Baramy Investments Ltd v Edmonton (City), 2017 ABQB 450

Court of Queen’s Bench of Alberta Citation: Baramy Investments Ltd v Edmonton (City), 2017 ABQB 450 Date: 20170720 Docket: 1603 17643 Registry: Edmonton Between: Baramy Investments Ltd., Mildred Yuzyk and Jeanette Kitt all as represented by MNP LLP Applicants - and - The City of Edmonton and The Edmonton Composite Assessment Review Board Respondents _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice John T.

Henderson _______________________________________________________ I Introduction [ 1 ] The Applicants challenge three decisions of the Edmonton Composite Assessment Review Board (CARB) in relation to three land parcels located within the City of Edmonton (City). [ 2 ] The City assessed the lands and produced Assessment Detail Reports in relation to each of the parcels. Those reports notified the Applicants of various determinations, including: (

i) the assessment value of each of the parcels of land, and (ii) the classification of the lands. [ 3 ] Following receipt of the Assessment Detail Reports, the Applicants complained to CARB that the assessment process used

by the City did not follow the process mandated by the Municipal Government Act , RSA 2000, c M-26 ( MGA ) and the relevant regulations, the Matters Relating to Assessment and Taxation Regulation , Alta Reg 220/2004 ( MRAT ). All references to the MGA and MRAT in these Reasons are to the legislative provisions which were in force at the relevant times. [ 4 ] CARB dismissed the complaints in each case with written reasons dated September 6, 2016. II Preliminary Issue [ 5 ] On this motion, the Applicants seek:

a) permission to appeal;

b) that the appeal be allowed, the impugned decisions be cancelled, and the matters returned to a new panel of the C ARB for consideration in accordance with the direction of the C ourt;

c) in the alternative, an order allowing the judicial review application and an order in the nature of a declaration that the three properties be classified as farm land; and

d) costs. [ 6 ] In Associated Developers Ltd v Edmonton (City) , 2011 ABQB 592 , 527 AR 287 ( Associated Developers ), Ross J. considered an application for leave to appeal, as well as an appeal, and judicial review, of a CARB decision. At paragraphs 25 to 26, she concluded that it is preferable that a leave application and the appeal on the merits be heard separately, even though there is no express prohibition against hearing them together. She opined that the leave application and the appeal could be heard on the same application where:

a) the entire record is before the Court,

b) the Court accepts the questions of law addressed by the parties, and

c) there are no other respondents who should be added to the appeal. [ 7 ] In the present case, the Applicants invite me to deal with both the application for permission to appeal and, if such permission is granted, the appeal itself. CARB objects to proceeding with the merits of the appeal on this application because the entire record is not before the Court. If leave is granted, it will need to prepare a complete record for the appeal, including a recording of the proceedings before it.

As well, the City and CARB submitted that until leave is granted, the parties do not know how the issues on the appeal will be framed. [ 8 ] As the complete record is not before the Court, I conclude that it is not appropriate to consider the merits of the appeal even if permission to appeal is granted. [ 9 ] Ross J. in Associated Developers also concluded that judicial review should only be considered after the leave application and only in circumstances where the Court finds that no question of law or jurisdiction has been raised.

CARB and the City objected to any consideration of judicial review on this application and the Applicants did not proceed with argument on that point. [ 10 ] Therefore, these Reasons will address the single issue of whether permission to appeal should be granted from the three CARB decisions dated September 6, 2016.

III Description of the Properties [ 11 ] This application concerns the following three land parcels: Address Nature of Property Size Owners 2750-91 Street Vacant 10.66 acres Baramy Investments Ltd. 2890-91 Street Vacant 11.864 acres Baramy Investments Ltd. 19060-118A Avenue Farmstead with farm house 15.611 acres M. Yuzyk and J. Kitt [ 12 ] The two properties on 91 st Street (91 st Street Parcels) are undeveloped. They are immediately adjacent to each other and are in turn immediately adjacent to a Costco Wholesale store in the Parsons Industrial area of Edmonton.

The lands are vacant with no improvements and are zoned DC2 (Comprehensively Planned Development District). At the relevant times, both parcels were cultivated and were being used to grow hay pursuant to a “Farm Lease Agreement” dated July 16, 2013 between the Applicant, Baramy Investments Ltd., and Dave Stelter, which contemplated an annual lease payment of $1.00 plus GST. [ 13 ] The parcel on 118A Avenue (118A Avenue Parcel) is very close to the intersection of the Yellowhead Freeway and Anthony Henday Drive in the City of Edmonton in the White Industrial area.

The parcel is zoned IM (Medium Industrial) and is immediately adjacent to the All Weather Windows plant and a Cliffs Towing facility. This parcel has a farm house which was built in 1925. It is not disputed that these lands were being cultivated for agricultural purposes at the relevant times. IV Assessment and Classification by the City and CARB

A 91 st Street Parcels 1 Assessment Value [ 14 ] The two 91 st Street Parcels were dealt with in the same manner by the City Assessor. Ultimately, the assessment value of the two parcels was determined to be $3,005,500 and $3,006,000. [ 15 ] The assessment process mandated by the MGA requires that the City assign the property to one or more assessment classes as outlined in s 297(1) of the MGA : 297(1) When preparing an assessment of property, the assessor must assign one or more of the following assessment classes to the property: (

a) class 1 - residential; (

b) class 2 - non-residential; (

c) class 3 - farm land; (

d) class 4 - machinery and equipment. [ 16 ] “Farm land” is defined in s 297(4)(

a) as “land used for farming operations as defined in the regulations”. “Farming Operations” is defined in s 1(

i) of MRAT to mean “the raising, production and sale of agricultural products and includes (

i) horticulture ...” [ 17 ] The City conceded that both of the 91 st Street Parcels were being used for agricultural purposes. [ 18 ] The assessment value of property is determined in accordance with s 4 of MRAT which provides for two valuation standards: (

a) market value or (

b) if the parcel is used for farming operations, agricultural use value. [ 19 ] As a result of s 4 of MRAT , the two valuation standards are applied in the following way: • General Rule - All municipal property other than property "used for farming operations" must be assessed using a market value approach; • Special Valuation for Farm Land - Property "used for farming operations" must be assessed using the "agricultural use value" as the valuation standard.

This involves the application of the procedures set out in the Alberta Farm Land Assessment Minister' Guidelines ; • Exception to Farm Land Valuation - The application of "agricultural use value" as the valuation standard for farm land is subject to the exception contained in s 4(3)(

d) of MRAT which requires that where farm land can be serviced by water and sewer distribution lines, a 3 acre parcel of the farm lands must be valued at market value and not based on "agricultural use value". This provision was referred to by the parties as the "3 Acre Carve Out". [ 20 ] Both of the 91 st Street Parcels were capable of being serviced by water and sewer distribution lines. Therefore, the City invoked the 3 Acre Carve Out provisions in relation to each of the 91 st Street Parcels. It used the market value approach to value both of the 3 acre parcels.

The remaining portions of the lands (7.66 acres and 8.86 acres respectively) were valued based on “agricultural use value”. [ 21 ] After some adjustments by CARB, which are not in issue on this application, the valuation methodology resulted in assessment values calculated by CARB as follows: 2750-91 Street 2890-91 Street 3 Acre Carve Out (at market value) $3,058,500 $3,058,500 7.66 acres (agricultural use value) 2,442 8.86 acres (agricultural use value) 2,822 Less 1.8% discount (lack of curb/gutter) (55,097) (55,104) Total $3,005,845 $3,006,218 Assessment Value (rounded) $3,005,500 $3,006,000 [ 22 ] The Applicant, Baramy Investments Ltd., does not take issue with the assessment values for the 91 st Street Parcels. 2 Classification

[ 23 ] In addition to calculating the assessment values of the 91 st Street Parcels, the City assigned each of the two parcels to assessment classes in the following manner: 99% commercial (non-residential) 1% farm land [ 24 ] The assignment to these assessment classes had a dramatic impact on the municipal tax payable in relation to the 91 st Street Parcels. Edmonton City Council is required by s 353 of the MGA to pass a bylaw annually to set the tax rate for each assessment class. In 2016, Bylaw 17532 set the municipal tax rates.

The tax rate applicable to commercial (non-residential) land was set at approximately three times greater than the tax rate applicable to farm land. [ 25 ] The Applicant, Baramy Investments Ltd., complained to CARB in relation to the classification of the two parcels.

It argued that the 91 st Street Parcels were being used for farming purposes and therefore 100% of both parcels should have been classified as “farm land” and subject to the lower tax rate. [ 26 ] The City submitted to CARB that the classification of the 3 acre parcels as commercial (non-residential) was proper and consistent with prior decisions of CARB.

The City further noted that s 297 of MGA permits it to assign a single parcel of property to more than one classification. [ 27 ] CARB concluded the parcels had been properly classified by the City, stating in its reasons in relation to 2750-91 Street (which for all practical purposes are identical to the reasons in relation to 2890-91 Street): The Board finds that the three acre parcel is properly classified as non-residential as per MGA s 297(1)(b) (see appendix). The definition for "farmland" in s 297(4)(

a) means land used for farming operations as defined in the regulations and (4)(b) "non-residential" means linear property, components of manufacturing or processing facilities that are used for the cogeneration of power or other property on which industry, commerce or another use takes place or is permitted to take place under a land use bylaw passed by council , but does not include farm land or land that is used or intended to be used for permanent living accommodation. 0 The Board finds that both the MGA and MRAT must be read together and is satisfied that the Respondent has assessed the subject lands in accordance with the legislation as non​residential land.

The Board finds it does not have jurisdiction to alter the City's Land Use Codes as stipulated in their bylaws. (emphasis included in CARB reasons) [ 28 ] Baramy Investments Ltd. seeks permission to appeal from the decisions of CARB in relation to the classifications of these two parcels. B 118 A Avenue Parcel 1 Assessment Value [ 29 ] The assessment value of the 118A Avenue Parcel was determined in a manner similar to the 91 st Street Parcels.

It was ultimately determined to have an assessment value of $1,610,000. [ 30 ] As was the case in relation to the 91 st Street Parcels, the City invoked the 3 Acre Carve Out provisions contained in s 4(3) of MRAT to determine the valuation standards to be applied to the parcel. Unlike the 91 st Street Parcels, the City carved out two separate 3 acre parcels from the 118A Avenue Parcel, both of which were assessed at market value. The balance of the land was assessed as farm land. The City justified carving out two separate 3 acre parcels on the basis of the express wording of s 4 of MRAT .

It argued before CARB that one 3 Acre Carve Out was required pursuant to s 4(3)(

c) because the lands contained a residence which was capable of being occupied. It argued that a second 3 Acre Carve Out was required pursuant to s 4(3)(

d) because the lands can be serviced by using water and sewer distribution lines. [ 31 ] The relevant portions of s 4 of MRAT are as follows: 4(1) The valuation standard for a parcel of land is (

a) market value, or (

b) if the parcel is used for farming operations, agricultural use value.

(2) In preparing an assessment for a parcel of land based on agricultural use value, the assessor must follow the procedures set out in the Alberta Farm Land Assessment Minister’s Guidelines.

(3) Despite subsection (1)(b), the valuation standard for the following property is market value: ...(

c) an area of 3 acres located within a larger parcel of land where any part of the larger parcel is used but not necessarily occupied for residential purposes; (

d) an area of 3 acres that

(

i) is located within a parcel of land, and (iii) can be serviced by using water and sewer distribution lines located in land that is adjacent to the parcel...

(4) An area referred to in subsection (3)(c), (d), (

e) or (

f) must be assessed as if it is a parcel of land. [ 32 ] The Applicants, Mildred Yuzyk and Jeanette Kit, acknowledged before CARB that it was appropriate to apply one 3 Acre Carve Out to be assessed at market value but argued that a second 3 Acre Carve Out was not permitted by the MRAT . They argued that ss 4(3)(

c) and (

d) are mutually exclusive and only one 3 Acre Carve Out was permitted on a proper

interpretation of the MRAT . [ 33 ] CARB concluded that on a proper

interpretation of the MRAT , two separate 3 Acre Carve Outs for assessment at market value were permitted, explaining as follows: 0 The Board considered the primary issue presented by the Complainant with regard to the incorrect market value assessment of two 3 acre parcels rather than the one 3 acre parcel as per Matters Relating to Assessment and Taxation Regulations, ( MRAT ) AR 220/2004. Section 4(1) states that the valuation standard for a parcel of land is (

a) market value, or (

b) if the parcel is used for farming operations, agricultural use value. Section 4(3) states that despite subsection (l)(b), the valuation standard for the following property is market value: (

c) an area of 3 acres located within a larger parcel of land where any part of the larger parcel is used but not necessarily occupied for residential purposes. This is the three acre parcel the Complainant accepts as being assessed at market value as it is the standard three acres upon which the farmhouse is located. 0 The Board however notes that the legislation further stipulates in MRAT 4 (3) despite subsection (l)(

b) that the valuation for a property is market value (

d) an area of 3 acres that (

i) is located within a parcel of land, and (ii) can be serviced by using water and sewer distribution lines located in land that is adjacent to the parcel. The Board agrees with the Respondent' s

interpretation of the legislation that allows the City to assess this second three acre parcel at market value because MRAT (4) states that an area D referred to in subsection (3)(c), (d), (

e) or (

f) must be assessed as if it is a parcel of land. [ 34 ] The Applicants, Mildred Yuzyk and Jeanette Kit, seek permission to appeal from the decision of CARB which permitted two separate 3 Acre Carve Outs, both of which were assessed at market value. 2 Classification [ 35 ] After calculating the assessment values of the 118A Avenue parcel, the City assigned the parcel to assessment classes in the following manner: 67% commercial (non-residential) 1% farm land 32% residential [ 36 ] The 2016 City Bylaw 17532 fixed the tax rate for residential and farm land at the same rate.

The tax rate for non-residential lands was set at approximately three times higher than the rate applicable to residential and farm land.

As a result, the classification of the 118A Avenue Parcel had a significant impact on the amount of municipal tax payable in relation to the parcel. [ 37 ] The Applicants argued before CARB that the 118A Avenue Parcel is farmed and should be classified as residential and farm land without any portion of the lands being classified as non-residential. [ 38 ] Consistent with its argument in relation to the 91 st Street Parcels, the City submitted to CARB that the classification of one of the 3 Acre Parcels as commercial (non-residential) was proper and consistent with prior decisions of CARB.

The City further noted that s 297 of the MGA permits it to assign a single parcel of property to more than one classification. [ 39 ] CARB agreed that the portion of the property containing the residence was properly the subject of one 3 Acre Carve Out, and that a second 3 Acre Carve Out was allowable and was properly classified as vacant non-residential, explaining as follows: Th e MGA allows a council to create bylaws in s 297(2) to (

b) divide class 2 into subclasses such as vacant or improved nonresidential. Furthermore the assessor may assign one or more subclasses to a property. The Board finds that the second three acre parcel is properly classified as vacant nonresidential land. The more specific LUC of "823 Non-farmland vacant" is not within the Board's jurisdiction to alter. [ 40 ] The Applicants, Mildred Yuzyk and Jeanette Kit, seek permission to appeal from the classification of the 118A Avenue Parcel. V Proposed Grounds of Appeal

[ 41 ] The Applicants propose that they be permitted to appeal from the decisions of the CARB on the following issues: A. Did CARB err in allowing farm land to be classified under s 297 of the MGA as non-residential land? B. Did CARB err in interpreting s 4 of MRAT to permit the assessment of more than one 3 acre parcel at market value? C. Did CARB err and fetter its discretion in finding it did not have jurisdiction to modify the class?

VI Test for Granting Permission to Appeal [ 42 ] An appeal from a decision of CARB may be brought to this Court only if the appellant first obtains permission to appeal which must be brought within 30 days of receiving the CARB decision in accordance with s 470(3) of the MGA .

Pursuant to ss 470(5), the Court may grant permission to appeal only if: i. the appeal involves a question of law or jurisdiction, ii. the appeal is of sufficient importance to merit an appeal, and iii. the appeal has a reasonable chance of success. [ 43 ] This Court listed the fundamental principles regarding s 470 and applications for leave to appeal in Edmonton v Edmonton (Composite Assessment Review Board) , 2012 ABQB 171 , [2012] AJ No 281 at para 11 . They were subsequently summarized in Eau Claire Market Inc v Calgary (City) , 2015 ABQB 131 , [2015] AJ No 227 at para 10 .

Those principles include the following: • The onus rests with an applicant to establish the three-part test. • Any reasonably arguable point of law or jurisdiction must also be capable of affecting the result. • 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.

Where there is 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; 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. • As a specialized tribunal, CARB's decisions are given deference for factual findings, exercise of discretion, questions of policy, and for questions of law that call upon its expertise, including the

interpretation of its home statute. • An issue may be of sufficient importance to merit an appeal if it is important for jurisprudential purposes. Importance is determined on an objective scale. Generally, there should be something unsettled about the question, or the decision should have wide ranging implications. • Inadequacy of reasons for a decision does not constitute a stand alone ground for appeal; rather, it goes to the reasonableness of the decision.

VII Analysis A Did CARB err in allowing farm land to be classified under s 297 of the MGA as non-residential land? [ 44 ] This proposed ground of appeal relates to all three parcels which are the subject of this application. 1 Is this a Question of Law or Jurisdiction? [ 45 ] This proposed ground involves the

interpretation of s 297 of the MGA which deals with classification of land for assessment purposes, and s 4 of MRAT which deals with the applicable valuation standard. It specifically involves the

interpretation of the definition of “farm land” in s 297(1)(

a) and the definition of “non-residential” in s 297(1)(b). [ 46 ] The City argues that this proposed ground of appeal, as framed by the Applicants, involves a mixed question of fact and law because it involves an

interpretation of the legislative provisions (law) as well as a consideration of the appropriate zoning (fact). However, the central question in relation to this proposed ground of appeal is whether the City can assign a 3 Acre Carve Out from farm lands to a non-residential classification. This is an issue of statutory

interpretation. [ 47 ] The issue on the proposed ground of appeal involves a question of law and therefore the Applicants have satisfied the onus on this first point. 2 Is the Question of Sufficient Importance to Merit an Appeal? [ 48 ] To be of sufficient importance to justify an appeal, a question must be objectively important. The Applicant will usually need to show that the decision has implications which go beyond the dispute between parties. [ 49 ] The Applicants submit that the resolution of this issue is likely to have precedential effect.

[ 50 ] The City argues that this issue is not of sufficient importance to warrant an appeal because CARB decisions are reviewed on a reasonableness standard. As CARB is not bound by its prior decisions, it is conceivable that a different reasonable outcome could arise on somewhat different facts. [ 51 ] If CARB unreasonably interpreted s 297 of the MGA and s 4 of MRAT , this could have an ongoing impact on all lands within municipal boundaries which are used for agricultural purposes.

I conclude that the issue is sufficiently important to satisfy the second statutory requirement. 3 Does the Appeal have a Reasonable Chance of Success? [ 52 ] A "reasonable prospect of success" has been equated with an "arguable" case, taking into account the applicable standard of review. If the likelihood of a successful appeal is greater than extremely low, an appeal is arguable: Alberta (Chief Firearms Officer) v Runkle , 2015 ABCA 233 , [2015] AJ No 753 at para 37 . [ 53 ] This proposed ground involves CARB’s

interpretation, as a specialized tribunal, of its home statute. Counsel for CARB submitted that reasonableness applies to all issues raised before the Court, citing Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd , 2016 SCC 47 , [2016] 2 SCR 293. [ 54 ] The Applicants relied on FortisAlberta Inc v Alberta (Utilities Commission) , 2014 ABCA 264 , [2014] AJ No 843 at para 26 for the proposition that the standard of review need not be addressed on an application for leave and can be left to the panel hearing the appeal.

However, the Court in FortisAlberta cited appellate case law directing that the standard of review be considered on a leave application. Therefore, when considering the test for granting permission to appeal it is necessary to recognize that on appeal the Court will apply a reasonableness standard of review. [ 55 ] The Applicants argue that CARB erred in relying on the City’s land use classifications rather than on the assessment classifications provided in s 297 of the MGA .

They submit that the classification of land under the legislation is a function of the land’s use, not its zoning. [ 56 ] The City argues that CARB did not rely on land use codes in order to classify the land in question. Further, it submits that CARB’s

interpretation of the MGA and MRAT falls within the reasonable range of outcomes, accounting for the facts and law. The City concludes that the CARB decisions on this issue meet the reasonableness standard and, as a result, there is no reasonable chance of success on appeal. [ 57 ] Is it arguable that CARB’s

interpretation was unreasonable? [ 58 ] The only evidence before CARB was that the lands were used for farming operations. The City conceded this both before CARB and on this motion. Furthermore, the City Assessor must necessarily have concluded that the lands were “being used for farming operations” because the City Assessor specifically invoked the 3 Acre Carve Outs for of each of the parcels pursuant to ss 4(3)(

c) and (d). The 3 Acre Carve Outs permitted by s 4(3) only apply to farm land. The use of the lands and the characteristics of the lands did not change simply because the City invoked the 3 Acre Carve Outs permitted by s 4(3). [ 59 ] In dealing with the issue of classification, CARB considered the

definitions of “farm land” and “non-residential” in s 297 of the MGA . When quoting from the definition of “non-residential”, it highlighted and thus emphasized the words: “or is permitted to take place under a land use bylaw passed by council”.

While CARB did not fully explain its view of the significance of the highlighted words, the City in its submissions on the present motion argued that the zoning for the lands which are the subject of this motion “permitted” commercial operations and therefore the proper approach to classifying the 3 Acre Carve Outs is to assign a “non-residential” classification to that area to be consistent with the zoning.

The authority cited by the City for this proposition is an earlier decision of CARB in Oxford Properties v Edmonton , 2015 ECARB 01761, one of three matters in which a leave to appeal decision is pending in Associated Developers v Edmonton , Action No 1603 02101. [ 60 ] The Applicants argue that this approach ignores the definition of “non-residential” which expressly states that it “does not include farm land”.

Therefore, on a plain reading of the definition, land which is being used for agricultural purposes cannot be classified as “non-residential”. [ 61 ] The City responds that the words “does not include farm land” are intended to address the fact that farming operations may be characterized as commercial activities. [ 62 ] However, the fact remains that the definition of “non-residential” contains language expressly excluding farm land. [ 63 ] I also note that the zoning “permitted” 100% of each of the parcels (and not just the 3 Acre Carve Outs) to be used for commercial operations.

As a result, if the City’s argument regarding the

interpretation the definition of “non-commercial” were accepted, the whole of each of the parcels could be included in the definition. Neither the City’s arguments nor CARB’s reasons in this respect explain the basis for a distinction between treatment of the parcel and the 3 Acre Carve Out. [ 64 ] The City argues that the

definitions in s 297 of the MGA and the provisions of s 4 of MRAT must be read “harmoniously”. It argues that MRAT requires that the 3 Acre Carve Out be “assessed as if it is a parcel of land” and assessed at market value whereas farm land is assessed at agricultural use value. It argues that because the 3 Acre Carve Out is valued at market value, it cannot be farm land. As a result, the proper classification is “non-residential” because the zoning permits commercial operations. [ 65 ] However, s 4(3) of MRAT creates an exception to the valuation standard for the 3 Acre Carve Out.

It does not address the classification of the 3 Acre Carve Out. It is arguable that even when the 3 Acre Carve Out is considered as a separate parcel, the classification is governed by s 297 of the MGA and the 3 Acre Carve Out would be classified taking into account that it was still being used for agricultural purposes.

[ 66 ] As CARB’s decision on this issue does not appear to have taken into account or reconciled these factors, I find that this ground of appeal is arguable. 4 Conclusion [ 67 ] The issues raised are questions of law and are of sufficient importance to justify an appeal. The Applicants have demonstrated that it is arguable that the valuation of land under s 4 of MRAT and the classification of land under s 297 of the MGA are separate concepts which must be read in conjunction with each other. Using this approach it is arguable that 3 Acre Carve Outs pursuant to s 4(3) (

d) of MRAT should be classified as farm land, despite the fact that the zoning permitted commercial operations. Therefore, I conclude that the Applicants have demonstrated a reasonable chance of success on the appeal. [ 68 ] Accordingly, I grant permission to appeal on this ground. B Did CARB err in interpreting s 4 of MRAT to permit the assessment of more than one 3 acre parcel at market value? [ 69 ] This proposed ground of appeal relates only to the 118A Avenue Parcel. 1 Is this a Question of Law or Jurisdiction? [ 70 ] The issue in relation to this proposed ground of appeal involves the

interpretation of ss 4(3) and 4(4) of MRAT , in particular whether more than one 3 Acre Carve Out can be taken from any one parcel of land and assessed at market value. [ 71 ] All of the parties agree that this is a question of law. As a result, this requirement has been met. 2 Is the Question of Sufficient Importance to Merit Appeal? [ 72 ] Like the first proposed ground of appeal, this issue has broader application beyond the parcels of land which are the subject of this motion.

If CARB has unreasonably interpreted s 4(3) of MRAT on this point, then it could potentially affect all farm lands within municipal boundaries which have residences. [ 73 ] As a result, this proposed ground of appeal is of sufficient importance to satisfy the second criteria. 3 Does the Appeal have a Reasonable Chance of Success? [ 74 ] The Applicants argue that CARB and the City have erroneously interpreted s 4(3) of MRAT conjunctively as if the wording in s 4(4) had used the word “and” instead of the word “or”. [ 75 ] Section 4(3) directs an assessment based on a market value approach to certain specified land which would otherwise be assessed based on an agricultural use value because it is used for farming.

The subsection identifies six categories of lands which are subject to this exception. [ 76 ] MRAT does not expressly indicate whether more than one of the categories can be engaged in relation to any one parcel of land which is being assessed. Some of the categories are clearly mutually exclusive. For example, s 4(1)(

a) applies to lands containing less than one acre whereas s 4(1)(

b) applies to a parcel containing not less than one acre and not more than three acres. On the other hand, the two subsections in question, ss 4(3)(

c) and (d), can only apply to parcels of land which contain more than 3 acres. As a result, neither s 4(1)(

a) nor s 4(1)(

b) could ever be engaged in combination with either s 4(3)(

c) or s 4(3)(d). [ 77 ] However, MRAT does not expressly indicate whether ss 4(3)(

c) and (

d) can be used in combination with each other in relation to a single parcel of land. [ 78 ] The Applicants argue that the word “or” in s 4(4) is disjunctive and, as a result, this suggests that the intention of the Legislature was that ss 4(3)(

c) and (

d) should be mutually exclusive and not be used in combination. Section 4(4) provides: 4(4) An area referred to in subsection 3(c), (d), (

e) or (

f) must be assessed as if it is a parcel of land. (emphasis added) [ 79 ] When ss 4(3) and (4) are read together, it becomes clear that the use of the word “or” is not helpful in determining the intention of the Legislature on this point. Section 4(4) directs that where parcels are carved out of a larger piece of land, the carved out portion is to be assessed as a separate parcel using a market value approach.

It could be argued that the use of the word “An” in s 4(4) is an indication that only one 3 Acre Carve Out is permitted from each parcel and that if multiple 3 Acre Carve Outs were contemplated then the Legislature would have used the work “Each” at the start of s 4(4). However, the present wording of s 4(4) does not speak to whether s 4(3)(

c) can be used in combination with s 4(3)(d). [ 80 ] CARB accepted the City’s argument and concluded that there was nothing in MRAT which restricts a municipality from assessing more than one 3 acre parcel at market value. [ 81 ] The role of CARB is to apply expertise and principles of statutory

interpretation to interpret MRAT .

Section 4 is a specialized provision that falls squarely within CARB’s expertise. I conclude that it is not arguable that CARB’s

interpretation of s 4(3) was unreasonable.

[ 82 ] As a result, the Applicants have not satisfied the onus to demonstrate a reasonable chance of success on the proposed ground of appeal. 4 Conclusion [ 83 ] The Applicants have demonstrated that the issues involved in this proposed ground of appeal relate to questions of law and are of sufficient importance to merit an appeal but they have failed to satisfy the onus to demonstrate a reasonable chance of success. Therefore, I decline to grant permission to appeal on this proposed ground of appeal.

C Did CARB err and fetter its discretion in finding it did not have jurisdiction to modify the class? [ 84 ] This proposed ground of appeal applies to all three parcels of land which are the subject of this motion. 1 Is this a Question of Law or Jurisdiction? [ 85 ] In each of the three decisions which are the subject of this motion, CARB expressed the view that it did not have jurisdiction to change the City’s land use codes.

For example, in relation to the 118A Avenue Parcel CARB said at paragraph 26 of the decision: The more specific LUC (Land Use Code) of “823 Non-farmland vacant” is not within the Board’s jurisdiction to alter. [ 86 ] In relation to the 91 st Street Parcels CARB used the following language which was identical in both decisions: The Board finds that it does not have jurisdiction to alter the City’s Land Use Codes as stipulated in their bylaws. [ 87 ] The issue raised in relation to this proposed ground of appeal is one of jurisdiction.

This satisfies the first requirement for leave to appeal. 2 Is the Question of Sufficient Importance to Merit Appeal? [ 88 ] The question of jurisdiction is fundamental to CARB decisions.

The issue of whether it improperly determined that it had no jurisdiction in circumstances where it did in fact have jurisdiction is of sufficient importance to warrant an appeal. [ 89 ] The second requirement which must be met to grant permission to appeal is met. 3 Does the Appeal have a Reasonable Chance of Success? [ 90 ] One of the grounds on which a complaint can be made to CARB is in relation to alleged errors in the “assessment class” to which a City Assessor has assigned a parcel: s 460(5) of the MGA . Clearly, CARB has jurisdiction to alter an erroneous “assignment class” imposed by the City.

None of the parties to this motion disputes this. [ 91 ] CARB’s reasons indicate that the Applicants asked CARB to change the land use classifications, arguing that CARB had jurisdiction to change them under ss 460(5)(d) (an assessment class), (e) (an assessment sub-class) and (f) (the type of property). [ 92 ] For the following reasons, this ground has no reasonable chance of success on appeal. [ 93 ] First, the statements made by CARB regarding lack of jurisdiction, even if erroneous, did not affect the outcomes in any of the cases which are the subject of this motion.

In each case, CARB clearly indicated immediately prior to making the comments regarding jurisdiction that the classification decisions made by the City Assessor were correct. This is best illustrated by CARB’s statement in its decision in relation to the 118A Avenue Parcel: The Board finds that the second three acre parcel is properly classified as vacant non-residential land.

The more specific LUC of " 823 Non-farmland vacant" is not within the Board's jurisdiction to alter. [ 94 ] In relation to 2750-91 st Street (which for all practical purposes are identical to the reasons in relation to 2890-91 st Street) the Board said: The Board finds that the three acre parcel is properly classified as non-residential as per MGA s 29 7 ( 1 )(b). [ 95 ] As a result, even if the statements in the CARB reasons regarding jurisdiction are in error, they did not affect the outcome and thus the Applicants have no reasonable chance of success on appeal on this ground. [ 96 ] Secondly, and most importantly, the jurisdiction arising from s 460(5) of the MGA only permits CARB to alter the “assessment classes”.

The comments made by CARB which are subject to criticism by the Applicants do not relate to “assessment classes” but instead relate to “land use codes” which are internal codes used by the City. Land use codes are not “assessment classes”. [ 97 ] There is nothing in the CARB reasons which would suggest that it was under the impression that it could not alter the assignment of a parcel to an assessment class. On the contrary, a substantial portion of each set of reasons was directed to this issue of whether the “assessment classes” were properly assigned by the City Assessor.

CARB concluded that each of the parcels was properly assigned to the appropriate “assessment class”.

4 Conclusion [ 98 ] I conclude that there is no reasonable chance of success on this ground of appeal. As a result, I decline to grant permission to appeal in relation to this proposed ground of appeal. X Conclusion [ 99 ] The Applicants have satisfied the onus for leave to appeal only in relation to the first ground of appeal which can be stated as follows: Did CARB err in allowing farm land to be classified under s 297 of the MGA as non-residential land? XI Costs [ 100 ] If the parties cannot agree on costs, they may be spoken to within 60 days from the date of these Reasons.

Heard on the 29 th day of June, 2017. Dated at the City of Edmonton, Alberta this 20 th day of July, 2017. John T. Henderson J.C.Q.B.A. Appearances: A. Louie for the Applicants M. Gunther for the Respondent The City of Edmonton K. Hurlburt Q.C. for the Respondent The Edmonton Composite Assessment Review Board