Court may only affirm or cancel the CARB’s decision. The MGA provides an adequate alternative to judicial review and thus a declaration should not be granted. [ 51 ] The Municipality disputes many of the facts cited by CNRL. In particular, the Municipality argues that the CARB treated CNRL fairly at the September 2010 hearing. The CARB refused to hear evidence from both sides until a merit-based hearing could be held, not just CNRL.

Moreover, it permitted CNRL to cross-examine a witness on unrelated issues, despite the Municipality’s objections. [ 52 ] The Municipality also disagrees that the original assessment was prepared correctly. The Municipality intends to call evidence that CNRL’s original cost report contained errors and non-permitted deductions when it has an opportunity to deliver an argument on the merits.

In addition, the Municipality states that it had advised the CARB and CNRL that it was seeking to increase the included costs and explained to CNRL where its Cost Report contained errors. [ 53 ] Finally, the Municipality disputes that there was any interference from the municipal council in the preparation of the amended assessment. It submits that the decision to amend the assessment was made by the appointed assessor, Mr. Van Waas.

[ 54 ] The Municipality submits that the questions on which CNRL is seeking leave were not those which the CARB was asked to decide. It points out that s. 470 of MGA provides for an appeal with respect to decisions made by the Board. In light of the CARB’s decisions, the Municipality suggests that the questions should be re-stated as follows: 1. Did the Board err in its

interpretation of s. 467(1)? 2. Did the Board err when it decided that it did not have jurisdiction to make a declaration? 3. Did the Board err when it decided that the word ‘change’ in s. 467(1) allowed it to increase the assessment? 4. Did the Board err when it concluded that each party bears the onus to prove the included cost amount which each party believes is correct? 5.

Did the Board err when it ruled that equity was not raised as an issue on the Complaint Form, and therefore, CNRL was prohibited from advancing evidence and argument on the issue of equity pursuant to s. 9(1) of the Matters Relating to Assessment Complaints Regulation ? 6. Did the Board err when it found that Wood Buffalo complied with the s. 299 request made by CNRL, and therefore, Wood Buffalo was not barred under s. 9(4) of the Matters Relating to Assessment Complaints Regulation from presenting Exhibit R-20 as evidence at the future hearing? 7.

Can leave be sought on the issue of whether there is a reasonable apprehension of bias, either personal bias or institutional bias, when the Board was not asked to rule on this issue? [ 55 ] The Municipality notes that this list largely mirrors the list of issues that was compiled during the CARB hearing and assented to by CNRL. (

a) Question of Law or Jurisdiction [ 56 ] The Respondent Municipality relies on a recent decision of this court in Alberta (Municipal Affairs) v TransCanada Keystone Pipeline Limited Partnership , 2011 ABQB 460 for the proposition that leave to appeal is available under the MGA only if a pure legal question can be extricated from a question of mixed law in fact. The Municipality submits that

interpretation of the MGA and CNRL’s equity argument involve questions of mixed law and fact. [ 57 ] The Municipality submits that the first four issues listed above are related and are all issues of mixed law and fact. The Board’s decision on these four issues involved the application of s. 467(1) of the MGA to the specific factual circumstances. The Board heard both oral and written evidence.

Its decision was made having regard to the factual context of this case. [ 58 ] The Municipality further submits that Issue #5 (whether equity was raised in the Complaint Form) involves application of statutory criteria to a set of facts and, as such, presents a “textbook example” of an issue of mixed law and fact. The question of law cannot be separated from the factual context of the actual Complaint Form in this case. In addition, in the context of property assessment, ‘equity’ has a specific meaning given by ss. 467(3) and 467(4) of the MGA .

As a result, the Municipality contends that this Court should give deference to the Board. [ 59 ] Likewise, the Municipality characterizes Issue #6 as a question of mixed law and fact. During the hearing, the parties adduced

written and oral evidence on this issue, and the CARB’s reasons show that the Board applied the provisions of the legislation to the evidence it had received. [ 60 ] Finally, on issue #7, the Municipality submits that CNRL has waived its right to seek leave to appeal on this issue. MGA provides that an appeal is only available from decisions made by the Board. CNRL has acknowledged that the CARB had not ruled on the issue of bias. In doing so, CNRL has recognized that bias was not part of the decision made by the Board. CNRL is therefore precluded from appealing this issue. (

b) Sufficient Importance [ 61 ] The Municipality submits that it is unnecessary to consider this aspect of the test if the Court determines that an issue of mixed fact and law is involved. In the alternative, the Municipality contends that the issues in this appeal are specific to the facts of this case. Accordingly, the issues are neither jurisprudential nor of fundamental significance to the entire complaint scheme. (

c) Reasonable Chance of Success [ 62 ] The Municipality submits that Martin J’s decision on a stay of proceedings does not assist CNRL, as there is no link between the test for a stay and the test for leave to appeal. [ 63 ] The Municipality, however, agrees with CNRL that reasonable chance of success depends on the applicable standard of review. It relies on an oral decision made on very similar facts by Poelman J. in Ruppert v Calgary Assessment Review Board and City of Calgary , November 18, 2010 (unreported) for the proposition that the CARB’s decision should be reviewed on the standard of reasonableness.

Deference should be afforded with respect to both the facts and the law. [ 64 ] The Municipality submits that a plain reading of the two CARB decisions suggests that: 1. The Board correctly identified the governing legislative provisions; 2. There is no evidence that the Board exceeded its jurisdiction; 3. There is no evidence that the Board misapprehended the facts or considered extraneous facts; and 4.

There is no evidence that the Board misstated the issues before it. [ 65 ] The Municipality contends that there is no reasonable chance of success, as Poelman J., in a very recent decision involving very similar circumstances, held that second-guessing the CARB’s conclusions based on the evidence that was before the CARB in the first instance would go beyond a consideration of questions of law and jurisdiction. [ 66 ] Like CNRL, the Municipality also provides an expanded argument on the merits of the appeal.

As with CNRL, I am inclined to treat these submissions as going to the reasonable chance of success branch of the test for leave. I will summarize these submissions below. Assessment Legislation

[ 67 ] The Municipality submits that CNRL’s complaint falls under s. 460(5) (

c) of the MGA dealing with complaints about assessments. Machinery and equipment are defined as “regulated property” by the MRAT , and are thus subject to special calculation rules that do not take into account the property’s market value. There are only two places in the legislated calculation where the assessor and the CARB can exercise their discretion. All other aspects of the formula are set by the Machinery and Equipment Assessment Minister ’s Guidelines (the Guidelines ) .

In this last aspect, the Municipality concurs with CNRL. [ 68 ] The Municipality further explains that the calculation process involves three steps: 1. Calculation of “Included Costs. ” These are equal to the value of machinery and equipment determined in accordance with the Construction Cost Reporting Guide. 2. Removal of s. 298 costs. The assessor removes the costs associated with items listed in s. 298 of the MGA . No assessment is required for these costs. 3.

Removal of “Excluded Costs. ” The assessor removes certain costs pursuant to the categories of excluded costs listed in the Construction Cost Reporting Guide . [ 69 ] The Municipality submits that the “Included Costs” calculated in Step 1 form the input for the assessment formula. On that basis, it contends that the real issue before the CARB is the determination of the “Included Costs.” In essence, when the CARB considers a change in the assessment, it is asking itself whether or not the amount of “included costs” is correct.

This then necessarily engages an examination of the total construction costs and the claims for excluded costs pursuant to the Construction Cost Reporting Guideline. Section 467(1) [ 70 ] This Argument is a response to CNRL’s submission that the CARB erred in refusing to declare the amended assessment a nullity. The Municipality submits that s. 467(1) of the MGA grants the CARB the power to (

i) change the assessment, or (ii) decide that no change is required, nothing more. The CARB does not have the power to declare an assessment a nullity. The scheme of s. 467(1) is such that if the CARB finds that an assessment was not prepared in accordance with the legislation, the analysis does not stop there. Evidence must then be heard to determine the correct amount of the assessment. Accordingly, the CARB did not err in its

interpretation of s. 467(1) when it held that it would not issue a declaration, but would be prepared to hear evidence on what the correct assessment value should be. [ 71 ] In addition, the Municipality submits that the CARB did not err in its

interpretation of s. 467(1) when it concluded that the word “change” allowed it to increase the amount of assessment. The Board’s ultimate responsibility is to determine the correct assessment, and that may require increasing the assessment. The courts have consistently interpreted the word “change” to be a neutral word implying both an increase and decrease. Onus [ 72 ] The Municipality submits that the Board did not err when it concluded that each party bears the onus to prove its amount.

The onus is on both CNRL and the Respondent, since they both dispute the amount shown on the Amended Assessment. [ 73 ] The Municipality submits that there is no principle that an assessor carries the burden to establish the existence of an error. It argues that the Sommers case relied upon by CNRL in this regard is distinguishable as it involved a prior order by the Local Authorities Board, which required the assessor to assess the land as if it had remained in the County of Parkland.

The City attempted to tax the land at fair market value instead of as a farm unit in breach of this order. [ 74 ] Similarly, the Municipality argues that this case does not warrant a shift in the burden of proof similar to that recognized in

Rendez-Vous Inn Ltd v St Paul (Town) , [1999] AJ No 1428 and Moses v Agriculture Financial Services Corp Appeal Committee , [2005] AJ No 129 . Unlike in Rendez-Vous , the technical data in this case is not solely within the knowledge of the assessor. CNRL is fully aware and is in possession of the information required to determine its claim for excluded costs. In contrast to the situation in Moses , there is no matter that lies particularly within the knowledge of one of the parties. Neither party is seeking to have the Board confirm the Amended Assessment.

Equity [ 75 ] The Municipality submits that the CARB was correct in finding that equity was a new issue. Further, the Municipality submits that CNRL has misconstrued the manner in which equity is achieved for “regulated property”, such as machinery and equipment. [ 76 ] Section 9(1) if the Matters Relating to Assessment Complaints Regulation , Alta Reg 310/2009 clearly states that the CARB has no power to hear any mater in support of an issue that is not identified on the Complaint Form.

As equity was never raised on the Complaint Form, the Board did not err by declining to hear the argument on equity. [ 77 ] The Municipality also submits that the CARB had acted properly in employing a narrow reading of the Complaint Form. This matter is not a motion to strike pleadings where pleadings are to be liberally interpreted. The CARB is not a Court with power to amend pleadings. Moreover, the CARB considered the entire form and concluded that equity had not been raised.

The Municipality argues that this is a finding of fact that ought not to be disturbed. [ 78 ] Turning to the substance of the equity argument, the Respondent submits that the concept of equity for valuation of machinery and equipment does not require comparative valuations of similar properties, as suggested by CNRL. Instead, equity should be determined in accordance with s. 467(4) of the MGA , which provides the CARB with the authority to review assessments of machinery and property, as long as they meet the requirements set out by the regulations.

Under these circumstances, equity is achieved through a consistent and accurate application of the legislation. The equity of the legislation itself is beyond the CARB’s review. The CARB is concerned solely with its application. Section 467(4) codifies this approach. [ 79 ] Finally, the Respondent submits that equity can still be achieved by review of CNRL’s Cost Report for compliance with the legislation. There is no inconsistency or unfairness in the Board’s reasons.

Section 299 [ 80 ] The Respondent Municipality submits that it has provided adequate response to CNRL’s s. 299 request. CNRL took no steps to request further information, nor did it request a compliance review under s. 27.6 of the MRAT , which provides a remedy where a taxpayer considers an information request response to be inadequate. [ 81 ] The CARB did not err in its application of s. 299 of the MGA . The CARB looked to the specific wording of CNRL’s request to determine the extent of the information requested by the company.

It then looked at the Municipality’s response to determine whether it provided the information requested. Finally, the CARB considered whether CNRL’s request generated additional questions that would require a further response. The CARB found that the Municipality had complied with the s. 299 request, and as a result, s. 9(4) of the MRAT was not engaged.

The Municipality contends that this was a proper application of s. 299 . [ 82 ] While CNRL argues that the CARB admitted Exhibit R-20 contrary to s. 9(4) of the MRAT , the Municipality responds that Exhibit R-20 addressed inconsistencies in CNRL’s initial reporting and was submitted in response to CNRL’s witness reports, not in response to the s. 299 request. .

Moreover, the CARB recognized the need to give CNRL adequate time to respond to Exhibit R-20 and granted an extension for CNRL to provide its response. [ 83 ] Finally, with respect to s. 300, the Respondent submits that CNRL has never made a request for information pursuant to s. 300

of the MGA. As a result, this

section is not relevant to this leave to appeal application. Reasonable Apprehension of Bias [84] The Respondent submits that issues of bias were not raised before the CARB and, as a result, cannot be subject of a leave toappeal. In the alternative, the Respondent submits that CNRL’s bias argument does not raise questions of law or jurisdiction and does nothave a reasonable chance of success. [85] The Municipality submits that a question regarding a tribunal’s independence is not a question of law or jurisdiction.

Rather, itrequires this court to apply the legal test for independence to the factual context of the CARB. This is not a review of the situation wherea legal test has been improperly applied; there was no application in the first place. [86] With respect to reasonable chance of success, the Municipality advances a brief argument on the merits. [87] As a preliminary matter, the Respondent addresses the distinction between institutional impartiality and independence.CNRL’s bias argument was limited to institutional independence.

The Municipality contends that the financial impact of the CARB’sdecisions on the Municipality is only relevant to the question of institutional impartiality, not institutional independence. The decisionin Canadian Pacific Ltd v Matsqui Indian Band, (SCC), [1995] 1 SCR 3, 122 DLR (4th) 129, relied upon extensivelyby CNRL, dealt with institutional impartiality only.

As a result, the authority in Canadian Pacific does not assist CNRL. [88] The Municipality agrees with CNRL that the factors of institutional independence in Valente v the Queen, (SCC), [1985] 2 SCR 673, 24 DLR (4th) 161 are relevant to determining the independence of a board. However, relying on CanadianPacific at para 83, it contends that the importance of security of tenure, security of remuneration, and administrative control will varyfrom tribunal to tribunal, depending on (

a) the nature of the tribunal, (

b) the interests at stake, and (

c) other indicia of independence such as oaths of office. [89] The CARB’s decisions do not affect any individual’s ability to engage in a chosen profession, their security, or their freedom.This suggests a relaxed application of the Valente factors: Canadian Pacific at para 83. [90] On security of tenure, the Municipality points out that CNRL’s argument fails to take into account Bylaw 10/003, whichexplicitly prescribes a fixed 2-year term for the CARB’s members.

The Bylaw does not allow for removal of any member by theMunicipality. [91] On security of remuneration, the Municipality submits that it has complied with s. 454.2(1) of the MGA by passing Bylaw10/003, which affixes remuneration by reference to Order in Council 004/2008 and its succeeding legislation. As remuneration iseffectively set by the Government of Alberta, it is free from municipal interference. [92] On administrative control, the Respondent admits the factors pointed out by CNRL but argues that they do not result in a lackof administrative control.

The scheduling of the hearings by the CARB is a collaborative process and occurs with input from counsel forboth sides. Even if sufficient administrative control over the appeal process is lacking, the Respondent submits that the first two Valentefactors justify a finding of sufficient institutional independence.

[ 93 ] Finally, the Municipality provides a response to a potential argument that it may still interfere with the CARB’s independence by amending the Bylaws. The Respondent submits, however, that it must be presumed that the Legislature was aware of this possibility when it gave the Municipality the authority to pass bylaws prescribing the term of office and remuneration for the CARB’s members. It would not be appropriate to impose additional requirements absent from the Legislature’s intent. 3.

Composite Assessment Review Board [Respondent] [ 94 ] The CARB does not take a position with respect to leave to appeal. However, it disputes the propriety of CNRL’s questions, the facts stated by CNRL, and CNRL’s allegations of bias. If this Court grants leave, the CARB requests direction on whether the balance of the questions found in CNRL’s Originating Application are spent. (

a) Nature of the Questions [ 95 ] The CARB submits that CNRL’s questions look more like reference questions, rather than grounds on which its decision could be challenged. It submits that there is no jurisdiction for the Court of Queen’s Bench to act as a reference body under s. 470 of the MGA . [ 96 ] The CARB also draws the court’s attention to an important point concerning the nature of a s. 470 appeal. The issue on appeal is whether the CARB erred in its decisions, not whether the assessor did so. It is the CARB’s role to hear complaints about the actions of the assessor. (

b) Response to CNRL ’s Statement of Facts [ 97 ] The CARB concurs with the Respondent Municipality that its jurisdiction was limited to making a change in an assessment, or refusing to make such a change. [ 98 ] With respect to CNRL’s submissions of fact on the s. 299 request, the CARB points out that CNRL had not made any further requests nor had requested a compliance review under s. 27.6 of the MRAT .

The CARB’s argument effectively mirrors that of the Respondent Municipality. [ 99 ] Finally, with respect to the admission of Exhibit R-20, the CARB states that it had granted CNRL an extension of several weeks to respond to this new evidence. Again, this mirrors the Municipality’s submissions. (

c) The Test for Leave to Appeal [ 100 ] The CARB objects to what it calls CNRL “lumping” all of its questions together in addressing the test for leave. It submits that the Court should examine each question in turn to determine if leave should be granted on each one. If any of the questions involve issues of mixed law and fact, that question fails at that stage, and leave should be denied without further analysis. [ 101 ] The CARB further contends that its decisions involved questions of mixed law and fact and that the appropriate standard of review is reasonableness.

It also points out that even within the category of “questions of law”, there are varying standards of review. Questions involving a tribunal interpreting its own statute will often be subject to deference. The legal precedent suggests that

interpretation of the MGA attracts a standard of reasonableness. [ 102 ] The CARB also points out that both impugned decisions were preliminary in nature. It relies on the authority in Paramount

Energy Operating Corp v Alberta (Energy and Utilities Board), 2008 ABCA 187. [103] Finally, the CARB concurs with the Respondent Municipality that it has no power under the MGA to grant a remedy ofdeclaration. Like the Municipality, the CARB points out that CNRL has failed to provide any authority to support its argument. (

d) Bias [104] The CARB reiterates that CNRL has not raised the issue of bias either before the CARB or in its Originating Application. Itargues that the appropriate procedure was for CNRL to ask the adjudicator to recuse himself. CNRL did not follow this procedure. Inaddition, there is nothing in the materials filed with the Court to support CNRL’s allegations of personal bias. [105] The CARB submits that it is not institutionally biased because the MGA explicitly requires the Municipality to appoint twomembers of the Board.

This was the Legislature’s decision, and it is permissible for the Legislature to decide to allow for an overlap offunctions which, in normal judicial proceedings, would be kept separate (see Brosseau v Alberta Securities Commission, (SCC), [1989] 1 SCR 301). It is the Legislature that determines the degree of independence required of tribunal members. Courtswill not lightly assume that legislators intended to enact procedures that run contrary to the principles of natural justice.

To the extent thatthe overlap of functions is authorized, it will not generally be subject to the doctrine of reasonable apprehension of bias. In addition, thedegree of independence required of tribunal members may be ousted by express statutory language or necessary implication Ocean PortHotel v British Columbia (General Manager, Liquor Control and Licensing Branch) 2001 SCC 52, [2001] 2 S.C.R. 781. V.

ANALYSIS [106] On review, this Court has an inherent power to re-frame the questions raised by the parties: Assessors of Areas #1 and #10 vUniversity of Victoria, 2010 BCSC 133 at para 45; Hopewell Development (Leduc) Inc v Alberta (Municipal Government Board),2009 ABCA 391 at para 8; Northern Sunrise (County) v De Meyer, 2008 ABCA 191 at paras 5, 7. In my view, the numerous issuesraised by the litigants essentially ask the following questions: 1. Did the CARB err in finding that its authority was limited to changing the amount of assessment?

This question addresses theissues raised by CNRL in its statement of issues - Legality of the Amended Assessment. 2. Did the CARB err in finding that CNRL failed to raise equity as an issue in its Complaint Form and was therefore precluded fromraising it in the hearing on the merits? This question addresses the issues raised by CNRL in its statement of issues - Equity. 3. Did the CARB err in finding that the Municipality had complied with CNRL’s s. 299 request? This question addresses the issuesraised by CNRL in its statement of issues – Assessor’s Information Response. 4.

Did the CARB err in finding that each party bears the onus to prove the included cost amount they believe is correct? Thisquestion addresses the issues raised by CNRL in its statement of issues – Onus. 5. Is there a reasonable apprehension of bias raised by the CARB’s structure under the MGA and the Municipality’s by-laws madeunder the MGA? This question addresses the issues raised by CNRL in its statement of issues – Institutional Independence. [107] As discussed above, s. 470(5) of the MGA imposes three requirements for leave to be granted: 1. The appeal must involve a question of law or jurisdiction;

2. The issue must be of sufficient importance to merit an appeal; and 3. The Appeal must have a reasonable chance of success. [108] I agree with the Respondent CARB that I should individually examine each question against these requirements to determine ifleave should be granted on each one. 1. Did the CARB err in finding that its authority was limited to changing the amount of assessment? (

a) Question of Law or Jurisdiction [109] An appeal to this Court is available only on questions of pure law and jurisdiction. If the question is one of fact, or even mixedlaw or fact, the analysis stops there and an application for leave must fail. The rule is strict.

Where a question of mixed fact and law isinvolved, leave to appeal may only be granted if a pure legal question can be extricated: TransCanada Keystone Pipeline LimitedPartnership, at para 6; see also Pembina Institute for Appropriate Development v Alberta (Energy Resources Conservation Board),2009 ABCA 322 at para 7. [110] Thus, characterization of the legal issue at hand is a critical step in the s. 470(5) inquiry. The starting point for thecharacterization analysis is Canada (Director of Investigation and Research) v Southam Inc, (SCC), [1997] 1 SCR748, which provides a concise

summary of the three categories of legal questions at para 35: Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually tookplace between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. [111] Nevertheless, the court in Southam recognized that the distinction between questions of mixed fact and law and pure questionsof law is not always clear: Southam, at para 35; see also Pushpanatham v Canada (Minister of Citizenship and Immigration), (SCC), [1998] 1 SCR 982 at para 37.

Where a question of law is intricately intertwined with a multi-faceted fact pattern,such as in the case of negligence, the question is one of mixed fact and law: Southam, at para 35. On the other hand, where facts areclear and unambiguous and the only question is whether these facts satisfy a specific legal definition (e.g. whether a structure counts as a“house” within the meaning of the Housing Acts), that will be a question of law: William Wade, Administrative Law, 9th ed (Oxford:Oxford University Press, 2004) at 943. [112] Matters of mixed law and fact lie along a spectrum.

Where an error can be attributed to the application of an incorrect standard,a failure to consider a required element of a legal test, or similar error in principle, such an error can be characterized as an error of law:Housen v Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235 at para 36. Where the legal principle is not readily extricable, then the matter isone of mixed law and fact.

The Supreme Court summarized these principles as follows in Southam, at para 37: In short, as the level of generality of the challenged proposition approaches utter particularity, the matter approaches pure application,and hence draws nigh to being an unqualified question of mixed law and fact. [113] Precedential value is also highly relevant. In Pezim v British Columbia (Superintendent of Brokers), (SCC),[1994] 2 SCR 557, the Supreme Court of Canada held that the issue of whether newly acquired information constituted a “materialchange” in the affairs of a company was a question of law.

The Court in Southam summarized its decision in Pezim as follows at para36: To some extent, then, the question resembled one of mixed law and fact. But the question was one of law, in part because the words inquestion were present in a statutory provision and questions of statutory

interpretation are generally questions of law, but also

because the point in controversy was one that might potentially arise in many cases in the future : the argument was about kinds of information and not merely about the particular information that was at issue in that case. The rule on which the British Columbia Securities Commission seemed to rely -- that newly acquired information about the value of assets can constitute a material change -- was a matter of law, because it had the potential to apply widely to many cases . [ Emphasis added. ] [ 114 ] In this case, the issue at hand deals squarely with the

interpretation of s. 467(1) of the MGA , which provides: 467(1) An assessment review board may, with respect to any matter referred to in section 460(5), make a change to an assessment roll or tax roll or decide that no change is required. [ 115 ] As stated in Southam , questions of statutory

interpretation are generally questions of law. In this case, the only issue before CARB was whether it had the power under s. 467(1) of the MGA to do anything other than change the impugned assessment. This is a matter of pure statutory

interpretation. [ 116 ] This question also holds extremely high precedential value. It impliedly includes the question of whether the CARB has the jurisdiction to make a declaration of illegality. The extent of the CARB’s remedial powers under s. 467(1) will be relevant to all complaints that come before it in the future. In line with the reasoning in Pezim , I conclude that it is appropriate to characterize this first question as a question of law. [ 117 ] Alternatively, I am prepared to find that Question 1 is a matter of jurisdiction.

Although the recent Supreme Court of Canada decision in Alberta (Information and Privacy Commissioner) v Alberta Teachers ’ Association , 2011 SCC 61 suggests that true questions of jurisdiction are exceedingly rare, I find that this case presents precisely such a question. True jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter: Dunsmuir v New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190 at para 59 . This is exactly what the CARB has done in interpreting its powers under s. 467(1) of the MGA .

It decided whether it had the power to grant declaratory relief. Thus, the extent of the CARB’s powers can also be characterized as a question of jurisdiction. [ 118 ] As a result, I find that Question 1 satisfies the first requirement for leave to appeal. (

b) Sufficient Importance [ 119 ] An issue is of sufficient importance to merit an appeal if it is important for jurisprudential purposes: Omega2Corporation v Edmonton (City of) , 2005 ABCA 449 at para 9 . Sufficient importance must be determined on an objective scale and not on the basis of the subjective importance of the matter to CNRL: 845971 Alberta Ltd v Grande Prairie (Subdivision and Development Appeal Board) , 2010 ABCA 135 at para 8 ; see also Globexx Properties Ltd v the City of Edmonton , 2011 ABQB 464 . [ 120 ] I have already found in part (

a) above that the extent of CARB’s powers under s. 467(1) raises a question of general importance to the new appeal scheme and that this question has high jurisprudential value. Accordingly, I find that Question 1satisfies the second requirement for leave to appeal. (

c) Reasonable Chance of Success [ 121 ] It is important to keep in mind that merits of an appeal should not be considered on an application for leave: TransCanada Keystone Pipeline Limited Partnership .

[122] The parties agree that selection of the standard of review will inform the reasonable chance of success test: 845971 Alberta Ltd,at para 8; Gendron v Calgary (City), 2009 ABCA 367; TransCanada Keystone Pipeline Limited Partnership, at para 32; Ruppert, at 3,ln 29-31. Although the standard of review applicable to errors of law is normally correctness, the courts have long recognized that not allquestions of law will attract the same standard of review: Toronto (City) v CUPE, Local 79, 2003 SCC 63 at para. 71.

The moredeferential standard of reasonableness will apply where a decision maker is interpreting its own statute or has developed particularexpertise in the area: Dunsmuir, at para 54.

On the other hand, a question of law that is of central importance to the legal system as awhole and outside the specialized area of expertise of the administrative decision maker will always attract a correctness standard:Dunsmuir, at paras 55, 60; see also Dr Q v College of Physicians and Surgeons of British Columbia, 2003 SCC 19 , [2003] 1SCR 226 at para 34. [123] In Dunsmuir, , the Supreme Court set out the modern approach to determining the appropriate standard of review. It involvestwo steps, which, put simply, are: 1.

The Court must examine existing jurisprudence to determine what standard of review has been applied in similar circumstances. 2. If Step 1 proves unfruitful, the Court must apply the factors in Dunsmuir, and Pushpanathan, to determine theappropriate standard of review. [124] Despite the recency of the MGA amendments, this Court has already had the opportunity to address the standard of reviewapplicable to the CARB decisions under the new appeal scheme.

In Ruppert, Poelman J held that the appropriate standard of review forquestions of law was reasonableness, because they involved the tribunal interpreting its own statute and were not central to the legalsystem as a whole or outside the tribunal’s specialized area of expertise. Poelman J also held that the CARB is an expert tribunal for thepurposes of determining appropriate standards of review, as it regularly hears and decides complaints about assessments and has thusacquired significant expertise in this area: Ruppert, at 6, ln 17-20.

Justice Ross agreed with Poelman J in Associated Developers Ltd. v.Edmonton (City), 2011 ABQB 592 at paras 53-55. [125] Even if I did not have the benefit of the decisions in Ruppert and Associated Developers, I would still hold that reasonablenessis the appropriate standard of review, much on the same grounds as Poelman J in Ruppert. The question of law in this case involvesinterpretation of the CARB’s own statute. The question is not central to the legal system as a whole, as it affects only the interests oftaxpayers seeking assessment review before various CARBs.

The latest Supreme Court jurisprudence takes this reasoning even further.The Supreme Court of Canada very recently held that the

interpretation by the tribunal of its own statute or statutes closely connected toits function should be presumed to be a question of statutory

interpretation subject to deference on judicial review: Alberta Teachers’Association, at para 34. In light of this new jurisprudence, I have no doubt that the appropriate standard of review is deference. [126] The decision in Alberta Teachers’ Association, also leaves little doubt as to the standard of review applicable to the question ofjurisdiction.

The Court held at para 34: When considering a decision of an administrative tribunal interpreting or applying its home statute, it should be presumed that theappropriate standard of review is reasonableness. [Emphasis added.] [127] Without engaging in a debate as to whether true questions of jurisdiction still exist, it is clear on the facts of this case that theCARB is interpreting and applying its home statute.

As a result, regardless of whether this question is characterized as a question of lawor jurisdiction, it is appropriate to presume that the appropriate standard of review is reasonableness. [128] The Supreme Court of Canada defines “reasonableness” in Dunsmuir, at para 47 as follows : [R]easonableness 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 the law . [ Emphasis added. ] [ 129 ] Having established reasonableness as the appropriate standard of review, I have no difficulty finding that CNRL has failed to show a reasonable chance of success on Question 1. Section 467(1) states in plain language that the CARB has the power to “make a change” or “decide that no change is required” with respect to an existing assessment. It does not provide for any additional remedies. The CARB’s

interpretation of s. 467(1) confining available remedies to changing an assessment or leaving it as-is was reasonable, and comes within a range of possible, acceptable, defensible outcomes. [ 130 ] CNRL also seeks a decision on whether this Court has concurrent jurisdiction to deal with illegality on judicial review.

In Dunsmuir at para 31 , the Supreme Court held that superior courts always maintain a power to review administrative decisions by virtue of their inherent jurisdiction: The legislative branch of government cannot remove the judiciary’s power to review actions and decisions of administrative bodies for compliance with the constitutional capacities of the government.

Even a privative clause, which provides a strong indication of legislative intent, cannot be determinative in this respect . [ 131 ] In my opinion, this Court’s inherent jurisdiction is sufficiently broad to allow for simultaneous judicial review, notwithstanding the appeal regime provided by the MGA .

However, I am bound by the appellate authority KCP Innovative Services Inc v Alberta (Securities Commission) , 2009 ABCA 102 at para 9 , where the Court 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.” I need not engage in a detailed analysis of whether s. 470 of the MGA provides an adequate alternative remedy. Justice Ross has already performed that analysis in Associated Developers , at paras 21-22, 71, concluding that s. 470 provided an adequate alternative remedy for questions of law.

See also Precision Drilling Corporation v. Calgary (City) , 2011 ABQB 503 at para 34 . [ 132 ] I concur. While a hearing on the merits may not be the most expeditious or cost-effective procedure, it provides an opportunity for both sides to be heard. The process may not provide for a “shortcut” via the remedy of declaration, it may take longer and be more expensive, but the complainant can ultimately secure relief through a change in the assessment amount. Though this process may appear wasteful to CNRL, it nevertheless provides an adequate alternative remedy.

It is not for this Court to second-guess the Legislature’s choice of the complaint process. [ 133 ] In light of my findings above, I deny leave to appeal on Question 1. 2. Did the CARB err in finding that CNRL failed to raise equity as an issue in its Complaint Form and was therefore precluded from raising it in the hearing on the merits? (

a) Question of Law or Jurisdiction [ 134 ] Questions 2 and 3 are similar in that at first blush, they each appear to involve the application of a legal test to the particular facts (in this question, the contents of the Complaint Form), a classic case of mixed fact and law. In my view, however, Question 2 raises a much broader question of law, a question that can be successfully extricated from the mix of fact and law.

That question is whether failure to explicitly identify an issue on the Complaint Form is equivalent to not raising that issue at all. [ 135 ] Phrased this way, the question engages matters of general law on pleadings and evidence. This Court has more experience in adjudicating on matters of general law than the Board. The question also necessarily raises the issue of what is the appropriate form of pleadings before the CARB. As such, it moves away from “utter particularity” referred to in Southam , at para. 37 and becomes a matter of potentially broad application.

These factors support characterizing Question 2 as a question of law.

[136] Alternatively, the CARB’s decision may be characterized as an error that can be attributed to the application of an incorrectstandard. In other words, in interpreting Complaint Forms, the CARB has imposed an unreasonably strict standard upon the taxpayers.Per Housen, at para 36, such an error can be properly characterized as an error of law. (

b) Sufficient Importance [137] Question 2 clearly raises matters of substantial jurisprudential importance. There is a strong need to set a precedent as to whatlevel of particularity is expected of a taxpayer in filling out a Complaint Form. (

c) Reasonable Chance of Success [138] This question rises far beyond the narrow facts of this case. It engages principles of general law with respect to pleadings andevidence. In addition, it does not concern

interpretation of the Board’s home statute or specific procedures. It concerns the constructionof pleadings. As a result, Question 2 presents an issue that is of central importance to the legal system as a whole and outside thespecialized area of expertise of the administrative decision maker. The appropriate standard of review is correctness. [139] The Complaint Form itself is a form prescribed by an enactment.

Section 4 of the complaint form contains a number of “checkboxes”, numbered 1-10, that relate to specific “Matters for a Complaint”. This reads: A complaint to the assessment review board may be about any one of the following matters shown on an assessment notice or on a taxnotice (other than a property tax notice)” 1. the description of the property 6. the type of property 2. the name or mailing address of an 7. the type of an improvement assessed person or taxpayer 8. school support 3. an assessment amount 9. whether the property is assessable 4. an assessment class 10. whether the property or business is 5. an assessment sub-class exempt from taxation. [140]

Section 5 of the Complaint Form is titled “Reason(

s) for Complaint” and contains a small box for text. In this case, CNRLattached a

Schedule setting out its reasons for complaint. [141] Having reviewed CNRL’s Complaint Form and the attached Schedule, and bearing in mind the applicable standard of review, Iconclude that there is a reasonable chance of success on this issue. I agree that the general principle is that pleadings should be readliberally, whether in civil litigation or administrative disputes.

This principle is not limited to applications to strike: see ATCO ElectricLtd v Manning Rural Electrification Association Limited, 2011 ABQB 333 at para 13; Dostie v Royal & Sunalliance InsuranceCompany of Canada, 2004 NBQB 195 at paras 7-8; Non-Marine Underwriters, Lloyd's of London v Scalera, atpara 13 (BCSC). [142] It also comports with the express direction of the

Interpretation Act, RSA 2000, c I-8, which provides: 26(1) When a form is prescribed by or under an enactment, deviations from it not affecting the substance and not calculated to misleaddo not invalidate the form used.

[ 143 ] Hence, the CARB cannot elevate form over substance in interpreting CNRL’s Complaint Form. Although

Schedule “A” to the Complaint Form never lists “equity” as a separate issue, it continuously refers to the amended assessment as “arbitrary.” In addition, CNRL’s

Schedule explicitly refers to the assessment as “inequitable” under the heading “Grounds of Appeal”. [ 144 ] I agree with CNRL that, on a liberal reading, these references impliedly raise equity as an issue. On the totality of the evidence before me, I accept that the substance of CNRL’s Complaint Form raised the issue of equity before the CARB. Denying CNRL an opportunity to raise equity because it was not separately spelled out as an “issue” represents unnecessary formalism and elevates form over substance. [ 145 ] Finally, I would accept CNRL’s argument that the Respondent Municipality’s

interpretation of the Complaint Form would never permit a taxpayer to raise equity as an issue before the CARB.

Section 4 of the Complaint Form permits the complainant to pick “matters” for a complaint by ticking one or more of ten boxes that correspond to specific matters. None of the boxes refer to equity as a separate “matter”. [ 146 ] Again, it may well be that CNRL was not sufficiently clear in identifying equity as an issue in

Schedule “A” to the Complaint Form. However, it is not my role to adjudicate this issue on the merits. Given the standard of review and the legal principles involved, I am satisfied that CNRL has a reasonable chance of success on Question 2. [ 147 ] As a result, I grant leave to appeal on Question 2. 3. Did the CARB err in finding that the Municipality had complied with CNRL ’s s. 299 request? (

a) Question of Law or Jurisdiction [ 148 ] Initially, the question of whether the Municipality complied with CNRL’s information request appears to involve the application of a legal test to highly specific facts. Arguably, all the CARB did was determine whether the Municipality’s response complied with the requirements of s. 299 of the MGA . A question of whether the Board erred in this regard would tend to fall closer to the factual end of the continuum identified in Southam .

It is tempting to characterize it as a question of mixed law and fact. [ 149 ] However, such construction misses the broader issues raised by CNRL’s appeal. Question 3 gives rise to a far more important issue: what kind of a response will generally satisfy the requirements in s. 299 of the MGA ? It can be restated as follows: did the CARB err in finding that the Municipality’s cursory reply satisfied the requirements of s. 299 ? [ 150 ] Restated this way, the question moves much closer towards the legal end of the spectrum in Southam , . It now becomes a matter of statutory

interpretation. The inquiry now focuses on whether the Municipality’s reply, the nature of which is undisputed, satisfies the definition of “sufficient information” in s. 299(1.1) of the MGA . This is a textbook example of a question of law, coincidentally described in Wade’s Administrative Law , at 943. [ 151 ] Finally, the

interpretation of s. 299 has the potential to apply widely to many future cases. A clear understanding of precisely what is required by s. 299 of the MGA would benefit both taxpayers and municipalities who find themselves in similar situations in the future. In line with the authority in Pezim , it is appropriate to characterize Question 3 as a question of law. (

b) Sufficient Importance [ 152 ] In light of my findings in the previous paragraph, it is clear that this question is important for jurisprudential purposes. I am

satisfied that the second branch of the test is met. (

c) Reasonable Chance of Success [ 153 ] As this question involves

interpretation of the CARB’s home statute, there is a presumption that the appropriate standard of review is reasonableness: Alberta Teachers ’ Association , . [ 154 ] Even on the most deferential standard of review, I am not convinced that the CARB’s decision on the s. 299 information request was reasonable. [ 155 ] The thrust of the Municipality’s argument before the CARB was that it has provided what CNRL had asked for. The CARB agreed with the Municipality. [ 156 ] In my view, the CARB’s decision appears to contradict the purpose and express wording of s. 299 .

Section 299 imposes stringent disclosure requirements upon the Municipality: 299(1) An assessed person may ask the municipality, in the manner required by the municipality, to let the assessed person see or receive sufficient information to show how the assessor prepared the assessment of that person’s property.

(1.1) For the purposes of subsection (1), “ sufficient information ” in respect of a person’s property must include (

a) all documents, records and other information in respect of that property that the assessor has in the assessor’s possession or under the assessor’s control, (

b) the key factors, components and variables of the valuation model applied in preparing the assessment of the property, and (

c) any other information prescribed or otherwise described in the regulations.

(2) The municipality must , in accordance with the regulations, comply with a request under subsection (1). [ Emphasis added. ] [ 157 ] The intent of s. 299 is clear: it is designed to facilitate disclosure of all relevant information to the taxpayer so as to avoid “trial by ambush” before the CARB. The disclosure provisions are extremely broad. They effectively require a full report. The Municipality must deliver or provide access to all information relevant to the assessment calculation, not just that requested by the taxpayer.

If it were as the CARB says, the taxpayer would forever be caught in a vicious circle, where it would not have access to the information it never knew existed because it did not specifically request that information in the first place. Not only would this situation be absurd, it would also effectively negate the taxpayer’s fundamental right to know the case against them. The words and intent of s. 299 cannot reasonably support such construction. [ 158 ] I pause to note that I am not making any conclusive findings on the merits of CNRL’s argument.

The Respondents raise a number of sound arguments, including the argument that s. 299 only catches the information the Municipality has at the time of the s. 299 request. However, it is not my function to weigh the arguments on their merits. I only need to find that CNRL has a reasonable chance of success. In light of my findings above, I am satisfied that this is the case. Question 3 thus fulfills the third requirement for leave to appeal.

[159] As a result, I grant leave to appeal on Question 3. 4. Did the CARB err in finding that each party bears the onus to prove the included cost amount they believe is correct? (

a) Question of Law or Jurisdiction [160] The issue of who bears the onus is without a doubt a question of law: R v Vandenberg, 2010 ABQB 261at para 10; PolishAlliance of Canada v Polish Association of Toronto, 2010 ONSC 5250 at para 19; United Food and Commercial Workers, Local 1400v Westfair Foods Ltd, 2005 SKQB 187 at para 27; TimberWest Forest Corp (Trustee of) v Schmidt, 2002 BCSC 831 at para 25. I findthat Question 4 easily satisfies the first requirement for leave to appeal. (

b) Sufficient Importance [161] The question of who bears the onus to prove the correct amount of assessment carries immense jurisprudential value. Onceconclusively resolved by this Court, it will affect the practice and procedure of every proceeding before every CARB in this Province. Ifind that Question 4 satisfies the second requirement for leave to appeal. (

c) Reasonable Chance of Success [162] In its decision CARB 027-2010/P, the CARB resolved the issue of onus by looking at s. 467(1) of the MGA. I agree with theBoard that interpreting of s. 467(1) is central to a proper determination of where the onus falls. As the answer turns on the

interpretationof the CARB’s home statute, the appropriate standard of review is reasonableness: Alberta Teachers’ Association, . [163] I have little difficulty concluding that CNRL has established a reasonable chance of success on this issue. As a starting point, Iagree with CNRL that a party who asserts a proposition bears the burden of proving it: Sopinka J et al. The Law of Evidence in Canada,2d ed (Toronto: Butterworths, 1999) at 57-59, 63. Since CNRL is seeking to establish a lower assessment amount as correct, thisprinciple would suggest that it has the burden to prove that number.

At the same time, I am not convinced by CNRL’s argument that theMunicipality’s s. 299 response can be characterized as asserting a proposition which the Municipality

[…]