Altus Group Limited v. Edmonton (City), 2012 ABQB 289

Court of Queen ’ s Bench of Alberta Citation: Altus Group Limited v. Edmonton (City), 2012 ABQB 289 Date: 20120503 Docket: 1103 06594 Registry: Edmonton Between: Altus Group Limited Applicant - and - The City of Edmonton and Edmonton Assessment Review Board Respondents ______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R. Paul Belzil _______________________________________________________ The Application [ 1 ] Altus Group Limited (Altus) seeks Judicial Review of a decision of the Edmonton Assessment Review Board (CARB) awarding costs against it.

The City of Edmonton (City) filed a brief opposing the position adopted by Altus. Counsel for the CARB filed a brief outlining its position as to its authority to award costs but took no position on the outcome of the application. Factual Background [ 2 ] Altus filed property tax complaints with the CARB for 166 industrial warehouses located in the City of Edmonton. Altus argued that for 88 of these warehouses, an income approach to assessment produced a more reliable estimate of market value.

[ 3 ] Following the first day of the hearing, Altus completely abandoned the income approach argument which had been supported by a large volume of written material comprising approximately 1800 pages. The City prepared extensive materials in response. [ 4 ] Thirty-three of the 88 hearings were based solely on the income approach whereas the remaining 55 proceeded to hearing on other grounds.

Of the 55 hearings, seven assessments were reduced and the balance confirmed. [ 5 ] The City of Edmonton applied for costs and the CARB awarded $18,000 apportioned equally among the 88 roll numbers. [ 6 ] The relevant portions of the costs decision read as follows: The CARB does not find that the actions of the Respondent amount to bad faith. However, whether categorized as negligence or carelessness, or a lack of attention to detail, the result of this massive disclosure of evidence and challenge to the assessment model required the Applicant to prepare a detailed and careful response to it.

In the circumstances, a great deal of this expenditure of time and resources became redundant when the Respondent withdrew its income argument and disclosure at first hearing. Similarly, with a challenge to potentially this many property rolls in its assessment model, the retention of an expert is certainly reasonable, even prudent. Accordingly, in determining a cost award, the CARB includes the expert ’ s invoice of $6,300. In looking at the more discretionary allocations, the CARB gave consideration to three matters.

Firstly, the consequences of the Respondent ’ s abuse of the process were significant, not trivial. Secondly, the imposition of costs under MRAC is relatively new, with limited practical experience by parties of its application. Thirdly, the initial recruiting of the expert and much investment of assessors ’ time may have been done when there were numerous like rolls to be heard. [ 7 ] Altus requested leave to appeal the costs decision. [ 8 ] In a judgment reported at 2011 ABQB 760 , Jerke J. granted leave to appeal on two questions: 1.

Did the CARB err in law or otherwise exceed its jurisdiction in awarding costs in excess of its statutory authority? 2. Did the CARB err in law or otherwise exceed its jurisdiction in finding an abuse of process? [ 9 ] The legislative authority for the awarding of costs in assessment review proceedings is s. 468.1 of the Municipal Government Act , R.S.A. 2000, c. M-26 (as amended) ( Act ) which reads as follows: Costs of proceedings

468.1 A composite assessment review board may, or in the circumstances set out in the regulations must, order that costs of and incidental to any hearing before it be paid by one or more of the parties in the amount specified in the regulations. [ 10 ] Regulation AR 310/2009 , Matters Relating to Assessment Complaints Regulation (MRAC) applies. To date, no regulation has been passed as to when costs must be assessed. [ 11 ] Section 52(1) of MRAC permits any party to apply for costs. [ 12 ] Section 52(2) reads as follows: Costs

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

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

b) whether the party applying for costs incurred additional or unnecessary expenses as a result of an abuse of the complaint process. [ 13 ]

Schedule 3 of MRAC is headed Table of Costs. [ 14 ] The

preamble reads as follows: Where the conduct of the offending party warrants it, a composite assessment review board or the Municipal Government Board may award costs up to the amounts specified in the appropriate column in

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

Part 2 or 3, against the party that unreasonably caused the hearing to proceed. [ 15 ] Three categories are then outlined.

Part 1- Action committed by a party,

Part 2 - Merit Hearing and

Part 3 - Procedural Applications. [ 16 ] Under each part, a series of procedural steps are described and a maximum amount specified which increases with the assessed value. Standard of Review Analysis [ 17 ] In Dunsmuir v. New Brunswick , 2008 SCC 9 , the Supreme Court of Canada significantly revamped administrative law and concluded that there should be two standards of review from administrative decisions; the deferential standard of review of reasonableness and the standard of review of correctness which is not deferential.

[ 18 ] Reasonableness was defined at para. 47: 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 [page221] 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. [ 19 ] Subsequent decisions of the court have emphasized the narrow scope of a correctness standard of review. [ 20 ] In Alberta (Information and Privacy Commissioner) v. Alberta Teachers ’ Association , 2011 SCC 61 , it was held that where an administrative body is applying its own legislation, there is a presumption that the standard of review is reasonableness.

The following passage at para. 39 is instructive: 39 What I propose is, I believe, a natural extension of the approach to simplification set out in Dunsmuir and follows directly from Alliance (para. 26). True questions of jurisdiction are narrow and will be exceptional. When considering a decision of an administrative tribunal interpreting or applying its home statute, it should be presumed that the appropriate standard of review is reasonableness.

As long as the true question of jurisdiction category remains, the party seeking to invoke it must be required to demonstrate why the court should not review a tribunal's

interpretation of its home statute on the deferential standard of reasonableness. [ 21 ] In Nor-Man Regional Health Authority Inc. v.

Manitoba Association of Health Care Professionals , 2011 SCC 59 , the Court reaffirmed the narrow scope of the correctness standard of review and emphasized the importance of a contextual analysis. [ 22 ] Paragraphs 35, 36, 39 and 40 are instructive: 35 An administrative tribunal ’ s decision will be reviewable for correctness if it raises a constitutional issue, a question of “ general law ‘ that is both of central importance to the legal system as a whole and outside the adjudicator ’ s specialized area of expertise ’ ” , or a “ true question of jurisdiction or vires ” .

It will be reviewable for correctness as well if it involves the drawing of jurisdictional lines between two or more competing specialized tribunals ( Dunsmuir , at paras 58-61 ; Smith , at para. 26; Toronto (City) v. C.U.P.E., Local 79 , 2003 SCC 63 , [2003] 3 S.C.R. 77 , at para. 62 , per LeBel J.). 36 The standard of reasonableness, on the other hand, normally prevails where the tribunal ’ s decision raises issues of fact, discretion or policy; involves inextricably intertwined legal and factual issues; or relates to the

interpretation of the tribunal ’ s enabling (or “ home ” ) statute or “ statutes closely connected to its function, with which it will have particular familiarity ” ( Dunsmuir , at paras. 51 and 53-54 ; Smith , at para. 26). 39 Moreover, the second step of the standard of review inquiry mandated by Dunsmuir -- a contextual analysis -- confirms that reasonableness, not correctness, is the appropriate standard of review. 40 In proceeding to a contextual analysis, reviewing courts must remain sensitive to the tension between the rule of law and respect for legislatively endowed administrative bodies ( Dunsmuir , at para. 27 ).

Four non-exhaustive contextual factors have been identified in the jurisprudence to guide courts through this exercise: (1) the presence or absence of a privative clause; (2) the purposes of the tribunal; (3) the nature of the question at issue; and (4) the expertise of the tribunal ( Dunsmuir , at para. 64 ). [ 23 ] Decisions as to costs are clearly within the core function of the CARB and involve only an

interpretation of s. 468.1 of the Act and the relevant portions of MRAC.

[ 24 ] These decisions are entitled to deference and only reviewable on a standard of review of reasonableness. General Award of Costs [ 25 ] The Applicant argues that

Schedule 3 of MRAC must be interpreted to mean that in order to award costs there must be a finding that the conduct of the offending party warrants it or that the hearing did not have a reasonable chance of success. The Applicant ’ s submission focusses on the

preamble to

Schedule 3. [ 26 ] The City and the CARB argue that the jurisdiction to award costs is much broader. [ 27 ] They argue that by virtue of s. 468.1 of the Act , the CARB has been given a broad discretion to award costs not exceeding the amounts prescribed in MRAC and that s. 52(2) of MRAC is also broadly drafted such that the CARB may consider the factors in (

a) and (

b) but it is not restricted to considering any other factors. [ 28 ] Paragraph 2 of the

preamble to

Schedule 3 requires that the CARB make a finding that a hearing was required to determine a matter did not have a reasonable chance of success. [ 29 ] The Applicant argues that the CARB failed to make such a finding whereas the Respondents argue that it did so by implication. [ 30 ] The Supreme Court of Canada recognized that courts must be careful not to impose too rigorous a standard when reviewing the sufficiency of reasons of administrative tribunals in Newfoundland and Labrador Nurses ’ Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , at paras. 12-16 . [ 31 ] The context is important.

The Applicant submitted approximately 1800 pages of material dealing with the income argument which the City responded to.

Prior to cross-examination being completed, the Applicant requested an adjournment and the following morning, completely abandoned the income argument. [ 32 ] While the costs decision does not expressly articulate that the CARB concluded that the hearing had no chance of success on the income issue, that is the clear implication when considered in context. [ 33 ] It is noteworthy that the CARB used this phraseology in its costs decision: . . . whether categorized as negligence or carelessness, or a lack of attention to detail, the result of this massive disclosure of evidence and challenge to the assessment model required the Applicant to prepare a detailed and careful response to it.

In the circumstances, a great deal of this expenditure of time and resources became redundant when the Respondent withdrew its income argument and disclosure at first hearing. [ 34 ] In its costs decision, the CARB used the expression “ abuse of process ” which in context must be read to mean “ abuse of the complaint process ” as that term is referred to in s. 52(2) of MRAC. [ 35 ] While I accept that the concept “ abuse of process ” has a broader legal meaning, I do not accept that in this context the CARB was doing anything more than considering the procedural reality before it, that is, Altus submitted a large volume of material, presented its argument based on the material and then completely abandoned its position shortly after cross-examination commenced after the City had expended considerable resources preparing to rebut an argument which was abandoned.

[ 36 ] In Canada (Canadian Human Rights Commission) v. Canada (Attorney General) , 2001 SCC 53 , (MOWAT) the Supreme Court of Canada reaffirmed that administrative tribunals are generally entitled to deference in dealing with their home laws and the following passage at para. 22 is instructive: . . . administrative tribunals are generally entitled to deference, in respect of the legal

interpretation of their home statutes and laws or legal rules closely connected to them.

On the other hand, our Court has reaffirmed that general questions of law that are both of central importance to the legal system as a whole and outside the adjudicator ’ s specialized area of expertise, must still be reviewed on a standard of correctness, in order to safeguard a basic consistency in the fundamental legal order of our country. [ 37 ] At para. 25 the court recognized that the question of costs is within the core function and exercise of jurisdiction of the tribunal. [ 38 ] The CARB acted reasonably in interpreting s. 468.1 and MRAC to mean that it could award costs against the Applicant in these circumstances and in doing so was acting within its core function and jurisdiction.

On a plain reading, the fact that some assessments were reduced on other grounds is irrelevant to the CARB ’ s jurisdiction to award costs as the authority to award costs is not restricted to situations wherein assessment reviews are unsuccessful. Award of Costs for Out-of-Pocket Expenses [ 39 ] The Applicant argues that the CARB has no jurisdiction to award out-of-pocket expenses as they are not listed in

Schedule 3 of MRAC. [ 40 ] The Respondents argue that s. 468.1 of the Act must be read together with s. 52(2) of MRAC and

Schedule 3 such that the authority to award the cost of reasonable out-of-pocket expenses is included. [ 41 ]

Section 468.1 of the Act refers to “ costs of and incidental to ” a hearing. Costs incidental to a hearing would normally include reasonable out-of-pocket expenses. [ 42 ] Section 52(2)(

b) of MRAC refers to a party incurring “ additional or unnecessary expenses ” which would include reasonable out-of-pocket expenses. [ 43 ] Section 52(4) refers to costs set out in

Schedule 3 which makes no reference to out-of-pocket expenses. [ 44 ] On a plain reading, s. 52(2)(

b) of MRAC clearly contemplates that the term “ costs ” is not synonymous with “ additional or unnecessary expenses ” .

The incurring of these expenses may be used as a factor in awarding costs however. [ 45 ] When all these provisions are read together in a purposive and constructive manner, it would be incongruous if the CARB could consider whether additional or unnecessary expenses were incurred and yet not have the authority to order payment for same if it felt it appropriate to do so in the circumstances. [ 46 ] The CARB acted reasonably in concluding that it could order reimbursement for out-of-pocket expenses in these circumstances and in doing so was acting within its core function and jurisdiction. Conclusion and Order

[ 47 ] In the result, both questions on which Leave to Appeal was granted must be answered in the negative. [ 48 ] The Respondent City is entitled to costs of the Leave Application and this application for Judicial Review. The CARB is not seeking costs. Heard on the 24 th day of April, 2012. Dated at the City of Edmonton, Alberta this 2 nd day of May, 2012. R. Paul Belzil J.C.Q.B.A. Appearances: Stephanie A. Wanke Ogilvie LLP for the Applicant Cameron J. Ashmore City of Edmonton Law Branch for the Respondent, City of Edmonton Kate L. Hurlburt Darin S. McKinley Emery Jamieson LLP for the Composite Assessment Review Board