Concord Pacific Alberta Properties Inc v Calgary (City), 2017 ABQB 138

Court of Queen’s Bench of Alberta Citation: Concord Pacific Alberta Properties Inc v Calgary (City), 2017 ABQB 138 Date: 20170228 Docket: 1201 15150 Registry: Calgary Between: Concord Pacific Alberta Properties Inc. and BCIMC Realty Corporation (as represented by its designated agent, Altus Group Limited) Applicants - and - The City of Calgary and the Assessment Review Board for The City of Calgary Respondents _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice C. Dario _______________________________________________________ I.

Introduction [ 1 ] The Applicants seek leave pursuant to s. 470 of the Municipal Government Act, RSA 2000, c M-26 (“ MGA ”) to appeal a decision of the Respondent, Calgary Composite Assessment Review Board (the “CARB” or the “Board”). The CARB decision pertains to the assessment for the 2012 tax year of five (5) contiguous parcels of vacant land in the Eau Claire district. The Applicants also seek judicial review of the decision in a subsequent hearing. The City of Calgary (the “City”) is also a Respondent and was the respondent before the CARB.

II. Background [ 2 ] The Applicants appealed the City’s assessments of the Eau Claire properties to the Board, seeking a reduction in the assessments to account for, inter alia , market forces and the negative effects of zoning restrictions. [ 3 ] The Applicants put forward several methods of valuing the subject properties. Three of these involved Floor Area Ratio (“FAR”) analysis.

The CARB noted at para 32 that the FAR analysis has merit but found that “the proposed comparables were too dissimilar as to use, location, and development potential and so could not provide a dependable number on which to base a valuation for primarily residential property”. [ 4 ] As an alternative, the Applicants provided evidence of the time-adjusted sale price of one of the subject properties, 700 1st Avenue SW.

They argued that land values in the downtown area had dropped 13-22% from 2011 to 2012 and that, in the absence of additional sales in the Eau Claire district, the time-adjusted sale price of 700 1st Avenue SW was the best indicator of value.

In response, the CARB stated at para 33: For the time adjusted sales value, the CARB concludes that while the value difference does appear to reflect a drop in values from 2011 to 2012..., the CARB notes that, in fact, the values for the Eau Claire area for 2011 were $225.00 per sq. ft. (based on the 2011 CARB decision), and there was insufficient evidence produced to show that the Eau Claire land values dropped further from 2011 to 2012.

Particularly because of the lack of sales in the subject area, the limited amount of vacant land in Eau Clair [sic] (with the exception of the subject properties) the CARB is inclined to accept the comment from the Respondent that they simply carried forward the 2011 CARB decision rates for the 2012 valuation. [ 5 ] Finally, the Applicants asserted that the market value of the properties was reduced by development restrictions imposed by certain bylaws (the “Direct Control Bylaws”). They sought a 20% reduction in the assessments to account for the effect of the Direct Control Bylaws (the “Bylaw Adjustment”).

The Applicants noted that the Bylaw Adjustment had been allowed by the City in previous assessments, including those for 2010 and 2011, but had been removed in the 2012 assessment. [ 6 ] The CARB noted that Eau Claire was segregated from zone DT1 in 2010 and designated as its own zone with a lower vacant land rate: $225 per sq ft as compared to $325 per sq ft for DT1. The evidence before the CARB was that a 20% adjustment had been applied to the subject lands in prior years, including 2011, but was not applied in 2012.

The CARB noted at para 34 that “No explanation was given by either party for the discontinuance of this adjustment.” The Board went on to say in para 34: The CARB is left to surmise that the adjustment is “leftover” from when the Eau Clair [sic] lands were considered part of the DT1 which had greater development potential and a higher value. This adjustment would serve to reduce the price to reflect the difference in use and potential. Once the Eau Clair [sic] area was segregated on its own with much lower values, this adjustment was no longer necessary because it was imbedded in the land value.

The fact that it was allowed in 2011 was most likely an oversight not having recognized the Eau Clair [sic] area which was established as a separate zone in 2010. [ 7 ] At para 35, the CARB found “no compelling argument to implement [the Bylaw Adjustment] again for the subject properties” in 2012. [ 8 ] The CARB thus rejected each basis for valuation proposed by the Applicants and instead carried forward the 2011 valuation with some adjustments. III.

Issues [ 9 ] The Applicants assert that the Board erred in law by: 1) failing to take into account the effect on value of development restrictions on the subject properties pursuant to the Direct Control Bylaws; 2) failing to recognize the time-adjusted sale price of 700 1st Avenue SW as an indicator of value; and 3) failing to consider, in carrying forward land values from a prior year:

a) that annual property assessment is required by ss. 285 and 289 of the MGA , or

b) that a property’s characteristics and physical condition as at December 31 of the assessment year are to form the basis of an assessment, as required by s. 289(2) of the MGA in the context that the undisputed evidence before the CARB indicated a decline in value. IV. Test [ 10 ] For the purpose of this application, the parties agree that the test to obtain leave, as set out in s. 470(5) of the MGA , is that:

i) the appeal is on a question of law or jurisdiction; ii) the issue is of sufficient importance to merit an appeal; and iii) the appeal has a reasonable chance of success.

[11] If the Applicants establish all three elements, the Court may grant leave to appeal, but is not required to do so. V. Analysis A. Bylaw Adjustment [12] The Applicants argue that the Board erred in not applying the Bylaw Adjustment. They state this was an error in that theBoard failed to consider or to provide sufficient weight to the Bylaw Adjustment, failed to apply the proper test and/or made adetermination based on facts not in evidence. 1.

Question of Law or Jurisdiction [13] All that is necessary at the leave stage is for the Applicants to establish that the Board may have made an error of law orjurisdiction: Associated Developers Ltd v Edmonton (City), 2011 ABQB 592, 527 AR 287 at para 6.

It is a strict rule that an appeal tothis Court is available only on questions of law and jurisdiction: Canadian Natural Resources Ltd v Wood Buffalo (RegionalMunicipality), 2012 ABQB 177, 535 AR 281 at para 109. [14] Questions of law were characterized as follows by Madam Justice Nation in Altus Group Ltd v Calgary (CompositeAssessment Review Board), 2011 ABQB 739, 528 AR 138 (“Altus CARB”) at para 21: Generally stated, an incorrect statement of the legal standard, or test, or an application of incorrect factors in applying the law to the factsis clearly an error of law.

The law must not only be correctly stated, but that correct

interpretation of the law must be applied to the facts,when engaged in applying the law to the facts. Where there is a discretion involved in applying the law to the facts, the application of thediscretion is not a question of the law, but a question of mixed law and fact.

However, if a wrong legal principle is used in the applicationof the law to the facts, or in the exercise of the discretion, there is an error of law. [15] In Canada (Director of Investigation and Research, Competition Act) v Southam Inc., (SCC), [1997] 1SCR 748, the Supreme Court of Canada considered when an error in assessing evidence amounts to an error of law.

The Court held atpara 41 that, even if all the elements of the test are correctly stated, ignoring evidence the law requires a board to consider is an error oflaw, while reaching the wrong conclusion after considering all such evidence is an error of mixed law and fact. The Court went on atparas 43 and 44 to discuss how this applies to a tribunal’s handling of a balancing test, stating as follows: The suggestion remains, however, that the Tribunal might have erred in law by failing to accord adequate weight to certain factors.

Theproblem with this suggestion is that it is inimical to the very notion of a balancing test. A balancing test is a legal rule whose applicationshould be subtle and flexible, but not mechanical. It would be dangerous in the extreme to accord certain kinds of evidence decisiveweight... A test would be stilted and impossible of application if it purported to assign fixed weights to certain factors... The most thatcan be said, as a matter of law, is that the Tribunal should consider each factor; but the according of weight to the factors should be leftto the Tribunal.

It seems, then, that if the Tribunal erred, it was in applying the law to the facts; and that is a matter of mixed law and fact.

This isespecially so if, as here, the legal principle being applied involves a balancing test... [16] The Applicants cite T Eaton Co v Alberta (Assessment Appeal Board), 1995 ABCA 361, 174 AR 99, as well as several priorCARB decisions, in support of the proposition that restrictions limiting a property’s development must be taken into account whenvaluing that property. [17] The Applicants further assert that, by failing to account properly for the development restriction, the Board used the wronglegal principle in its application of the law to the facts, amounting to an error of law: Altus CARB at para 21.

In support of this view, theApplicants also cite 908118 Alberta Ltd. v Calgary (City), 2013 ABQB 100, 8 MPLR (5th) 83, wherein Justice Kenny stated at para 34that “...the question of whether the CARB properly accounted for the developmental restrictions imposed by the Bylaw is one of law.This is not simply a matter of ignoring evidence or giving inappropriate weight to evidence - it is a question of whether there was afailure to consider the effect of a legal requirement.” In that case, however, as in T Eaton, the board looked to the subjective value of theland to the taxpayer rather than its market value.

This is distinguishable from the present case, where the Board considered the effect ofthe Direct Control Bylaws based on objective factors. [18] The City does not deny that the effect of development restrictions is a relevant consideration that the CARB must take intoaccount.

Its position is that the Board considered this evidence and that the Court does not have jurisdiction to determine whether itsufficiently weighed the evidence or came to the correct conclusion. [19] It is clear from the record before me that the Board did consider whether the Bylaw Adjustment should be made.Accordingly, the Applicants’ assertion that the Board did not do so is without merit.

Further, the assertion that the Board did not accordthe Bylaw Adjustment enough weight is not a question of law to be reviewed by this Court. [20] The manner in which the Board handled the Bylaw Adjustment, however, is problematic. As a board with specialization inthis subject matter, the CARB typically has discretion to choose from among reasonable alternative tests and methodologies. In this case,it found that the Bylaw Adjustment was already embedded in the revised land values for the Eau Claire zone.

The Applicants argue that,in coming to this conclusion, the Board relied on facts that were not in evidence and were contrary to the only evidence before it. [21] The Applicants argue that reaching a conclusion without any evidence in support raises a question of law. They cite Daysland(Town) v Daysland (Subdivision and Development Appeal Board), 2011 ABCA 33, wherein the Court of Appeal held at para 3 that atotal absence of evidence in support of a board’s finding goes to jurisdiction and at para 8 that it may be an error of law. The Applicants

also refer to Murphy v Saskatchewan Government Insurance , 2008 SKCA 57 , 310 Sask R 149 at para 5 in support of the proposition that a board’s finding of fact may amount to an error of law if it is based on no evidence. [ 22 ] Pursuant to s. 464(1) of the MGA , the CARB is not bound by the rules of evidence or any other law applicable to court proceedings and generally the Board is free to reject evidence in favor of the other evidence without raising a question of law.

Typically, the Court does not have jurisdiction to review the Board’s discretion respecting the admissibility, relevance or weight of evidence: Altus CARB at para 28 . There is, however, a distinction between the treatment of evidence and making a decision in the absence of evidence. In the present case, it appears that the City did not provide evidence as to why the Bylaw Adjustment was not applied in 2012. The Board stated at para 34 that it was “left to surmise” that the Bylaw Adjustment was embedded in the reduced Eau Claire land values.

In the absence of evidence to support that hypothesis, the CARB’s decision may constitute an error of law. [ 23 ] The CARB’s decision may also represent a failure to recognize the distinction between the initial and ultimate burdens of proof. Madam Justice Veit recently clarified this in Ross v Edmonton (City) , 2016 ABQB 730 at para 4 : … This Board committed an error of law in requiring [the Complainant] to prove that her assessment was incorrect before requiring the City to engage; [the Complainant] had put forward some evidence that the assessment was incorrect.

In such a situation, the evidentiary burden shifted to the City. … [ 24 ] Similarly, in the present case, the Applicants provided some evidence that the Bylaw Adjustment should apply to the subject properties. Since the City left the CARB to speculate as to why the Bylaw Adjustment was not applied, the CARB may have erred in law by making a determination without evidence in support, thus failing to apply the correct legal burden. 2. Sufficient Importance [ 25 ] The second element of the test requires the Applicants to establish is that the issue is of sufficient importance to merit an appeal.

The Court of Appeal has made clear that a question of sufficient importance is not to be confused with “error correction”. Rather, a question will be of sufficient importance if there is something novel or unsettled about it or if it has wide ranging implications: R v Terroco Industries Ltd. 2004 ABCA 159 , 348 AR 96 at paras 18-19 . Other possibilities are (

i) that the issue is of jurisprudential importance or (ii) that there is a demonstrable error, such as misquoting evidence: respectively, Edmonton (City) v Edmonton (Composite Assessment Review Board) , 2012 ABQB 171 , 535 AR 215 at para 11 (

h) and Garry v Canada , 2007 ABCA 276 at paras 8 and 9 . [ 26 ] Whether an issue is of sufficient importance to merit an appeal must be determined on an objective scale, not on the basis of its subjective importance to the applicant: 845971 Alberta Ltd v Grande Prairie (City) (Subdivision & Development Appeal Board) , 2010 ABCA 135 at para 8 .

Nevertheless, a decision that affects only the parties, but has implications going beyond them may qualify, depending upon how widely those implications are likely to be felt: Carleo Investments Ltd v Strathcona (County) , 2014 ABCA 302 , 28 MPLR (5th) 173 at paras 9 and 10 . [ 27 ] The Applicants state that the Board’s approach to the effect of development restrictions on the value of property has wide ranging implication for property owners beyond these parties.

The City states none of the grounds raised by the Applicants settles a question of broad interest, has jurisprudential purpose, or is of precedential value. [ 28 ] The Applicants are the only parties affected by the CARB’s supposition that the Bylaw Adjustment had been embedded in the vacant land assessment value, as the subject properties are the only vacant lands in the Eau Claire zone.

Despite this narrow range of affected parties, determining whether the Board can make its decision based on facts not in evidence or is entitled to make a fact finding in opposition to the only evidence before it is, in my view, of objective importance, including in understanding the scope of the Board’s discretion. I find this issue is of sufficient importance to merit an appeal. [ 29 ] Further, to the extent it turns on whether the CARB imposed an incorrect legal burden on the Applicants, the issue is of sufficient importance to merit an appeal. 3.

Reasonable chance of success [ 30 ] The third element of the test requires the Applicants to establish the appeal has a reasonable chance of success. The Applicants must demonstrate that the proposed appeal prima facie has sufficient merit to satisfy this requirement: Altus Group Ltd v Calgary (City) , 2013 ABQB 608 , 570 AR 1 (“ Altus Calgary ”) at para 52 , citing Stiles Estate v Alberta (Energy and Utilities Board) , 2005 ABCA 308 , 53 Alta LR (4th) 235 at para 19 .

This, in turn, requires consideration of the appropriate standard of review: Altus Calgary at para 53 . [ 31 ] In Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd , 2016 SCC 47 , the Supreme Court of Canada affirmed that, as a starting point, where the issues pertain to the

interpretation by an administrative body of its own statute or statutes closely connected to its function, the presumptive standard of review is reasonableness. The Court noted that four categories of issues that rebut this presumption and attract a correctness standard were identified in Dunsmuir v New Brunswick , 2008 SCC 9 , 1 SCR 190.

Those categories are: constitutional questions regarding the division of powers; issues “both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise”; “true questions of jurisdiction or vires”; and issues “regarding the jurisdictional lines between two or more competing specialized tribunals”: Capilano at para 24. [ 32 ] The Alberta Court of Appeal had held that because the MGA provides a right to appeal, reviews of the CARB’s decisions should be conducted on a correctness standard.

The Supreme Court in Capilano reversed this finding and held that a statutory right of appeal should not be added to the correctness categories enumerated in Dunsmuir . The Supreme Court held that the substantive issue in Capilano , being whether the board had the power to increase an assessment, turned on the

interpretation of s. 467(1) of the MGA , the board’s home statute and that this issue did not fall within one of the four Dunsmuir categories requiring a correctness standard. Accordingly, the standard of review in such instances is presumed to be reasonableness.

[ 33 ] Despite this presumption, however, not all MGA appeals are subject to the reasonableness standard: Ross v Edmonton (City) , 2016 ABQB 730 at para 18 . A non-deferential (i.e. correctness) standard may apply where it does not appear that the board was interpreting the MGA and will apply if the matter falls within one of the Dunsmuir categories. The Dunsmuir exception that may be relevant in this case is whether the appeal raises a question which is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise.

This could include issues around procedural fairness, such as the correct placement of the burdens of proof. I note that no deference is owed with respect to whether the CARB has complied with its obligation to afford procedural fairness: Associated Developers at para 50. [ 34 ] If the standard is reasonableness, the decision must fall within a range of possible, acceptable and rational outcomes which are defensible in respect of the facts and law.

Reasonableness is also concerned with principles of justification, transparency and intelligibility in the decision making process: Dunsmuir at para 47 ; Canada (Attorney General) v Delios , 2015 FCA 117 , 472 NR 171 at para 26-27 ; Capilano at para 36. [ 35 ] The City relies on the Applicants’ onus of proof in an appeal before the CARB. Section 467(3) of the MGA mandates that an assessment review board not alter any assessment that is fair and equitable, taking into consideration the factors set out in that section.

The City contends that the CARB was not satisfied that the Applicants had proven a reduction to the assessments was warranted based on the evidence presented, and thus was correct to not alter the assessment. The City argues that it does not need to justify discontinuing the Bylaw Adjustment; rather, the Applicants need to justify its continuation. Strictly speaking, the doctrine of stare decisis does not apply to administrative tribunals.

Thus, the mere fact that a CARB decision conflicts with a previous CARB decision does not warrant judicial intervention. [ 36 ] The CARB argues that its function is to determine whether an assessment is fair and equitable and to change it if it is not. It has no ability to ask for more information or to move to a second hearing. It can rely only on the evidence the parties present.

If an applicant does not present sufficient evidence, the application fails and the assessment stands. [ 37 ] The Applicants argue that the only evidence before the CARB was that the Bylaw Adjustment was applied in prior years and that the property still met all of the same conditions. The issue is whether the CARB’s discretion extended to accepting the City’s position regarding the Bylaw Adjustment without evidence of the reason for the change or whether such finding was sufficiently unreasonable or irrational to constitute an error of law.

The Applicants further argue that, regardless of whether the decision falls within the range of possible outcomes that are defensible with respect to the facts and law, if the Board missteps in the application of the law, the reasons are irrelevant. In support of this proposition, the Applicants point to the limits on decision making set out by Justice Binnie in Dunsmuir at para 129 wherein he notes that “fair procedure is said to be the handmaiden of justice”. [ 38 ] In my view, two issues arise from the CARB’s decision regarding the Bylaw Adjustment.

First, the CARB made its determination based not on the evidence presented by the parties, but on facts it surmised. Second, the CARB placed the ultimate burden of proof on the Applicants after they discharged their initial burden and without any contrary evidence from the City. [ 39 ] A preliminary review of the materials submitted does not disclose evidence to support the CARB’s finding.

I am inclined to the view that the question of the Board’s authority to make a decision in the absence of supporting evidence is of importance to the legal system and is outside the Board’s expertise, thus calling for a correctness standard. Even applying the reasonableness standard, however, a decision made by the Board without any evidence to support it is prima facie unreasonable.

Further, in the absence of evidence, it is not possible for this Court to assess whether the CARB’s decision falls within the range of reasonable outcomes. [ 40 ] In addition, the CARB has not provided reasons for its application of the burdens of proof.

As stated in Ross at para 20 , “In the absence of any reasons for departing from the correct burden analysis, this court can only conclude that the Board’s departure was unreasonable.” Thus, it was unreasonable for the Board to impose the ultimate burden rather than an initial burden on the Applicants. [ 41 ] Taking all of the foregoing into account, I find that the Applicants’ appeal on this issue has a reasonable chance of success. 4.

Conclusion [ 42 ] As all three elements of the test are satisfied, I grant leave to appeal on this issue. [ 43 ] Section 470(6) of the MGA provides, inter alia , that if a judge grants permission to appeal, the judge may “specify the question of law or the question of jurisdiction to be appealed”. Accordingly, with respect to the Bylaw Adjustment, I grant leave to appeal on the following question: whether the CARB is entitled to make its determination regarding the application of the Bylaw Adjustment in the absence of evidence from the City as to the reason for the discontinuation of that adjustment.

Related to this analysis, the Court may need to consider whether the Board incorrectly imposed the burden on the Applicants. B. Consideration of 700 – 1 st Ave. SW property [ 44 ] The second issue raised by the Applicants is that the CARB failed to consider the 2007 sale price of one of the subject lands as an indicator of its 2012 value in its review of the market and equity FAR analysis. The Applicants contend that, while the Board was cognizant of that sale, it did not consider it an indicator of value because it was not included in the Applicants’ market and equity FAR analysis evidence.

Instead, this sales information was advanced as a stand-alone basis for reduction in the time-adjusted sales value methodology. In its evaluation of the Applicants’ sales and equity FAR evidence, the CARB noted at para 27 that “none of the sales are located in the same zone as the subjects” and stated that it was “left to wonder why the sale of 700 1st Ave.

SW ... was not included in the comparable sales given that the property sold later than other included properties and was in the same market zone”. [ 45 ] Although the sales information pertaining to this property relates to both the time-adjusted sales value analysis and the market and equity FAR analysis, it is only the Board’s failure to consider this evidence in the latter analysis that is in dispute.

1. Question of Law or Jurisdiction [ 46 ] The Applicants assert that the CARB’s failure to recognize the sale of 700 - 1st Ave SW as an indicator of value in the FAR analysis is an error in law. They argue that the Board’s comment about the subject property not being included as a comparable indicates a failure to consider that evidence.

The City argues that the CARB considered the property in its analysis of sales and equity evidence, despite the Board’s comments that may suggest otherwise. [ 47 ] While a failure to consider certain evidence can form the basis of a question of law, I am mindful that the Court must look beyond the Applicants’ characterization of the issue as a question of law.

The Court of Appeal has directed reviewing judges to “identify the true target of the applicant’s attack, determine if it raises a question of law or jurisdiction and gauge whether the issue is arguable”: Alberta (Workers Compensation Board) v Alberta (Workers’ Compensation Board Appeals Commission) , 2005 ABCA 276 , 371 AR 318 at para 19 .

At para 21 of that decision, the Court of Appeal noted the “well-recognized distinction between questions of law and questions of mixed fact and law” and stated that “questions of law are about the correct legal test, whereas questions of mixed fact and law are about whether the facts satisfy the legal test.” [ 48 ] In my view, the Applicants’ argument is an attack on the Board’s application of the law to the facts and is therefore outside the scope of the appeal permitted under the MGA . [ 49 ] While it is unclear whether the CARB felt it was unable to consider the subject property in the equity and sale FAR analysis merely because the Applicants had not included it in the list of comparable properties, the sale value information clearly was available to the Board.

Ultimately, the CARB decided to put “less weight on the FAR influence analysis principally because the properties are dissimilar, and collaterally because the [Applicants] did not demonstrate support for a residential value calculation.” In the end, the Board chose a different valuation methodology. In this case, the Board was entitled to rely upon the time-adjusted value methodology as it had in 2011. The Board was deciding a question of mixed fact and law, for which leave to appeal is unavailable: St Albert Housing Society v St Albert (City) , 2014 ABQB 556 , 601 AR 63 at paras 32-35 .

Even if I am incorrect in this characterization, the basis for leave to appeal fails on both of the other two elements. 2. Sufficient Importance [ 50 ] Even if this issue could have been framed as a question of law, I find that it is not of sufficient importance to merit an appeal. [ 51 ] Although the Applicants make similar arguments in respect of this ground as with the Bylaw Adjustment, the difference is that this issue pertains to the Board’s weighing of the facts before it.

Given the unique fact scenario before the Board in this case, this issue is unlikely to be often replicated, to have broad application or to add meaningfully to the jurisprudence. 3. Reasonable Chance of Success [ 52 ] The Applicants assert that the Board acted unreasonably in that it departed from its 2010 and 2011 decisions without giving cogent reasons for doing so. In 2010, the Board accepted the Applicants’ FAR methodology and in 2011 it used the sale of 700 1st Ave SW as the best indicator of value.

The Applicants acknowledge that administrative tribunals are not bound by prior decisions, but argue that failure to give reasons for departing from a prior decision with similar evidence renders a decision unreasonable. [ 53 ] In its 2012 decision, the CARB rejected the FAR methodology, finding that a residential use focused view was necessary, as was more data regarding similar properties.

It is worth noting that the Board also refused to apply FAR in 2011, holding that it was not appropriate to measure dissimilar properties and did not address all property characteristics (e.g. proximity to the river and associated public spaces). Although the Board found the 700 1st Ave SW property reflected the characteristics of the subjects’ location and associated influences and thus a reliable value indicator, the Board went on to base its determination on a time-adjusted basis, relying on this property as an appropriate market value indicator as of July 1, 2010.

It found a base land rate of $215 plus the 5% corner lot influence resulted in a vacant land rate of $225. In its 2012 decision, the CARB considered this very evidence in the comparable (time- adjusted) analysis, relying on this valuation to come to its ultimate determination. The difference from the 2011 decision primarily being that the Board declined a further reduction to this valuation as there was insufficient evidence that the drop in land values from 2011 to 2012 affected the subject lands.

I will address the 2011-2012 market decline further in respect of the annual assessment issue below. [ 54 ] Thus in 2011, even with the inclusion of the additional data point (the 2007 sale value of 700 1st Ave SW), the Board relied on the time-adjusted valuation. The Board’s rejection in 2012 of the FAR methodology (in favour of the time-adjusted valuation) falls within the range of acceptable outcomes, regardless of whether the 2007 sale value of the 700 1st Ave SW property was considered in arriving at that conclusion. 4.

Conclusion [ 55 ] As not all the elements of the test are satisfied, leave to appeal on this issue is denied. C. Annual Assessment [ 56 ] The final ground on which the Applicants seek leave to appeal is that, by accepting the City’s decision to carry forward a land value from a prior year, the CARB failed to adhere to the appropriate legal requirements. Under ss. 285 and 289 of the MGA , property assessments must be conducted as an annual exercise.

Further, s. 289(2) of the MGA specifies that a property’s characteristics and physical condition as at December 31 of the assessment year are to form the basis of the assessment. The Applicants say this includes the effect of the development restrictions and demonstrated market decline between 2011 and 2012. [ 57 ] The Applicants also argue that the City carried forward the prior year’s land value, including a 5% addition for corner lot

influence and that the Board added an additional 5% corner lot amount, effectively assessing that 5% variation twice. 1. Question of Law or Jurisdiction [ 58 ] The CARB found at para 33 that the vacant land value for Eau Claire for 2011 was $225 per sq ft.

With respect to valuations of lands in surrounding zones, it found that “while the value difference does appear to reflect a drop in values from 2011 to 2012,” there was “insufficient evidence produced to show that [the subject] land values dropped further from 2011 to 2012.” Due to the lack of sales in the subject area, it accepted the “comment from the City that they simply carried forward the 2011 CARB decision rates for the 2012 valuation.” The Applicants assert this is an error of law in failing to comply with the MGA requirement that each municipality “prepare annually an assessment for each property in the municipality.” [ 59 ] At issue is whether the steps taken by the City constitute an assessment exercise for the 2012 year, satisfying the MGA provisions, and whether the assessment reflects

a) the characteristics and physical condition of the property on Dec 31 of the prior year, and

b) the valuation and other standards set out in the regulations for that property. This raises the question of what information the City is required to consider and what analysis the City is required to undertake in order to satisfy the annual assessment mandate. [ 60 ] The MGA does not prescribe what may be taken into account in a property’s “characteristics” or “physical condition” but, as a general guideline for the limited purpose of a leave application, I would read this to mean anything that affects the value of the specific property for assessment purposes.

Applicable development restrictions would fall within this definition. It is less clear that demonstrated market decline would be included unless it can be established that the decline applies to the subject properties. [ 61 ] With this in mind, I am of the view that merely carrying forward the 2011 valuation, without more, would violate the requirements of the MGA . [ 62 ] The City notes that the CARB’s powers under s. 467 of the MGA do not entitle it to make a declaration that the City has not prepared an assessment for a given year. Such a determination, it argues, is outside the CARB’s jurisdiction.

In this case, however, unlike Eco-Industrial Business Park Inc. v City of Edmonton , 2014 ABQB 421 , the CARB was not asked to make such a determination. Rather, the question is whether it erred in law by accepting the City’s methodology of merely carrying forward the 2011 assessment. [ 63 ] Despite the words used in its decision, however, it is not clear to me that the Board merely carried forward the 2011 valuation. As discussed above, the Board considered all of the methods of valuation proposed by the Applicants. It expressly rejected the Bylaw Adjustment as a component of the 2012 valuation.

The 2011 assessment was based on a time-adjusted valuation of the closest property to the subject lands (in fact – one of the subject lands). The Board also considered general information regarding a market decline from 2011 to 2012 although, due to the lack of current sales information, it was not persuaded that such decline should be taken into account in valuing the subject properties; a reduction was therefore not applied to further alter the 2011 time-adjusted valuation. [ 64 ] The Board made findings of fact after weighing the evidence before it.

While there may have been errors in how the City and subsequently the Board arrived at the final assessment values, I am mindful that the Court is not to be used for error correction. Further, I am cognizant of the Board’s authority to control its own process and to determine what evidence is relevant. This is a question of mixed fact and law, an appeal of which is beyond this Court’s jurisdiction. [ 65 ] With respect to the duplicate application of the corner lot adjustment, I am of the view that, on the unique facts of this case, this too is a question of mixed fact and law.

It is therefore beyond the scope of appeal. 2. Sufficient Importance [ 66 ] Had I found that the CARB had simply accepted the carrying forward of a prior year’s land value without further consideration, I would have concluded that the Board had erred in law. I am satisfied that such an error in approach would have broad application to CARB reviews generally. Further, the obligation on the CARB when such requirement is not met in the initial assessment is an issue of general importance with significant jurisprudential value and therefore would have been worthy of appellate review.

Accordingly, had this been a question of law, I would have found that it was of sufficient importance to merit an appeal. [ 67 ] By contrast, the alleged misapplication of the 5% corner lot adjustment is best characterized as a matter of error correction for which this Court ought not grant leave to appeal: Terroco at para 18. 3.

Reasonable Chance of Success [ 68 ] The issues in respect of annual assessment are first, whether the Board properly interpreted the annual assessment requirement in ss. 285 and 289 of the MGA , and second, whether the Board considered or should have considered market decline or the Bylaw Adjustment as “characteristics” of the property. As both of these issues engage the

interpretation of the MGA , the question in respect of this element of the test is whether the Board’s decision was reasonable. A related issue is the treatment of the corner lot influence. [ 69 ] As noted above, the Board accepted the City’s decision to carry forward the 2011 valuation and to add 5% for corner lot influence to four of the subject properties. The Board found that there was not sufficient evidence to establish a decline in values from 2011 to 2012. The City argues this was not merely a carry forward of the 2011 assessment.

Rather, the Board reviewed the assessments of the properties and came to the conclusion that the 2011 value was still appropriate. [ 70 ] Notwithstanding that the Board conceded that property values in the surrounding areas generally had decreased from 2011- 2012, it declined to apply a further reduction to the subject properties as it did not find sufficient evidence to support such further reduction.

The City asserts that the factors the Applicant put forward to substantiate a reduction in value were considered and then dismissed by the Board due to insufficient evidence; the Applicant argues they were not considered at all. I find that the Board weighed the evidence before it and that its conclusion falls within the range of reasonable outcomes. The fact that the Board applied the corner lot

adjustment, albeit erroneously, supports the assertion that it evaluated the property’s characteristics for the current year. Although this may not have resulted in the correct outcome with respect to corner lot influence, that aspect of the Board’s decision is outside the scope of leave to appeal on the basis of the other grounds.

Further, as noted above, this Court is not to allow leave to appeal a decision of the CARB for the purpose of error correction. [ 71 ] Treatment of the corner lot influence aside and subject to the issue around the Bylaw Adjustment for which this Court has granted leave, given the deference to be afforded to the CARB in these circumstances, its decision with respect to the annual assessment and the factors to be considered in that analysis falls within the range of possible, acceptable and rational outcomes which are defensible in respect of the facts and law. 4.

Conclusion [ 72 ] As not all of the elements of the test have been met, the Court denies leave on this issue. VI. Conclusion [ 73 ] The Court grants leave to appeal only on the following issue: Whether the CARB erred in law or jurisdiction by making its determination regarding the Bylaw Adjustment in the absence of evidence from the City as to the reason for the discontinuance of that adjustment. [ 74 ] The Court dismisses all other bases for appeal. [ 75 ] No member of CARB is liable for costs in an application to leave to appeal or the appeal: MGA 470.1(3).

As between the City and the Applicants, the costs for this leave application shall be in the cause of the appeal. Dated at the City of Calgary, Alberta this 28 th day of February, 2017. C. Dario J.C.Q.B.A. Appearances: Gilbert J. Ludwig, Q.C./Wilson Laycraft for the Applicants Nathan Irving/City of Calgary Law Department for the Respondent/the City of Calgary Shaun C. Fluker/Janke Law Office for the Respondent/Calgary Composite Assessment Review Board