Globexx Properties Inc. v Edmonton (City), 2012 ABQB 651

Court of Queen ’ s Bench of Alberta Citation: Globexx Properties Inc. v Edmonton (City), 2012 ABQB 651 Date: 20121022 Docket: 1003 20592 Registry : Edmonton Between: Globexx Properties Inc. Appellant and ​ The City of Edmonton Respondent _____________________________________________________ Reasons for Judgment of the Honourable Mister Justice Peter Michalyshyn ______________________________________________________ I. Introduction [ 1 ] Globexx Properties Inc. appeals a decision of the Composite Appeal Review Board (“CARB”) pursuant to leave granted at 2011 ABQB 464 .

For reasons which follow the appeal is dismissed. II. Background [ 2 ] As outlined in the reasons for leave, at issue is a 2010 property tax assessment Globexx says is too high. [ 3 ] The appeal is brought pursuant to s. 470 of the Municipal Government Act RSA 2000 c. M-26 ( “MGA ”) , which deals with appeals from an assessment review board such as the CARB in this case. [ 4 ] 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. [ 5 ] The parties disagree just on what leave was granted. As such, I will begin by setting out the leave decision analysis and

conclusion in its entirety: Analysis [58] It is clear that the CARB was aware that the MGB had reduced the 2009 assessment. It also appears that it was aware that the properties put forward by the City as comparable to the Property in 2009, and which had been before the MGB and accepted by it as comparable at the appeal, had all decreased in value for the 2010 assessment year. The Property, however, increased almost 13%. However, the CARB accepted new comparables submitted by the City in support of its 2010 assessment of the Property. The effect of doing so was to ignore the effect of the successful 2009 appeal.

I consider that the ability (or not) of a municipality and a CARB to ignore a successful appeal (the effect of which was to direct the City to place a revised assessment on the Property which would then become the starting point for the 2010 assessment) is a question of law. [59] I am also not convinced by the City’s argument that, because there is a new assessment each year, the City is entitled to disregard the effect of a successful appeal of the previous year’s assessment. To the contrary, this is a mass appraisal system which is legislated under the MGA. Each property is not individually assessed each year.

In a mass appraisal system the City starts with the previous year’s assessment as its base and then applies various factors (derived from its analysis of market data collected over the intervening year) as appropriate to particular properties. [60] It is an underlying and overriding principle of assessment law that similar properties be treated equitably.

Since all of the comparables that the City argued were similar to the subject in 2009 experienced a reduction in the neighbourhood of 11%, the only explanation for the increase in the subject’s assessment in 2010 was that, as suggested by Globexx, the City applied the factors to the wrong starting point.

I am satisfied that a failure to properly apply a legislated regime, mass appraisal (in this case by starting with an incorrect value when applying the factors used to reassess a property in a subsequent year) constitutes a question of law. [61] I am further satisfied that both of these questions are of sufficient importance and have precedential value for future cases. I am satisfied that they have a reasonable chance of success. [62] In regards to the Maguire case, no issue of law is raised merely because the entire decision was not disclosed.

Globexx was aware that the City would be relying on the decision, and could have asked for the full decision. [63] In my view, however, the CARB’s reliance on Maguire does raise an issue of law. In Southam, the Supreme Court of Canada defined an issue of law as questions about what the correct legal test is (para. 35). The CARB held that Maguire decision set out the test for whether the previous year’s assessment was relevant, noting that it held that “each assessment is independent of the previous years’ assessment”.

However, the Maguire decision found that the complainant had not met its evidentiary onus, and it was within that context that the assessment review board made its comments regarding the previous year’s assessment. In keeping with my earlier analysis of the appropriate test in a mass appraisal system, this raises a question of law. Conclusions [64] This leave application has two aspects. The first is related to procedural issues that arise because of the amendments to the MGA.

I have rejected the City’s position that it was necessary for the applicant to provide the entire record for the purposes of this leave application. What is required to satisfy the onus on an applicant in a leave application will be determined by the nature of the grounds of appeal and the specifics of each case.

Furthermore, such a requirement is at odds with the legislation, which does not require the entire record until after leave is granted and the matter proceeds to an appeal hearing. [65] While it will always be necessary to review some of the record in relation to a leave application, the extent of such review will vary. The applicant must put before the Court only that which is necessary to meet the burden of proving that there is an arguable question of law with a reasonable chance of success. Sometimes that burden may be satisfied solely by a review of the decision which is under appeal.

In other cases it may be necessary to review significant portions of the record to meet this burden. Rather than relying on affidavits deposed by lawyers who appeared at the assessment review board, the better approach is to seek the materials relevant to the leave application from the board under s. 470(4).

[66] Moreover, it must be remembered that this is a two stage process. The leave application is not the hearing of the appeal. A review to the extent suggested by the City in this particular case will amount to a hearing of the appeal on its merits. Doing so would be inefficient and duplicative. [67] The second aspect of this application relates to the specifics of the issues raised by the facts of this case. The issues raised by Globexx relate to the requirements of municipalities and CARBs to follow the directions of appellate bodies, as well as the application of a legislated assessment regime.

Both are questions of law, the determination of which may be of significant precedential value. [68] Having been satisfied that the issues raised by Globexx are questions of law of sufficient importance to merit an appeal and that such appeal has a reasonable chance of success, I hereby grant leave to Globexx to appeal the decision. [ 6 ] The parties distill the issues on appeal differently.

While I find the City’s characterization is closer to the mark, I have modified it slightly, more in the nature of clarification, as follows: Did the CARB err in refusing to be bound by the MGB’s 2009 decision, (the effect of which was to create a new starting point for mass appraisal)?

Did the CARB err in failing to apply the legislated standard, mass appraisal (by starting with an incorrect value when applying the factors used to reassess a property in a subsequent year)? [ 7 ] Globexx misses the mark when it argues leave to appeal was given on the following additional questions: “Did the City of Edmonton use the correct starting point for The Lands when applying factors to such starting point to arrive at the 2010 assessed value of The Lands?” “Did the 2010 assessment of The Lands reflect typical market conditions for properties similar to The Lands?” Did the City of Edmonton use properties similar to The Lands to arrive at the 2010 assessed values?” [ 8 ] Each of these suggested grounds for appeal raise questions of fact which are immune from appeal.

More important, they raise issues upon which leave was clearly not given. [ 9 ] At the end of the day, the essence of the appeal is as follows: (

a) What impact does a 2009 MGB decision have on a 2010 CARB assessment? (

b) Does the legislated standard of mass appraisal require, as a starting point, a prior year’s assessment? III. Analysis

Standard of review [ 10 ] The statutory scheme relevant to this appeal came into force January 1, 2010. Since then a great many leave applications have been heard and decided: see Edmonton (City) v. Edmonton Composite Assessment Review Board , 2012 ABQB 439 ; and Edmonton East (Capilano) Shopping Centres Limited (AEC International Inc.) v. Edmonton (City) , 2012 ABQB 445 . [ 11 ] As noted at Edmonton (City) v. Edmonton Composite Assessment Review Board , 2012 ABQB 439 , n ot all of the reported cases engage in a standard of review analysis. Those which do conclude reasonableness is the appropriate standard.

Nothing in the current appeal persuades me to conclude otherwise. [ 12 ] The City also advocates for a reasonableness standard of review. Globexx on the other hand betrays a misunderstanding of the exercise of defining the standard of review in that it advocates a standard of both correctness and reasonableness. The merits [ 13 ] As a starting point, I agree with the City that Globexx has offered no authority for any of grounds before me, other than to rely on the conclusions reached by the very court giving leave to appeal.

And while leave of course was given, with the greatest of respect for reasons which follow I am unable to agree that the points on appeal favour Globexx’s position. [ 14 ] I will then turn to the merits of the appeal. (

a) What impact does a 2009 MGB decision have on a 2010 CARB assessment? [ 15 ] Globexx argues the City failed to use the right starting point – being the 2009 MGB assessment – to apply various factors to the mass appraisal approach to arrive at a 2010 assessment. [ 16 ] The City correctly sums up Globexx’s “...main argument ... that the City should not have been able to provide comparables that were different than what was provided to the MGB in the previous year.” [ 17 ] The City argues before me the leave to appeal decision on this point was in error.

The City points to the lack of any authority offered by the leave to appeal court for the ‘starting point’ proposition. As noted, Globexx offers no further assistance. [ 18 ] On the other hand, the City offers compelling contrary authority, for example at paragraphs 26-31 of its written submissions and authorities mentioned therein, all of which support the City’s proposition that a prior year’s decision does not create any kind of “starting point” or “base” for the following year’s assessment.

These written submissions and authorities are relevant also to the second ground for appeal. [ 19 ] The City also correctly cites Ruppert v. The City of Calgary (unreported, Action No. 1001 11405, per Poelman J.) and the legislative framework currently in place both of which speak directly against Globexx’s position that the MGB decision somehow binds the CARB. [ 20 ] None of the City’s arguments or authorities were effectively challenged by Globexx in the hearing or materials before this court.

[ 21 ] The CARB committed no error by accepting 2010 comparables that persuaded it to arrive at an assessment higher than the 2009 MGB, based on 2009 comparables. Globexx did not challenge the CARB’s decision on the basis it failed to take into account the 2009 facts, or its consideration of the new 2010 comparables.

Nor could Globexx challenge those findings, on any kind of ‘unreasonableness’ standard, as the CARB’s reasons, at pp. 3-4 under the heading Reason for the Decision, could not be clearer that it took the 2009 and 2010 comparables and indeed all of Globexx’s arguments now raised on appeal, into account in reaching its 2010 assessment. [ 22 ] Based on the materials and argument before me the appeal on the first ground is dismissed. (

b) Does the legislated standard of mass appraisal require, as a starting point, a prior year ’s assessment? [ 23 ] This second ground is related to the first. Once again, Globexx does little more than rely on the leave to appeal decision, offering no further authority and failing effectively to answer the respondent City’s submissions and authorities. [ 24 ] All of these submissions and authorities before me speak against the conclusion the mass appraisal approach requires any prior-year starting point. Globexx offers no authority other than the comments on leave to appeal. IV.

Conclusion [ 25 ] While I do not question the decision giving leave to appeal, I conclude that in the appeal that the respondent City’s position prevails. [ 26 ] On the authorities argued before me, the CARB was neither bound by nor under any obligation to use the MGB’s 2009 decision as a “starting point”. [ 27 ] There is nothing in the record that leads me to conclude the CARB misapplied the mass appraisal approach as required in the legislation. [ 28 ] The appeal is dismissed, with costs. [ 29 ] Costs may of course be spoken to at the convenience of the parties.

Heard on the 20 th day of December, 2011 Dated at the City of Edmonton, Alberta this 22 nd day of October, 2012

Peter Michalyshyn J.C.Q.B.A. Appearances: George H. Akers Nicholl & Akers for the Appellant Cameron Ashmore City of Edmonton, Law Branch for the Respondent Kate L. Hurlburt & Darin S. McKinley Emery Jamieson for the CARB