4087836 Canada Incorporated v. Brookfield Properties (Bankers, 2016 ABQB 569

Court of Queen’s Bench of Alberta Citation: 4087836 Canada Incorporated v Calgary (City), 2016 ABQB 569 Date: 20161007 Docket: 1201 12935 Registry: Calgary Between: 4087836 Canada Incorporated and Brookfield Properties (Bankers Hall) Limited, Represented by Colliers International Applicants - and - The City of Calgary and The Assessment Review Board for The City of Calgary Respondents _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice G.C.

Hawco _______________________________________________________ [ 1 ] On September 18, 2012 the Assessment Review Board for the City of Calgary (“the Board”) assessed the Applicants’ property located at 855 – 2 nd Street SW in the City of Calgary at $823,470,000.

This property is known as Bankers’ Hall East and West Towers. [ 2 ] The Board also determined that the 2012 assessment lease rate of $25.00 per square foot was appropriate and that the capitalization rate of 6% was appropriate, after having considered the Applicants’ submissions and the Respondents’ submissions and taking into consideration all of the documents listed in Appendix A to the Board’s decision. [ 3 ] The Applicants’ wish to appeal the Board’s decision and thus bring this application pursuant to s 470 of the Municipal Government Act , RSA 2000, c M-26 (“ MGA ”). [ 4 ] In order to obtain leave to appeal, the Applicants must satisfy each step of the test found in s 470(5);

a) The appeal involves a question of law or jurisdiction;

b) The question of law or jurisdiction is of sufficient importance to merit an appeal; and

c) The appeal has a reasonable chance of success. [5] The Applicants have submitted that the Board’s errors were:

a) It made an arbitrary finding that had no basis on the evidence;

b) It erred in law by placing the onus and burden of proof on the Applicants with respect to the capitalization rate;

c) The Applicants had a legitimate expectation that the Board would engage in an analysis of the issues of renewables as a result ofprevious board decisions; and

d) The Board made an erroneous finding of fact that bore no relation to the evidence presented, thereby committing an error of law. [6] The first line of attack on the Board’s decision was that the City had used a 6% capitalization rate and that it should havebeen greater.

The Applicants argued that the Board had based the rate upon the City’s theory that the property’s proximity to what theCity called “the retail spine” suggested a lower capitalization rate. [7] The Applicants argued that the City really produced no evidence demonstrating that the property’s location justified a .25%reduction in the capitalization rate. [8] Basically, the Applicants argued that the City managed to convince the Board that some properties which were used ascomparables by the City, and accepted by the Board, were not appropriate for various reasons. [9] The Applicants alleged another error in that the Board had accepted certain leases as appropriate comparables as opposed toothers which the Applicants urge should be used to determine an appropriate lease rate.

By using inappropriate leases, the rental rate wastoo high and in turn further affected the assessed value. [10] It appears to be accepted by both parties that the appropriate standard of review is correctness so the matter really comesdown to no more than a decision of whether the Board made an error of law. [11] The thrust of the Applicants’ argument is that the Board ignored items of interest that it should have considered and ignoredan earlier decision of their own which would have been helpful to the Applicants. [12] The corollary to having failed to consider an earlier decision of the Board is, the Applicants argue, that they had the right torely upon the fact that the prior decision would be considered and relied upon.

Indeed, it was argued that failure of the Board to at leastconsider the earlier decision constituted the Board having acted in an arbitrary fashion. The Respondents’ Position [13] While there are two named Respondents, being The City of Calgary and the Board itself, the Board has taken the position thatit should make no submissions relating to the merits of the decision and the findings. Counsel for the Board did review the jurisdictionand procedures of the Board and various applicable regulations.

The Board did submit that this Court should be mindful of the statutoryscheme established by the province’s legislature to administer municipal property assessments and should take care not usurp the factfinding functions entrusted to the Board with respect to hearing complaints concerning property assessments.

As authority for thatproposition, the Board referred to a decision of our Court of Appeal, Pridgen v University of Calgary, 2012 ABCA 139 , [2012]AJ No 443. [14] The City’s position was that the Board had considered the appropriate arguments and evidence with respect to both the rentrate issue and the capitalization rate issue and preferred the evidence and arguments of the City.

It argued that the Board did not err in itsreasons or considerations and that the Court ought not to intervene. [15] With respect to the matter of whether there was a pure legal question or an issue of mixed law and fact, which would notwarrant the Court’s review, the City argued there should be no leave granted. Decision [16] I am satisfied that the Board did not make any error of law. The application for leave to appeal is denied. Reasons [17] In my view, the Applicants’ arguments came down to: 1.

The Board made an error in law by failing to take into consideration relevant considerations and erred in placing undue weightupon what the City claimed was retail space, as opposed to actual evidence of market values; 2. It further argued that the City arbitrarily assigned a .25% decrease in the capitalization rate without any, or proper, evidence.

3. As already stated it also argued that the Board failed to consider a prior decision which would have supported its’ position. [ 18 ] It seems to me, quite frankly, that the thrust of the Applicants’ case is really that the Board preferred the arguments and information provided by the City as opposed to the data and arguments which the Applicants put forth. [ 19 ] When I look to the Board’s decision it is clear to me that it took into consideration all the Respondents’ submissions. It looked at all of the material submitted (see particularly para 16, 19, 21, 22 and 23).

It went through the City’s position on each matter raised by the Applicants. It looked at several leases presented – leases with respect to similar AA Class office space in buildings in the downtown area. It took into consideration the Encana lease. The Applicant argued that the Board erred by appearing to accept that the Encana lease was undisputed. As I read the decision, the Board was simply stating that the terms of the lease as set forth were undisputed, as indeed they were. [ 20 ] The Board looked at downtown capitalization rates. It reviewed and considered the evidence and submissions of both parties.

Again, see para 42. It appended, or listed, the documents which had been presented and considered by them. [ 21 ] It stated why it chose both a rent rate and a capitalization rate. In particular, at paras 42 – 46, it goes through why the rent rate was chosen over the Applicants’ suggestion. [ 22 ] At paras 48 -52, it says why it accepted the capitalization position as espoused by the City. [ 23 ] The Applicants appeared to place a great deal of weight upon the fact that the Board failed to follow an earlier decision. That was CARB 1571/2011-P.

That decision was listed in the material appended to the Board’s decision. [ 24 ] Not only did it appear, therefore, that the Board had considered that decision, but it must be borne in mind that the doctrine of stare decisis is not binding upon administrative tribunals. See Petro Canada , Re 2010 ABCA 328 . The Board did not have to say why it chose to not follow that decision. It had no obligation to do so. See Jorgen Walter Ruppert v Calgary Assessment Review Board and The City of Calgary , Alberta QB 2010, action 1001 11405, particularly at p 12, l 38 – 41 and p 13, l 1.

To fail to follow or even mention as to why it does not follow the decision does not constitute acting in an arbitrary and discretionary manner. [ 25 ] The Applicants seek leave to appeal and for a direction that the matter be sent back to the Board. I find no error of law has been committed. [ 26 ] While a lot of money is involved, that alone is not of sufficient importance to warrant granting an appeal. [ 27 ] I have no reason to believe that any appeal or reconsideration would be successful. [ 28 ] The application for leave to appeal is denied.

The Respondents are entitled to costs, other than the Board itself, which was not seeking costs. Heard on the 17 th day of June, 2016. Dated at the City of Calgary, Alberta this 7 th day of October, 2016. G.C. Hawco J.C.Q.B.A. Appearances: R. Harrison for the Applicants H. Chan for the Respondent/The City of Calgary M. Janke

for the Respondent/The Assessment Review Board for The City of Calgary