Edmonton (City) v. Edmonton Composite Assessment Review Board, 2012 ABQB 439

Court of Queen ’ s Bench of Alberta Citation: Edmonton (City) v. Edmonton Composite Assessment Review Board, 2012 ABQB 439 Date: 20120704 Docket: 1103 00471 Registry : Edmonton Between: The City of Edmonton Applicant and ​ The City of Edmonton Composite Assessment Review Board and Mediplex Western Ltd. Respondents _____________________________________________________ Reasons for Judgment of the Honourable Mister Justice Peter Michalyshyn ______________________________________________________ I. Introduction [ 1 ] The City of Edmonton applies for leave to appeal a decision of the Composite Assessment Review Board (“CARB”). The Respondent Mediplex took no

part in these proceedings. [ 2 ] At issue are 2010 assessments on three property tax rolls relating to paved parking lots. Adjacent to the parking lots are two buildings. One is to the west, the other to the north of the parking lots in question. [ 3 ] Although the evidence could be clearer, it appears the parking lots and building to the west are on the same title and are jointly owned. [ 4 ] Before the CARB, the City and Mediplex contested the meaning of “parcel of land” in s. 1(1)(v)(iii) in the Municipal Government Act RSA 2000 c.

M-26 ( MGA ). [ 5 ] Mediplex argued the parking lots should have been assessed as part of the same “parcel” that includes the building to the west. It argued the value of the parking lots had already been captured in the assessment of that adjacent building. [ 6 ] The City argued each parking lot was an individual “parcel of land” and therefore had to be assessed separately, and at

market value. [ 7 ] In a series of three decisions issued December 9, 2010, the CARB agreed with the City that each of the parking lots needed to be assessed as individual “parcels of land”. The CARB found however, that as argued by Mediplex, the assessment value of each of the parking lots was captured in the value of the adjacent building to the west. As such, the assessments of the parking lots was reduced. [ 8 ] The CARB assessed the parking lots at a “nominal” $500 each. That figure had been suggested by Mediplex. No other apparent basis for it was in evidence.

The lots had been assessed previously at $234,500, $231,500 and $178,500 respectively. [ 9 ] For reasons which follow the application for leave is allowed on the first of three grounds advanced. II. Statutory scheme and case law [ 10 ] The application is brought pursuant to s. 470 of the MG A, which deals with appeals from an assessment review board such as the CARB in this case. [ 11 ] Section 470(5) of the MGA expressly sets out the right of appeal from a decision of a board such as the CARB to the Court of Queen's Bench. Leave to appeal is necessary.

Leave to appeal may be granted if the judge is of the opinion that the appeal: (

a) involves a question of law or jurisdiction, (

b) raises an issue of sufficient importance to merit an appeal, and (

c) stands a reasonable chance of success. [ 12 ] This scheme came into force January 1, 2010. Since then the courts have been kept busy dealing with leave applications. The following reported leave to appeal decisions over the past roughly 21 months are worth noting: Edmonton (City) v. Edmonton (Assessment Review Board) , 2010 ABQB 634 per Germain J. Globexx Properties Ltd. v. Edmonton (City) , 2011 ABQB 464 per Shelley J. Associated Developers Ltd. v. Edmonton (City) , 2011 ABQB 592 per Ross J. Altus Group Ltd. v. Calgary (Composite Assessment Review Board) , 2011 ABQB 739 per Nation J. Edmonton (City) v.

Edmonton Composite Assessment Review Board , 2012 ABQB 154 per Germain J. Edmonton (City) v. Alberta (City of Edmonton Composite Assessment Review Board) , 2012 ABQB 118 per Sulyma J. Edmonton (City) v. Alberta (City of Edmonton Composite Assessment Review Board) , 2012 ABQB 171 per Topolniski J. Canadian Natural Resources Ltd. v. Wood Buffalo (Regional Municipality) , 2012 ABQB 177 per Sulyma J.

[13] A further decision worth noting, although not reported, is Ruppert v. Calgary Assessment Review Board and the City ofCalgary, (November 18, 2010, Action #1001 11405) per Poelman J. [14] A reading of these 10 decisions together reveals certain trends. Most obviously, leave to appeal is seldom given, atleast compared to the usual number of grounds raised. That appears to be most often the case because grounds for appeal do not raisequestions of law or jurisdiction. Leave applications are denied frequently also on the basis of no reasonable chance of success.

Leastonerous appears to be the hurdle of showing the issue is of sufficient importance. [15] The ‘reasonable chance of success’ requirement engages the question of standard of review on questions of law orjurisdiction. Not all of the reported cases mentioned above engage in a standard of review analysis. Those which do – for example thedecisions of Justices Poelman, Ross, and Sulyma – each conclude reasonableness is the appropriate standard. I accept the reasoning ineach of these decisions.

They support that the “jurisprudence has already determined in a satisfactory manner the degree of deference tobe accorded” to the tribunal in question: Dunsmuir v. New Brunswick 2008 SCC 9. In any event, given recent authoritative case law thestandard of reasonableness is presumed when dealing with a tribunal interpreting or applying its home statute: Alberta (Information andPrivacy Commissioner) v.

Alberta Teachers' Association, 2011 SCC 61 at para. 34. [16] Of course a reasonableness standard of review on questions of law or jurisdiction creates a relatively high burden to be metbefore this court for leave to appeal on the ground of reasonable chance of success. [17] Likewise, a high burden now exists around the commonly-argued ground for leave to appeal based on the adequacy of aCARB’s reasons.

The Alberta Teachers’ Association case, together with Newfoundland and Labrador (Treasury Board), 2011 SCC62, settles the law with regard to the appropriate deference to be accorded reasons for such decisions. [18] The Alberta Court of Appeal summarizes this development in the law in Calgary (City) v. Alberta (Municipal GovernmentBoard), 2012 ABCA 13: [14] At the time the reviewing judge issued her decision the law was unsettled as to whether an alleged insufficiency of atribunal’s reasons should be reviewed on a standard of reasonableness or a standard of correctness.

The rationale for review on acorrectness standard is that the obligation to give reasons is an issue of procedural fairness: Clifford v Ontario (Attorney General), 2009ONCA 670 , 2009 ONCA 670, 98 OR (3d) 210, leave to appeal dismissed [2009] SCCA No. 461. [15] The Supreme Court of Canada recently determined that where there are reasons to review (as opposed to a situation where thetribunal gave no reasons) any challenge to the sufficiency of the reasons should be made within the reasonableness analysis:Newfoundland and Labrador Nurses’ Union v Newfoundland and Labrador (Treasury Board), 2011 SCC 62 , 2011 SCC 62.Abella J noted that it would be “an unhelpful elaboration on Baker to suggest that alleged deficiencies or flaws in the reasons fall underthe category of a breach of the duty of procedural fairness and that they are subject to a correctness review”: para 21. [19] In Edmonton (City) v.

Edmonton Composite Assessment Review Board, 2012 ABQB 154, Germain J. interprets the SupremeCourt of Canada authorities as follows: [56] In Newfoundland and Labrador (Treasury Board), Justice Abella comments at para. 14 on how a court should not review theadequacy (or inadequacy) of a tribunal’s reasons without assessment of the entire decision making process and result: [14] Read as a whole, I do not see Dunsmuir as standing for the proposition that the “adequacy” of reasons is a stand-alone basis forquashing a decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one forthe result (Donald J.

M. Brown and John M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf), at § 12:5330 and12:5510). It is a more organic exercise — the reasons must be read together with the outcome and serve the purpose of showing whetherthe result falls within a range of possible outcomes. This, it seems to me, is what the Court was saying in Dunsmuir when it told reviewing courts to look at “the qualities that make a decision reasonable, referring both to theprocess of articulating the reasons and to outcomes” (para. 47). [Emphasis added.]

[57] Further, Justice Abella indicates that a defect in reasons is not an breach of the duty of procedural fairness: para. 21. Any breach of the duty of procedural fairness is a question of law: para. 22. She continues, however, to explain that: “ [b]ut where, as here, there are reasons, there is no such breach. ” [emphasis added.] [58] I conclude the alleged defects to the CARB ’ s June 3 reasons are neither a question of law nor jurisdiction. The CARB was required by MGA, s. 468(1) to provide reasons, and it did so. It met that jurisdictional requirement.

Newfoundland and Labrador (Treasury Board) explains the standard in Dunsmuir v. New Brunswick of transparent, justifiable and intelligible decision making necessarily means looking at all aspects of a decision, including its findings of fact. As such, where a court needs to consider any fact, that review is never purely a question of law. [ 20 ] With these preliminary observations made, I will turn to the grounds for leave to appeal in the case before me. III. Grounds for Leave to Appeal [ 21 ] The City argues the following grounds: 1. The CARB erred in interpreting and/or applying sections 1(1) (v), 284 (l)(

r) and 285 of the MGA , and s. 4 of the Matters Relating to Assessment and Taxation Regulation AR 220/2004 (“ MRAT ”) 2. The CARB erred in making unsupportable and unreasonable findings of fact not supported by the evidence; 3. The CARB erred by failing to provide adequate reasons for its decision. [ 22 ] I will review each ground for leave to appeal through the lens of the three-part test set out in s. 470 . 1. The CARB erred in interpreting and/or applying sections 1(1) (v), 284(1) (

r) and 285 of the MGA , and s. 4 of the Matters Relating to Assessment and Taxation Regulation AR 220/2004 ( “ MRAT ”) a. Error of law or jurisdiction [ 23 ] The relevant provisions of the MGA are as follows:

Interpretation 1(1) In this Act, (v) “parcel of land” means (

I) where there has been a subdivision, any lot or block shown on a plan of subdivision that has been registered in a land titles office;

(ii) where a building affixed to the land that would without special mention be transferred by a transfer of land has been erected on 2 or more lots or blocks shown on a plan of subdivision that has been registered in a land titles office, all those lots or blocks; (iii) a quarter

section of land according to the system of surveys under the Surveys Act or any other area of land described on a certificate of title;

Interpretation provisions for Parts 9 to 12 284(1) In this Part and Parts 10, 11 and 12, (r) “property” means (

I) a parcel of land, (ii) an improvement, or (iii) a parcel of land and the improvements to it; Preparing annual assessments 285 Each municipality must prepare annually an assessment for each property in the municipality, except linear property and the property listed in

section 298. [ 24 ] The relevant part of the MRAT reads: Valuation standard for a parcel of land 4(1) The valuation standard for a parcel of land is (

a) market value, or (

b) if the parcel is used for farming operations, agricultural use value. [ 25 ] The City agrees the CARB accepted that each of the parts of the subject property, while commonly owned, must be assessed as its own “parcel”. The City objects however to the CARB’s failure to address the MRAT requirement that each parcel be valued according to market value. [ 26 ] The threshold question is whether that failure raises a question of law or of mixed law and fact. Topolniski J. in Edmonton (City) v. Alberta (City of Edmonton Composite Assessment Review Board) , 2012 ABQB 171 at para 11 (

d) articulates the test as follows:

The principles governing the distinctions between a question of law and one of mixed fact and law are as described in Alberta (Worker'sCompensation Board) v. Appeals Commission, 2005 ABCA 276 , 2005 ABCA 276 paras 15 to 22: I. An incorrect statement of the legal standard, or test, or an application of incorrect factors in applying the law to the facts is anerror of law. ii. Where there is a discretion involved in applying the law to the facts, the application of the discretion is not a question of law, buta question of mixed law and fact. iii.

However, if a wrong legal principle is used in the application of the law to the facts, or in the exercise of the discretion, there isan error of law. [27] Applying that test, on the face of the CARB’s decisions I am unable to find an incorrect statement of the MRAT legal standardif only because the MRAT is not mentioned at all. Assuming however the MRAT requirement was in its mind, the CARB was obliged toapply the MRAT legal standard of market value assessment to the facts of the case before it.

Put another way, the CARB was required toapply no incorrect legal principle to its application of the MRAT requirement on the facts of the case before it. Whether the CARBcomplied with these requirements is a question of law. b. raises an issue of sufficient importance to merit an appeal [28] Ross, J. at para. 42 of Associated Developers Ltd. v. Edmonton (City) suggests that an issue may be of sufficient importanceto merit an appeal if it is important for jurisprudential purposes. The importance must be determined on an objective scale, not thesubjective importance of the matter to the applicant.

Generally there should be something unsettled about the question, or the decisionshould have wide ranging implications. The issues should not be merely the correction of a situation fact specific to the one case, withoutmore. [29] As noted above, in the decided cases to date, this requirement appears to be the least onerous to overcome. [30] I agree with the City’s position. The question of whether a CARB must assess at market value parcels of landgenerally, and in particular parking lots ‘relating’ to other assessed properties, is of precedential value.

It is a question likely to affect alarge number of properties in this province if not beyond. c. stands a reasonable chance of success [31] The City acknowledges the standard of review will affect the analysis of whether this ground of appeal stands a reasonablechance of success. The standard of review is of course reasonableness.

And as noted, a reasonableness standard on questions of law orjurisdiction creates a relatively high burden to be met for leave to appeal on the ground of reasonable chance of success. [32] That being said, it could not be clearer that here the CARB failed to comply with the legal requirement that it assess each ofthe parking lots in question on a market value basis. The CARB made a finding not of market value but rather of “nominal” value. It wasnot entitled to do so. [33] Put another way, the CARB appears also to have applied an incorrect legal principle to its application of the MRAT marketvalue requirement.

It found the market value of the parking lots was “captured” in the value of the adjoining building. It reasoned that toassess the parking lots themselves at market value would amount to “double-counting”. I am satisfied at least for leave to appealpurposes that the CARB was not entitled at the level of legal principle to adopt this approach. By doing so it effectively side-stepped itsearlier finding that each parcel of the subject property had to be assessed separately. The ‘capture/double-counting’ approach allowed the

CARB effectively to do indirectly what it could not do directly – in the end, it treated the parking lots and adjacent building essentially as one parcel for assessment purposes. [ 34 ] For these reasons I find the City stands a reasonable chance of success on the proposed appeal of this aspect of the CARB’s decision. 2. The CARB erred in making unsupportable and unreasonable findings of fact not supported by the evidence [ 35 ] For purposes of this ground of appeal I will assume, without deciding, that each of the first and third parts of the s. 470 test is met.

That being said, does the ground of “unsupportable and unreasonable findings of fact not supported by the evidence” raise an issue of sufficient importance to merit an appeal? [ 36 ] Again, this appears to be the least onerous element of the three-part test. But it still requires an issue that has both objective importance and precedential value. Now I would not conclude this element of the s. 470 test could never be met on the ground of ‘unreasonable findings of fact’. But I do conclude it is not met here. The alleged ‘unreasonable findings’ are of subjective importance to the City.

It was not argued before me those findings were objectively important. Nor was it argued before me that the question of ‘unreasonable findings’ in this case had any particular precedential value for other cases. 3. The CARB erred by failing to provide adequate reasons for its decision. [ 37 ] Based on the authorities set out above, this ground for leave to appeal fails as no error of law or jurisdiction arises from arguably inadequate reasons but rather – as I have done – the adequacy of reasons is considered as part of the overall reasonableness of the decision of the tribunal. IV.

Conclusion [ 38 ] The Applicant's application for leave to appeal is granted on the first ground only. Heard on the 7 th day of December, 2011 Dated at the City of Edmonton, Alberta this 4 th day of July, 2012

Peter Michalyshyn J.C.Q.B.A. Appearances: Steve J. Lutes City of Edmonton, Law Branch for the Applicant Kate L. Hurlburt Emery Jamieson LLP for the Respondent, Composite Assessment Review Board Darin S. McKinley Emery Jamieson LLP for the Respondent, Composite Assessment Review Board Kelsey J. Drozdowski Bennet Jones LLP for the Respondent, Mediplex Western Ltd.