Anthem Riverfront Holdings v Calgary (City), 2017 ABQB 356

Court of Queen’s Bench of Alberta Citation: Anthem Riverfront Holdings v Calgary (City), 2017 ABQB 356 Date: 20170531 Docket: 1501 09727 Registry: Calgary Between: Anthem Riverfront Land Holdings Ltd. Applicant - and - The City of Calgary Respondent - and - The Calgary Assessment Review Board Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice W.A. Tilleman _______________________________________________________ I. Introduction [ 1 ] The Applicant, Anthem Riverfront Land Holdings Ltd. (“Anthem”), seeks leave to appeal Decision No.

CARB 82529P- 2015 (the “Decision”) of the Calgary Assessment Review Board (“CARB” or the “Board”). II. Facts [ 2 ] The Decision pertains to three properties (collectively, the “Properties”) at the north end of downtown Calgary: 208 Riverfront Ave. SW (“208”), 222 Riverfront Ave SW (“222”) and 102 2 St. SW (“102”). [ 3 ] On January 5, 2015, the City of Calgary (the “City”) issued property assessment notices for the Properties, assessing them at

$35,790,000 for 208, $21,660,000 for 222 and $23,780,000 for 102. All of the Properties were assessed using the sales comparison method, land value only, at a rate of $450 per square foot. [ 4 ] Anthem filed a complaint respecting these assessments pursuant to s. 460 of the Municipal Government Act , RSA 2000, c M- 26 (“ MGA ”). [ 5 ] The Board heard Anthem’s complaint on June 29 and 30, 2015 and issued the Decision on July 29, 2015 confirming the assessments. III. The Legislative Framework [ 6 ] Municipal property tax assessments are governed by the MGA and the regulations thereunder.

Recent amendments to the MGA do not apply to this application as it was filed prior to the coming into force of those amendments. [ 7 ] The MGA requires assessments to be prepared in accordance with certain valuation standards and procedures: 293(1) In preparing an assessment, the assessor must, in a fair and equitable manner, (

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

b) follow the procedures set out in the regulations. [ 8 ] The valuation standard is market value, defined in s. 1 (

a) of the MGA as “the amount that a property ... might be expected to realize if it is sole on the open market by a willing seller to a willing buyer.” [ 9 ] The Matters Relating to Assessment and Taxation Regulation , Alta Reg 220/2004 (“ MRAT ”) provides the standards for market value assessments: 2 An assessment based on market value (

a) must be prepared using mass appraisal, (

b) must be an estimate of the value of the fee simple estate in the property, and (

c) must reflect typical market conditions for properties similar to that property. [ 10 ] The MRAT defines “mass appraisal” as “...the process of preparing assessments for a group of properties using standard methods and common data and allowing for statistical testing.” IV. Issues [ 11 ] Anthem advances four grounds for leave to appeal: 1. The Board erred in law by failing to consider the effect of development restrictions on the market value of the Properties. 2. The Board erred in law by failing to assess the Properties using mass appraisal. 3.

The Board erred in law by failing to apply or consider the legal principle that taxpayers are entitled to an equitable market value assessment. 4. The Board erred in law by failing to provide adequate reasons for the Decision. [ 12 ] Anthem acknowledges that its fourth ground, inadequate reasons, is not a stand-alone ground for leave to appeal. V. Test [ 13 ] In reviewing an assessment, the CARB is bound by s. 467(3) of the MGA : 467(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. [ 14 ] It is common ground that the test for leave to appeal is set forth in s. 470(5) of the MGA :

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. [15] The law in respect of what constitutes a question of law or jurisdiction for this purpose recently was summarized as follows byMadam Justice Dario of this Court in Concord Pacific Alberta Properties v Calgary (City), 2017 ABQB 138 at paras 13-15: All that is necessary at the leave stage is for the Applicants to establish that the Board may have made an error of law or jurisdiction:Associated Developers Ltd v Edmonton (City), 2011 ABQB 592, 527 AR 287 at para 6.

It is a strict rule that an appeal to this Court isavailable only on questions of law and jurisdiction: Canadian Natural Resources Ltd v Wood Buffalo (Regional Municipality), 2012ABQB 177, 535 AR 281 at para 109. Questions of law were characterized as follows by Madam Justice Nation in Altus Group Ltd v Calgary (Composite Assessment ReviewBoard), 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.

In Canada (Director of Investigation and Research, Competition Act) v Southam Inc., (SCC), [1997] 1 SCR 748, theSupreme Court of Canada considered when an error in assessing evidence amounts to an error of law. The Court held at para 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 of law, whilereaching the wrong conclusion after considering all such evidence is an error of mixed law and fact.

The Court went on at paras 43 and44 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] With respect to sufficient importance, the case law establishes that this must be assessed objectively, rather than being basedon the subjective importance of the matter to the applicant: 845971 Alberta Ltd v Grande Prairie (City) (Subdivision & DevelopmentAppeal Board), 2010 ABCA 135 at para 8.

Further, to be of sufficient importance, the question must be somehow novel or unsettled orof some jurisprudential importance: R v Terroco Industries Ltd, 2004 ABCA 159, 348 AR 96 at paras 18-19 and Edmonton (City) vEdmonton (Composite Assessment Review Board), 2012 ABQB 171, 535 AR 215 at para 11(h). Mere “error correction” will notsuffice. [17] Finally, assessing whether an appeal has a reasonable chance of success requires consideration of the appropriate standard ofreview. It is common ground on this application that decisions of the CARB involving

interpretation of its home statute, the MGA, arereviewed on the reasonableness standard: Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd, 2016 SCC 47. Mattersnot engaging

interpretation of the MGA may be subject to a correctness standard, as will matters falling within one of the exceptionsarticulated by the Supreme Court of Canada in Dunsmuir v New Brunswick, 2008 SCC 9, 1 SCR 190. VI. Analysis A. Question of Law or Jurisdiction [18] Anthem asserts, first, that the Board’s refusal to allow a reduction in the assessed value to account for developmentrestrictions constitutes an error of law. Its position is that the Board made a finding without evidence that development restrictions affectall downtown properties.

The City’s position is that the Board acknowledged the development restrictions but found that they were notunique and did not justify a reduction in value. The City argues that Anthem is challenging the Board’s weighing of the evidence, whichis a matter of mixed fact and law that is not available to appeal. [19] I find that Anthem’s position in this respect is without merit. The Board’s comments in respect of the development restrictionswere, in part, as follows: [Anthem] presented arguments for a 20% assessment reduction on the grounds that the DC restrictions on the subject property warrantedthis. ...

The Board accepted that these guidelines do represent restrictions relating to density and design. ... The Board does not acceptthat the restrictions imposed by the applicable DC zoning for the subject properties are any more unique than are restrictions – albeitperhaps of a different nature – than those placed on other properties in the downtown. The Board therefore does not accept that a 20%reduction in the assessment is justified. [20] These comments lead me to conclude that the Board did in fact consider the effect of the development restrictions of whichAnthem complains.

The Board cannot be said to have ignored those restrictions and its weighing of that evidence is not a question of lawor jurisdiction for which this Court may grant leave to appeal.

[ 21 ] Somewhat more troubling are the Board’s other comments about the effect of development restrictions: Thus restrictions and limitations on the use, density and building form are typically a normal part of the rules and guidelines for all properties in downtown Calgary. Property developers will take these “restrictions” into account and offset them with appropriate rental and sales rates. The Board will not attempt to question the guidelines that have been applied to the subject properties as no evidence was provided to explain them.

It must be assumed however that any potential purchasers of the subject properties would have exercised due diligence and made themselves fully aware of the regulations and guidelines affecting these properties. [ 22 ] Anthem points to these statements in support of its argument that the Board erred in law by basing its decision on assumptions, rather than evidence. Having carefully considered the statements in the context of the rest of the Board’s decision, I disagree.

I am satisfied that these comments reflect the Board’s experience in dealing with property valuation and were not decisive. [ 23 ] While the use of the phrases “no evidence was provided” and “must be assumed” is perhaps unfortunate, it should not be treated as definitive. The CARB is a specialized tribunal whose decisions are entitled to deference and the Court must refrain from parsing CARB decisions minutely and seizing upon particular language to found errors of law where none truly exist. I would contrast this case with the decision in Concord .

In that case, Justice Dario was satisfied that the CARB might have based its decision on matters it was “left to surmise”. In this case, I find that the Board’s decision was based on the evidence before it, rather than on any assumptions the Board may have made. [ 24 ] Anthem’s second alleged error of law is the Board’s reliance on the single sales comparable provided by the City. Anthem argues that this comparable was not an open market sale and did not represent market value. Accordingly, it was an error for the Board to rely on it in confirming the assessments. Anthem asserts that the Board’s

interpretation of “market value” and “mass appraisal” is a question of law. Further, Anthem submits that, by relying on the impugned comparable, the Board permitted an arbitrary assessment, which is also an error of law. [ 25 ] For its part, the City notes that whether an assessment reflects market value is an issue in all CARB hearings and argues that resolution of that issue involves the weighing of evidence. As such, it is a question of mixed law and fact, rather than of law.

The City’s position is that it was open to the Board to put weight on the sales comparable evidence notwithstanding that the sale may not have been an open market sale. The City also argues that using only one comparable does not violate the principles of mass appraisal. [ 26 ] Again, I find no merit in Anthem’s position. In arriving at its decision, the Board is entitled, and indeed obliged, to weigh the evidence before it and determine whether the assessment reflects the market value of the property in question.

I note that the Board expressly stated that it had considered Anthem’s objection to the sales comparable proffered by the City and that it was aware that the comparable might not represent an open market sale. In my view, however, it does not follow that the Board could not put weight on that evidence in reviewing the assessment. The Board may consider whatever evidence is put before it and decide what, if any, weight to put on particular evidence.

That weighting is not subject to appeal to this Court. [ 27 ] Anthem notes that the sales comparable evidence was rejected by a different CARB panel the following year. As the City rightly points out, that is not relevant.

It is important to realize that different adjudicators will assign different weights to particular evidence; that is inherent in the process of weighing evidence and does not render a particular weighting an error of law. [ 28 ] Anthem’s third allegation is that the Board erred in law by failing to apply the legal principles that a taxpayer is entitled to an assessment that is equitable as compared to other similar properties and does not exceed actual or market value. [ 29 ] The thrust of this argument has to do with the location of the Properties. The assessment was based on the Properties being in Eau Claire.

Anthem asserts that the Properties are located in Chinatown, where property values are lower. Accordingly, it argues that the assessment is excessive, inequitable and therefore an error of law. [ 30 ] The City asserts that the location issue engages the Board’s findings of fact and is unassailable on appeal. It argues that Anthem conflates community location with market valuation zones and states that the City demonstrated to the Board that the Properties are treated by “market participants” as comparable to properties in Eau Claire.

The City also argues that the flaw in Anthem’s argument is illustrated by the fact that the City’s sales comparable property was also located in Chinatown on Anthem’s map. [ 31 ] In arriving at its conclusion, the Board made these comments on this issue: The question of location of the subject properties consumed a significant part of the Board’s hearing time. Maps and city documents provided by the Complainant clearly demonstrated that the subject properties are shown to be in Chinatown.

The location issue formed the Complainant’s main argument for seeking a reduction to the Chinatown land values of $215 per SF v. the $450 SF values in Eau Claire. The Respondent countered with evidence showing the properties to be in the Eau Claire District. In reviewing the material the Board noted that some evidence was based on Planning Department material while other evidence was from the Assessment Department which lead to confusion.

Ultimately the Board has taken the view that District identification is not crucial to the argument for a reduced assessment and that the only relevant matter is the 2012 sale comparison of the properties to the south, which, it is noted, would also be in Chinatown based on the Complainant’s map evidence.

The Board also took into account that while there was argument by the Complainant for a “Chinatown assessment”, every effort was being made to portray an Eau Claire location and image through the owner’s communication and sales efforts. [ 32 ] The Board also held that the two properties put forward as comparables by Anthem were not persuasive, saying: The Complainant focussed on two Chinatown properties to demonstrate the per SF price of $30. The Board was not convinced that these small commercial parcels were representative of a Chinatown buildable SF number given

a) the size of the parcels relative to the subject properties and

b) the location advantages/disadvantages of these parcels vs. the subject properties.

[33] It is clear from the material before me that the “boundaries” between various areas of the City of Calgary are neither static norrigid. A particular piece of property may fall within different areas for planning and assessment purposes. It is apparent that the Boardreviewed the evidence put before it and made its determination that the Properties were more similar to Eau Claire properties forassessment purposes.

That determination is based on evidence before it and thus is within the Board’s purview and cannot be challengedon appeal. [34] Finally, Anthem argues that the Board gave no, or at least inadequate, reasons for the Decision. Specifically, Anthem assertsthat: The Board erred in law by failing to give any reasons for its implicit determination that the Assessment was prepared in accordance withthe principles of market value and mass appraisal, that the Assessment is fair and equitable, that the Subject Properties were located inEau Claire, and that the applicable land rate is $450 per square foot.

In particular, the Board failed to provide reasons as to why itapproved the assessment based on the Comparable Sale, why it declined to determine the location of the Subject Properties, and why itrejected the buildable square foot analysis presented by Anthem Riverfront. Alternatively, the reasons for the Board’s decision on thesepoints are inadequate. [35] The City disputes that the Board failed to provide reasons.

It argues that while failure to provide any reasons at all may be anerror of law, if some reasons are given, the court should review those reasons for reasonableness. [36] The parties are agreed that inadequate reasons is not a standalone ground for leave to appeal. Therefore, in light of myconclusions above on Anthem’s other alleged errors of law, it is not necessary for me to decide this point. Nevertheless, I am satisfiedthat there is little merit to this argument. In my view, the Board did provide reasons for its decision on the various points enumerated byAnthem.

The City pointed to this comment from the Supreme Court of Canada in Newfoundland and Labrador Nurses’ Union vNewfoundland and Labrador, 2011 SCC 62, 3 SCR 708 at para 16: Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would havepreferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis. A decision-maker isnot required to make an explicit finding on each constitutent element, however subordinate, leading to its final conclusion (ServiceEmployees’ International Union, Local No. 333 v.

Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382, atp. 391). In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it todetermine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met. [37] I find that the Board’s reasons for the Decision are in accordance with this standard. As noted in my analysis above, the Boardaddressed and gave reasons for its findings on the points raised before me by Anthem. The Board’s reasons were not perfect, butperfection is not the standard. B.

Sufficient Importance [38] None of the parties devoted much argument to this element of the test for leave to appeal. That may be because, asMichalyshyn J of this Court said in Edmonton East (Capilano) Shopping Centres Limited (AEC International Inc) v Edmonton (City),2012 ABQB 445 at para 23, “...in the decided cases to date this requirement appears to be the least onerous to overcome.” [39] In their submissions, both the City and the Board took the position that recent amendments to the MGA had no impact on thecontent or application of the sufficient importance test.

Anthem does not appear to take issue with that position. [40] Anthem’s argument is that failure to consider development restrictions in assessing property will have wide-rangingimplications for all municipal taxpayers whose property is subject to such restrictions.

This is similar to the argument that was madebefore Justice Dario in Concord, which she addressed as follows at para 28: ...determining whether the Board can make its decision based on facts not in evidence or is entitled to make a fact finding in opposition tothe only evidence before it is, in my view, of objective importance, including in understanding the scope of the Board’s discretion. I findthis issue is of sufficient importance to merit an appeal. [41] The difficulty in considering this element of the test is that it depends very much on the characterization of the issue.

If, asAnthem posits, the issue is whether the Board may affirm an assessment without considering the evidence before it, that is a matter ofobjective importance to any taxpayer who might come before such a board. If, on the other hand, the question is whether the Propertiesshould have been assessed at a lower value because of the development restrictions, that is not of sufficient objective importancenotwithstanding its subjective importance to Anthem.

Moreover, granting leave to appeal on the latter question would amount toimpermissible error correction, contrary to the Court of Appeal’s direction in R v Terroco Industries Ltd, 2004 ABCA 159, 348 AR 96at paras 18-19. [42] As I have found that all of the grounds argued by Anthem pertain to the Board’s weighing of evidence and are not errors oflaw or jurisdiction, it is not strictly necessary for me to address the element of sufficient importance. Nevertheless, I find that none of theissues Anthem raises are sufficient to meet the test under this element.

There is nothing in them that is novel or unsettled or ofjurisprudential importance. C. Reasonable Chance of Success [43] The parties are agreed that all of the grounds of appeal raised by Anthem are matters engaging the Board’s

interpretation ofits home statute, the MGA. Accordingly, review of the Decision in respect of all the issues before me is on a standard of reasonableness.That being the case, the Supreme Court of Canada held in Dunsmuir at para 47 that the decision must fall “...within a range of possible,acceptable outcomes which are defensible in respect of the facts and law.” That same paragraph tells us that “...reasonableness isconcerned mostly with the existence of justification, transparency and intelligibility within the decision-making process.”

[ 44 ] Not surprisingly, Anthem argues in respect of each of its alleged grounds of appeal that the Decision does not fall within the range of acceptable outcomes.

Anthem’s submissions in its brief on its three grounds of appeal are as follows: The Board’s refusal to consider the effect of the development restrictions on the market value of the Subject Property, or in the alternative its misapprehension of the evidence regarding the effect of such restrictions on market value, does not fall within the range of possible and acceptable outcomes that are defensible in respect of the law and the facts that were before it. ... Anthem Riverfront brought evidence that the Assessment was prepared contrary to

section 2 of MRAT , and the Board agreed that the single Comparable Sale used by the City to establish market value may not have been concluded, and would not meet the definition of a market value sale. For the foregoing reasons, the Board’s misinterpretation of

section 2 of MRAT does not fall within the range of possible and acceptable outcomes that are defensible in respect of the law and the facts, and the Reasons contain no line of analysis that could reasonably lead the Board from the evidence before it to the conclusion at which it arrived. ...

Further, a review of the evidence and submissions presented to the Board, which clearly demonstrate that the Subject Properties are located in Chinatown, demonstrates that the Decision does not fall “within the range of possible, acceptable outcomes which are defensible in respect of the facts and the law.” [ 45 ] The City’s position is that each of these three issues engages the Board’s weighing of the evidence before it.

As a reviewing court is not to substitute its own weighing of the evidence for that of the Board, the City argues that this appeal has no reasonable chance of success. [ 46 ] I find that the grounds advanced for this appeal have no reasonable chance of success. Each of them pertains to the Board’s consideration of the evidence before it, rather than to an absence of evidence as posited by Anthem. [ 47 ] Certainly, another board faced with the same evidence might have arrived at a different conclusion.

Indeed, in the year following the one at issue in this application, a different CARB panel accepted the valuation methodology advocated by Anthem. The City points out that there is no duty for various panels of the CARB to be consistent with one another; see Metrowest Developments Ltd v Calgary (Assessment Review Board) , 2014 ABQB 450 . It argues that such differences of opinion are inherent in the MGA ’s requirement for annual assessment. I agree. Consistency among Board decisions is not to be expected, as stare decisis does not apply to the Board and different panels may weigh evidence differently.

Given this, it stands to reason that different panels may arrive at different conclusions. That neither undermines the Decision nor increases the chance of success on appeal. Certainly, the Board’s

interpretation of the MGA must be reasonable and the Court will intervene if a decision is irreconcilable with the statute. That, however, is not the case here. VII. Conclusion [ 48 ] In light of the foregoing analysis, leave to appeal the Decision is refused. [ 49 ] The parties may speak to costs. Heard on the 6 th day of February, 2017. Dated at the City of Calgary, Alberta this 31 st day of May, 2017. W.A. Tilleman J.C.Q.B.A. Appearances: Kelsey Meyer Bennett Jones LLP

for the Applicant, Anthem Riverfront Holdings Ltd. Andrea A. Cole City of Calgary Law Department for the Respondent, The City of Calgary Michael Janke Janke Law Office for the Respondent, The Calgary Assessment Review Board