Altus Group v Edmonton (City), 2014 ABQB 657

Court of Queen ’ s Bench of Alberta Citation: Altus Group v Edmonton (City), 2014 ABQB 657 Date: 20141028 Docket: 1303 11002, 1303 11003, 1303 11004, 1303 11754, 1303 13102, 1303 14822, 1303 16225, 1403 00077 Registry: Edmonton Between: 1303 11002 Altus Group Applicant - and - The City of Edmonton and The Assessment Review Board for the City of Edmonton and The Minister of Justice and Attorney General of Alberta Respondents

And Between: 1303 11003 Altus Group Applicant - and - The City of Edmonton and The Assessment Review Board for The City of Edmonton and The Minister of Justice and Attorney General of Alberta Respondents And Between: 1303 11004 Altus Group Applicant - and - The City of Edmonton and The Assessment Review Board for The City of Edmonton and The Minister of Justice and Attorney General of Alberta Respondents

And Between 1303 11754 CGI Clear Water GP Inc., Crombie Property Holdings Limited, The Toronto Dominion Bank, Dagmar Kubiak-Eydt, Scona Market Inc., Lauring GP Ltd., Investors Group Trust Co. Ltd., Josue Silveira, Ester Silveira, Canada Safeway Limited, Totem Developments Ltd., Shamrock Property Management Limited, Adibe Properties Ltd., Issam Moussa Properties Ltd., Yehia Properties Ltd., Ziad Properties Ltd., and Altus Group Limited as agent for the assessed persons named above.

Applicants - and - The City of Edmonton and The City of Edmonton Composite Assessment Review Board Respondents And Between: 1303 13102 Anthem Kimco North Town, Shopping Centre Ltd., Jim Pattison Developments Ltd., First Capital Holdings (ALB) Corporation; 678469 Alberta Ltd., Canada Safeway Limited, The Business Depot Ltd., Riokim Holdings (Alberta) Inc., 1561532 Alberta Ltd., Ikea Properties Limited, Luciak Developments Inc., Investors Group Trust Co, Ltd. and Altus Group Limited as agent for the assessed persons named above.

Applicants - and - The City of Edmonton and The City of Edmonton Composite Assessment Review Board Respondents

And Between: 1303 14822 Crombie Property Holdings Limited, Rona Revy Inc., Jim Pattison Developments Ltd., 942252 Alberta Ltd., Sobeys Capital Incorporated, The Business Depot Ltd., Riokim Holdings (Alberta) Inc., Loblaw Properties West Inc., 933351 NWT Ltd., Wolfram Fritz; Katja Fritz, Northland Properties Corporation, 1256240 Alberta Ltd., Metro Edmonton Prop Corp., Zayda Investments, Welsh’s Building Holdings Ltd., Costco Wholesale Corporation, Canada Safeway Limited, First Capital Holdings (ALB) Corporation, Lakeside Landing Edmonton Shopping Center Inc., First Capital Shopping Centre Ltd., Shamrock Property Management Limited, 4246551 Canada Inc., 1563688 Alberta Ltd., 151516 Canada Inc., 902933 Alberta Ltd., Columbus Investment Corporation Ltd., Anthem KRC Millwoods Mainstreet Ltd., 749972 Alberta Ltd., Riocan Real Estate Investment Trust, Sun Life Assurance Company of Canada, 552861 Alberta Ltd. and Altus Group Limited as agent for the assessed persons named above.

Applicants - and - The City of Edmonton and The Assessment Review Board for The City of Edmonton Respondents

And Between: 1303 16225 GMRI Canada Inc., Three M Investments (Alberta) Inc., Capital City Shopping Centre Limited., 10450 42 nd Avenue Portfolio Inc., First Capital Southpark Corporation., 967005 Alberta Ltd., Riokim Holdings (Alberta) Inc., Crombie Property Holdings Limited., Sobey’s Capital Incorporated., Jim Pattison Developments Ltd., Londonderry Shopping Centre Inc., First Capital (Northgate) Corporation., Omers Realty Corporation., Altus Group Limited as the agent for the assessed persons named above.

Applicants - and - The City of Edmonton and Edmonton Composite Assessment Review Board Respondents And Between: 1403 00077 Riokim Holdings (Alberta) Inc., Riocan Real Estate Investment Trust, Sun Life Assurance Company of Canada & Sun Life Insurance Canada Limited, 2118717 Ontario Limited, Riocan Meadows Shopping Centre Inc., Loblaw Properties West Inc. and Altus Group Limited as the agent for the assessed persons named above. Applicants - and - The City of Edmonton and Edmonton Composite Assessment Review Board Respondents _______________________________________________________

Reasons for Decision of the Honourable Mr. Justice Peter Michalyshyn _______________________________________________________ I. Introduction [ 1 ] By their agent Altus Group the owners of numerous retail properties seek leave to appeal more than 100 decisions in respect of year 2013 assessments of the Composite Assessment Review Board for the City of Edmonton (the “CARB”). For reasons which follow the applications for leave are dismissed. II . Background [ 2 ] Altus initiated not fewer than 10 grounds of appeal.

In the end it pursued just one. [ 3 ] Amongst the many left behind, one was an allegation that the CARBs were biased. In fact as noted by the City the allegation is that not fewer than 24 different adjudicators involved in the many CARB decisions appealed from were biased. In its many notices of appeal Altus alleged that these many adjudicators committed errors of law or jurisdiction by betraying an “unsupportable preference or bias for the City ...” [ 4 ] The City and the CARB argue, and I agree, that these allegations were not proven.

I was referred to no direct or circumstantial evidence from the many hearings on appeal to support even an air of reality of ‘unsupportable preference or bias’. And yet it appears that unfortunately it took until this hearing for those allegations formally to be withdrawn. [ 5 ] As suggested in Edmonton East (Capilano) Shopping Centres Limited (AEC) International Inc. v. Edmonton (City) , 2012 ABQB 445 , unproven allegations of ‘preference or bias’ undermine the administration of justice. They do so no less before an administrative tribunal than they would before this court.

On the record before me, it appears the allegations should not have been made in the first place. Once made, they lingered on the public record for more than seven months. They should have with withdrawn much sooner than at the outset of the leave to appeal hearing before me. [ 6 ] On another preliminary point, Altus concedes that its appeals filed under the action numbered 1403 00077 were brought outside the applicable limitation period.

Those appeals are accordingly dismissed. [ 7 ] Further, Altus argues, and I agree, that there is no defect of substance in the manner of naming the applicants in a number of cases on appeal.

The City allowed that if these cases were not to be dismissed outright, then at least they should be amended to reflect the name the owners as applicants, and I so order. [ 8 ] The sole issue brought forward then is set out as follows in Altus’ material: Was it fair and equitable to calculate the assessment of the subject properties using 100% of the size of the property based on the rent role of the property? [ 9 ] Before me were all of the decisions. I was referred only to a select few. They are mentioned in further detail later in these reasons. They are offered as examples of Altus’ grounds.

Also before me are hundreds of pages of transcripts and exhibits. They comprise a body of evidence presented by both the City and Altus common to at least most of the applications/decisions now under appeal. III. Positions of the parties [ 10 ] The City says that its assesses neighbourhood shopping centres based on 100% of the actual square footage based on rent rolls provided by the owners of the properties. The City assesses general retail based on an average of 95% of the gross size of the buildings in question. The city argues that it has good reason to assess the general retail properties differently.

And it says that in the end it arrives at an estimate of the general retail properties that in the cases on appeal corresponded equitably to the neighbourhood shopping centres in question. [ 11 ] For its approach the City relies on s. 2(3) of the Matters Relating to Assessment and Taxation Regulation Alta Reg 220/2004 (“ MRAT ”) and s. 467 of the Municipal Government Act RSA 2000 c.

M-26 (“ MGA ”) as its legislative authority for the impugned assessments. [ 12 ] Section 2(3) of MRAT provides that: Any assessment prepared in accordance with the Act must be an estimate of the value of a property on July 1 of the assessment year. [ 13 ]

Section 467 of the MGA provides that:

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 ortax roll or decide that no change is required.

(2) An assessment review board must dismiss a complaint that was not made within the proper time or that does not comply withsection 460(7).

(3) An assessment review board must not alter any assessment that is fair and equitable, taking into consideration (

a) the valuation and other standards set out in the regulations, (

b) the procedures set out in the regulations, and (

c) the assessments of similar property or businesses in the same municipality.

(4) An assessment review board must not alter any assessment of farm land, machinery and equipment or railway property that hasbeen prepared correctly in accordance with the regulations. [14] No one appears to disagree in principle that similar properties should be assessed fairly and equitably. [15] Altus argues the CARBs were wrong when they agreed with the City’s evidence and submissions regarding the size of thesubject properties for assessment purposes. [16] Altus appears to take no issue that the City, as part of its mass appraisal system, assigns various assessment classes to types ofproperties.

In the first instance the class of property here is “retail shopping”. [17] Altus says however that the City then inappropriately divides or ‘stratifies’ the retail shopping class into two different groups.Here the class is stratified into ‘neighbourhood shopping centres’ and ‘general retail’. The Altus properties are classified asneighbourhood shopping centres.

Altus says its principals’ properties are assessed by a “rent roll method” whereas the retail shoppingproperties are assessed by “leasable estimate method”. [18] The City in turn argues that nothing requires it to assess properties by the same methodology, so long as again similarproperties are assessed fairly and equitably. [19] Altus says the City failed to meet its onus to prove, and the CARBs erred in concluding, that the stratification was appropriatein the many cases on appeal.

As such Altus says its principals, all of whom are assessed at 100% as neighbourhood shopping centers, arebeing treated inequitably from those property owners assessed as general retail and assessed on average at 95%. Altus says that if itsprincipals’ properties are indistinguishable from the general retail properties, then the former must enjoy the lower 95% determination ofsize and, accordingly, lower assessments. IV.

Analysis [20] Once again, Altus proceeds on the following ground of appeal: Was it fair and equitable to calculate the assessment of the subject properties using 100% of the size of the property based on the rentrole of the property? [21] Altus breaks that down by asserting the following: 1. that the CARB erred in law by not concluding that Altus had met the prima facie onus upon it to show that its principals’properties should be treated similarly to other retail properties; 2. that the CARB erred in law by accepting the City’s evidence of ‘stratification’ of property types as evidence of thesimilarity between property groups; 3. and that the CARB erred in law by not varying the assessments to address the alleged inequity. [22] The applications for leave to appeal are brought pursuant to s. 470 of the MGA which governs appeals from an assessmentreview board such as the various CARBs in this case. [23] Section 470(5) expressly sets out the right of appeal from a decision of a board such as the CARB to this court.

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

a) involves a question of law orjurisdiction; (

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

c) stands a reasonable chance of success. (

a) Involves a question of law or jurisdiction [24] The threshold question is whether Altus raises a question of law. [25] In Edmonton (City) v. Edmonton (Composite Assessment Review Board), 2012 ABQB 171 the court at para 11(

d) articulatesthe 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 an error 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, but a 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 is an error of law. [ 26 ] A substantially similar test is articulated in Altus Group Ltd. v.

Calgary (Composite Assessment Review Board) , 2011 ABQB 739 , relied on by Altus in the leave applications before me. (Altus also relies on R. v. H. (J.M.) , 2011 SCC 45 , a case emerging from a quite different context but which nevertheless articulates a test which for the purposes of these cases appears to be in sync with the authorities already mentioned.) [ 27 ] In argument Altus acknowledges the prevailing legal test for what is a question of law under s. 470 of the MGA . Altus suggests there is some support for a less strict

interpretation of what is a question of law for s. 470 purposes. It argues that a less strict

interpretation would serve its principals’ ‘access to justice’. I was provided with no particular authority for these arguments. Nor though given the opportunity to do so, did Altus provide any authority the time that passed between argument and this decision. In the end I am not persuaded that any good reason exists to revisit the standard for leave to appeal under s. 470 , either on the basis of ‘access to justice’ or otherwise. [ 28 ] As to onus, Altus acknowledges it had the onus to show that its properties were, on their face, similar to the general retail properties whose size was assessed at 95%.

Only if it established a prima facie case that the assessments were incorrect in some way would an onus shift to the City to show the assessment was correct. [ 29 ] Altus says it met that onus in the many CARB hearings now appealed. Altus refers to Exhibit C-2 exhibited before the CARBs which in Altus’ submission “demonstrates the similarity between the Neighbourhood Shopping Centres and General retail...” [ 30 ] That submission is contrary however to the clear findings in the CARB decisions reviewed herein which concluded no such similarity existed on the evidence. [ 31 ] For example, in Altus Group v.

The City of Edmonton 2013 ECARB 01140 the CARB clearly apprehended Altus’ complaint and just as clearly rejected it. In doing so the CARB found that the City was entitled under the MGA and MRAT to ‘stratify’, that is, to assign properties to different sub-classes. In this particular decision the CARB found unsufficient evidence to dispute the City’s own evidence and contention that “the Shopping Centre group represents a homogeneous category of properties which behave in a similar fashion”.

Similarly the CARB found insufficient evidence to dispute the City’s own evidence and contention that “…generally smaller non-anchored developments typically fit into the General Retail category”. In this case the CARB noted that Altus was not arguing that its principals should be classified in a different category “…but rather simply that in their opinion the properties were similar and thus were entitled to similar treatment”.

In answer to Altus’ position, the CARB concluded that it [42] …did not receive sufficient evidence from [Altus] that the subject property was similar enough to warrant the same treatment as the property in another classification”. [43] The CARB concludes that because the properties are legitimately stratified in different classifications by the City, the subject property is not similar to the properties in Ex.

C2 for purpose of requiring equitable treatment between them. [46] The principal reason for the decision was the lack of similarity between the properties in the Shopping Centre class and the others in the General Retail class which is a prerequisite for a claim of equitable treatment. [ 32 ] In Altus Group v. The City of Edmonton , 2013 ECARB 00668 the CARB once again recited Altus’ complaint and its reasons for rejecting it.

In this case the CARB was more categorical when it rejected Altus’ evidence as being an “in depth analysis performed by the Complainant to determine if the subject property is assessed equitably with other similar properties”. (This was the same evidence referred to in Altus Group v.

The City of Edmonton , 2013 ECARB 01140 as “Ex C2”.) [ 33 ] The CARB clearly preferred the City’s evidence: [33] The evidence of the City shows that shopping centre’s [sic] and properties in the retail valuation group are not being assessed in the same way, because they are not similar properties, and the information that is provided to the City for these two separate groups of properties is different. [ 34 ] By having properties that are not comparable to the subject property, the Board finds that the Complainant’s evidence and argument does not establish that the subject property is inequitably assessed with other similar properties. [34] Likewise, in Altus Group v.

The City of Edmonton , 2013 ECARB 01002 the CARB, after considering the same exhibit evidence of the parties in the circumstances of the case before it, concluded at para 31: …the Board was not convinced that standard retail properties and power/shopping centre properties are comparable when considering attributes such as tenant type, location, size, and value. The Board considers that the City’s approach using 95% of gross building area to approximate 100% of the net leasable area for standard retail properties is reasonable when considering the incomplete owner reported information on these properties.

Since 100% of the net leasable area is known through the owner reports on power centres there does not appear to be an overall assessment inequity. [ 35 ] To a similar effect, Altus Group v. The City of Edmonton , 2013 ECARB 00667 and Altus Group v. The City of Edmonton , 2013 ECARB 01408.

[ 36 ] Altus suggests that the CARBs tacitly acknowledged inequitable treatment. Nothing that was brought to my attention this contention. [ 37 ] What’s more, the City argues another ‘bottom line’ proposition – and nowhere in Altus’ brief or arguments is there an apparent response – that Altus failed to show before the CARBs that its principals were assessed at more than market value. [ 38 ] In conclusion to this point I am unable to agree that Altus established a prima facie case of inequitable treatment before the CARBs. The CARBs quite clearly preferred the City’s evidence over that proffered by Altus.

That preference was explained clearly and straightforwardly in the exemplar CARB decisions just referred to. [ 39 ] No prima facie case having been established, no onus shifted to the City to justify the inequitable treatment Altus alleged. [ 40 ] I am unable to agree with Altus’ submission that the CARBs required the applicants to demonstrate that the city’s classification was on the whole incorrect. [ 41 ] Nor do I agree with Altus’ submission that the CARBs erred in law by concluding “…that the mere fact that the City has classified properties into different stratifications means that the requirement for fair and equitable treatment does not apply between properties that are otherwise similar on their face”.

This submission fails on the basis that I do not interpret the CARBs as having decided that the properties were ‘otherwise similar on their face’. [ 42 ] Altus suggested in its brief that the CARBs should have treated all of the retail properties as “functionally” similar. But that does not appear to be test in law.

And whether a property is “functionally” similar engages questions of at least fact and law. [ 43 ] On the whole I agree with the City and the CARB that the CARBs’ findings around inequitable treatment – that is to say, that there wasn’t any on the evidence – are findings of mixed law and fact with no extricable error of law, and thus immune from appeal: Canada (Director of Investigation and Research) v. Southam [1997] SCR 748; Genesis Land Development Corp v.

Calgary (City) , 2014 ABQB 57 . [ 44 ] I agree further that there was sufficient evidence before the CARBs that justified their findings, once again of mixed law and fact, that different treatment could be justified on the basis that properties could be stratified within the general ‘retail shopping’ assessment class. [ 45 ] And I agree that Altus’ third ground – that the CARBs erred by upholding the assessments as equitable – is nothing more than an attempt to argue the CARBs were wrong, and does not does not support leave to appeal on the record before me. (

b) Raises an issue of sufficient importance to merit an appeal [ 46 ] Whether an issue is of sufficient importance to merit an appeal appears to be the least onerous threshold to meet when considering the three-part test for leave: Edmonton (City) v. Edmonton Composite Assessment Review Board, 2012 ABQB 439 at para 14 . [ 47 ] Ross, J. at para. 42 of Associated Developers Ltd. v. Edmonton (City) , 2011 ABQB 592 suggests that an issue may be of sufficient importance to merit an appeal if it is important for jurisprudential purposes.

The importance must be determined on an objective scale, not the subjective importance of the matter to the applicant. Generally there should be something unsettled about the question, or the decision should have wide ranging implications. The issues should not be merely the correction of a situation fact specific to the one case, without more. [ 48 ] Notwithstanding the large numbers of appeals before me, I am not persuaded that these fact-specific issues of onus and stratification are not simply subjective to the parties; Altus has not shown an issue with objective precedential value. (

c) Stands a reasonable chance of success [ 49 ] Giving Altus the benefit of the doubt and assuming a correctness standard, I am not persuaded that there is a reasonable chance of success on the issue raised. I also note that under this heading Altus argues that the CARBs “tacitly” accepted inequitable treatment, for which there is no support in the evidence. V. Conclusion [ 50 ] The Applicants’ applications for leave to appeal are dismissed. If they are unable to agree, the parties may speak to costs. Heard on the 13 th day of March, 2014. Dated at Edmonton, Alberta this 28th day of October, 2014.

Peter Michalyshyn J.C.Q.B.A. Appearances: Stephanie A. Wanke Ogilivie LLP for the Applicant Cameron J. Ashmore The City of Edmonton, Law Branch for the Respondent, The City of Edmonton Kate Hurlburt Emery Jamieson LLP for the Respondent, The City of Edmonton Composite Assessment Review Board