Canapen (Phipps-Mckinnon) Ltd v Edmonton (City), 2017 ABQB 502

Court of Queen’s Bench of Alberta Citation: Canapen (Phipps-Mckinnon) Ltd v Edmonton (City), 2017 ABQB 502 Date: 20170815 Docket: 1503 14631 Registry: Edmonton Between: Canapen (Phipps-Mckinnon) Ltd Applicant - and - City of Edmonton and Edmonton Composite Assessment Review Board Respondents _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice L.R.A.

Ackerl _______________________________________________________ Introduction [ 1 ] The Applicant, Canapen (Phipps-Mckinnon) Ltd seeks leave to appeal the September 3, 2015 decision of the Edmonton Composite Assessment Review Board confirming the City of Edmonton’s 2015 assessment of the Applicant’s property at 10020-101A Avenue, NW, Edmonton as valued at $54,746,500. [ 2 ] Canapen’s application for leave to appeal was filed on October 2, 2015, under the provisions of the Municipal Government Act , RSA 2000, c M-26, s 470 [ MGA ].

The Applicant submits that the appropriate market value of the property is $42,545,000. Procedural background [ 3 ] On April 28, 2016, the Applicant filed an affidavit in support of its application for leave to appeal, and on May 8, 2016 filed

a related brief. On May 13, 2016, the City filed a response brief that requested the court to strike the Applicant’s affidavit of April 28, 2016, pursuant to the Alberta Rules of Court , r 3.68(4). [ 4 ] On May 24, 2016, Justice Jerke heard submissions from parties.

On September 6, 2016, the Court issued its decision that struck certain portions of the April 28 affidavit, and granted the Applicant “leave to file a supplementary brief identifying relevant portions of the record related to the grounds of appeal for use in the application for leave or in the appeal”: Canapen (Phipps- McKinnon) Ltd v Edmonton (City) , 2016 ABQB 501 at para 19 . [ 5 ] On May 25, 2017, Chris Buchanan deposed to a revised affidavit, on behalf of the Applicant, which was filed on May 26, 2017.

The Applicant filed its supplemental written brief on June 2, 2017, for the purpose of the within application. The City filed a supplemental response brief on June 8, 2017. Background facts [ 6 ] On January 2, 2015, the City provided an “Assessment Notice” to the Applicant, which indicated that the market value of its Property – a Class AL commercial office building in the Financial District in downtown Edmonton, AB – was $54,746,500.

Thereafter, the Applicant hired Altus Group Limited to review the Assessment, identify any errors, and submit a complaint, if necessary. [ 7 ] Altus filed a request with the City, pursuant to the MGA , s 299, seeking “sufficient information” to demonstrate how the City prepared the Assessment. That

section reads: 299

(1) An assessed person may ask the municipality, in the manner required by the municipality, to let the assessed person see or receive sufficient information to show how the assessor prepared the assessment of that person’s property.

(1.1) For the purposes of subsection (1), “sufficient information” in respect of a person’s property must include (

a) all documents, records and other information in respect of that property that the assessor has in the assessor’s possession or under the assessor’s control, (

b) the key factors, components and variables of the valuation model applied in preparing the assessment of the property, and (

c) any other information prescribed or otherwise described in the regulations.

(2) The municipality must, in accordance with the regulations, comply with a request under subsection (1). [ 8 ] On February 10, 2015, the City responded to this s 299 request and provided the following information: (

a) Downtown Office

Summary; (b) 2015 Assessment Methodology; (c) 2015 Downtown Valuation Rates and Rental Rates; (

d) Maps; (

e) Photographs of the Property; (

f) Returned Request for Information results for the Property from 2012-2014; (

g) List of Office Building Title Transfers from June 2009 – June 2014; and (

h) The City of Edmonton Time Adjustment Factors for 2015. [Record, at pp 124-199]. [ 9 ] On March 9, 2015, Altus filed a complaint on behalf of the Applicant. [ 10 ] Pursuant to

section 8 of the Matters Relating to Assessment Complaints Regulation , Alta Reg 310/2009 [ MRAC ], the Applicant filed its disclosure/written submissions on June 29, 2015.

The City filed its material on July 27, 2015; the Applicant filed rebuttal submissions on August 4, 2015. [ 11 ] On August 12 and 13, 2015, a hearing of the complaint was held before the Edmonton Corporate Assessment Review Board. [ 12 ] On September 3, 2015, the Board issued the impugned decision, confirming the Property’s assessment at $54,746,500: Altus Group v City of Edmonton , 2015 ECARB 911 at paras 47-57, 2015 CarswellAlta 2818 . [ 13 ] The Board decision indicates the following issues “were addressed in detail” by the Applicant during the Hearing: (

i) Should the capitalization rate be changed from 6.0% to 6.75%?; (ii) Should the office lease rate be changed from $17.50 to $16.50?; (iii) Should the office and retail vacancy shortfall be changed from $15.00/sf to $17.00/sf?; (iv) Should the two vacant units #120 and #200 be assessed as shell space?; and (

v) Should $2,368,518 of capital expenditures be applied to reduce the assessment?: Decision, at para 8. [ 14 ] On October 2, 2015, Canapen filed this leave to appeal originating application.

Test for leave to appeal [ 15 ] At the relevant point in time, section 470(1) of the MGA provided that “[a]n appeal lies to the Court of Queen’s Bench on a question of law or jurisdiction with respect to a decision of an assessment review board.” [ 16 ] Further, the MGA , s 470(5) stated that: On hearing the application and the representations of those persons who are, in the opinion of the judge, affected by the application, the judge may grant permission to appeal if the judge is of the opinion that the appeal involves a question of law or jurisdiction of sufficient importance to merit an appeal and has a reasonable chance of success [emphasis added]. [ 17 ] In Edmonton (City) v Alberta (City of Edmonton Composite Assessment Review Board) , 2012 ABQB 171 at para 11 , 535 AR 215 [ Edmonton ECARB, 2012 ], Topolniski J wrote, inter alia :

These points are fundamental to applications for leave to appeal from the Board: ... b. Any reasonably arguable point of law or jurisdiction must also be capable of affecting the result ( Globexx Properties Ltd. v. Edmonton (City) , 2011 ABQB 464 , at para 38 ); c. A breach of procedural fairness or the rules of natural justice is reviewable as a question of law ( Altus Group Ltd. v. Calgary (Composite Assessment Review Board ), 2011 ABQB 739 at paras 31 and 33 ; Keephills Aggregate Co. Ltd. v. Parkland (County of) Subdivision and Appeal Board , 2003 ABCA 242 ; ... and d.

The principles governing the distinctions between a question of law and one of mixed fact and law are as described in Alberta (Worker’s Compensation Board) v. Appeals Commission , 2005 ABCA 276 paras 15 to 22 : i. An incorrect statement of the legal standard, or test, or an application of incorrect factors in applying the law to the facts is an error of law. ii. Where there is a discretion involved in applying the law to the facts, the application of the discretion is not a question of law, but a question of mixed law and fact. iii.

However, if a wrong legal principle is used in the application of the law to the facts, or in the exercise of the discretion, there is an error of law. e. As a specialized tribunal, the Board’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 ( Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190, (paras 53 and 54 ). f. The Court may not grant leave to re-try questions of fact ( ... Masellis v. Edmonton (Subdivision and Development Appeal Board ), 2011 ABCA 157 at para 28 ) nor is it to re-weigh the evidence or the Board’s considerations and substitute its findings on the relevant evidence and considerations ( Simonelli v. Rocky View (Municipal District) No. 44 , 2004 ABQB 45 at para 72 ) g.

The Court of Appeal in a similar type of leave to appeal application of a Subdivision and Appeal Board decision has said that an appeal court will only interfere in discretionary decisions of a tribunal in limited circumstances: ...[where] the tribunal “proceeded arbitrarily, or the decision is so clearly wrong as to amount to a failure of justice”; or where the judge proceeded “arbitrarily, on a wrong principle, or on an erroneous view of facts”, or gave “no weight or insufficient weight to relevant considerations” ( Keephills Aggregate Co. Ltd. at para 37 ) .... h.

An issue may be of sufficient importance to merit an appeal if it is important for jurisprudential purposes. The importance is determined on an objective scale. Generally, there should be something unsettled about the question, or the decision should have wide ranging implications ( Associated Developers Ltd. v.

Edmonton (City) , 2011 ABQB 592 at para 42 ). [ 18 ] In general, “the determination of whether a matter has a reasonable chance of success involves a discussion of the standard of review”: Ross v Edmonton (City) , 2015 ABQB 495 at para 3 , 2015 CarswellAlta 1436 [ Ross 2015 ]. [ 19 ] Accordingly, I will address the issue of the applicable review standard in relation to the grounds of appeal, cognizant of the Supreme Court of Canada’s decision that “[it] has often applied a reasonableness standard on a statutory appeal from an administrative tribunal, even when the appeal clause contained a leave requirement and limited appeals to questions of law”: Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd , 2016 SCC 47 at paras 26-27 , 34 [2016] 2 SCR 293. [ 20 ] The Supreme Court also reiterated that where “the issue involves the

interpretation by an administrative body of its own statute or statutes closely connected to its function ... [the] standard of review is presumed to be reasonableness.” And that in the context of assessment vis-à-vis the

interpretation of the MGA , which is the Assessment Review Board’s home statute, “[t]he standard of review

is presumed to be reasonableness”: Ibid at paras 22-23. Proposed grounds of appeal [ 21 ] The Applicant has raised six proposed grounds of appeal in this application. They include: I. Did the Board err in law by failing to apply the appropriate valuation standards as required by the MGA ? II. Did the Board err in law by endorsing arbitrary valuation based on unsupported calculations? III. Did the Board err when it failed to address the issues of onus and misapplied the burden of proof? IV. Did the Board breach principles of natural justice? V.

Did the Board incorrectly apply the Freedom of Information and Protection of Privacy Act , RSA 2000, c F-25 [ FOIPP ]? VI. Did the Board fundamentally misunderstand the allowance for units in shell condition? [ 22 ] I turn to assess whether these proposed grounds meet the test prescribed for the grant of a leave to appeal, by considering the following questions in respect of each proposed ground of appeal: (

i) is the matter a question of law or jurisdiction? (ii) is the matter of sufficient importance to merit an appeal?, and (iii) does the matter have a reasonable chance of success? Issue I – Did the Board err in law by failing to apply the appropriate valuation standards as required by the MGA ? [ 23 ] The Applicant notes that the valuation standards and procedures are set out in the legislation and require each assessment to reflect the characteristics and physical condition of property on December 31 of the year prior to the year in which the property tax is imposed.

The assessor must apply the valuation in a fair and equitable manner: MGA , ss 289(2) and 293(1)(a); Matters Relating to Assessment and Taxation Regulation , Alta Reg 220/2004, s 3 [ MRAT ]. Canapen submits that the valuation standard for a property is market value, and “[a]n assessment of property 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”: MRAT , s 2. [ 24 ] In a summarized form, Canapen alleges that the Board failed to apply the valuation standard when it: (

a) accepted the City’s lease rate adjustments to support the City’s 6.0% capitalization rate; (

b) accepted the City’s time adjustment factors that discounts the passage of time and ignored the decline in sales value following the financial crash in 2008; (

c) failed to consider whether the City’s typical market lease rates reflected the rates currently prevailing in the market for comparable properties; (

d) failed to consider the Applicant’s sole evidence that the cost of carrying vacant space was $17.00 per square foot; (

e) did not apply a construction allowance to the shell space in units #120 and #200 of the Property; and instead, used vacancy or structural allowance. Applicant’s Written Brief, at para 68. [ 25 ] In sum, the Applicant argues the Board failed to apply the valuation standards as set out in the MGA and its associated regulations, and that a failure to apply the correct legal test, applying incorrect factors to a legal test, or misinterpreting the law, are errors of law.

The Applicant says this error of law would have far-reaching impacts on future tax payers, and it is important that this Court provides on appeal “clear guidance to the Review Board on the correct valuation standards that must be applied”: Applicant’s Written Brief, at para 70. The Applicant submits that there is a reasonable chance of success that the appeal court would conclude the Board did not correctly apply the legal test. [ 26 ] In response, the City states that the question about what valuation and other standards the Board is required to apply may be considered a question of law.

However, the legislated requirement that the assessor must apply both the valuation standard and other standards and procedures, pursuant to the MGA , s 293, is distinguishable from the legislated requirement under section 467(3) of the MGA , which demands that the Board only need to consider those valuation standards and procedures. [ 27 ] The City argues that the question of law raised in this proposed ground of appeal does not engage the

interpretation of the correct legal test. Instead, the issue relates to whether the facts satisfy the legal test, and questions “how the Board weighed the evidence, what evidence it accepted, and what evidence it rejected”: City’s Written Brief, at para 46. [ 28 ] The City contends that the Board’s Decision indicates the evidence it accepted, rejected, or preferred before concluding that it “place[d] less weight on the [Applicant’s] evidence,” and confirmed the 2015 assessment.

Analysis on Issue I [ 29 ] My review of the Board Decision reveals the Board identified the correct legal test governing valuation of the subject Property. In this respect, I note that the Board referred to sections 1(1)(

n) and 467 of the MGA . [ 30 ] Section 1(1)(

n) defines “market value,” and

section 467 provides, inter alia , that:

(1) An assessment review board may, with respect to any matter referred to in section 460(5), make a change to an assessment roll or tax roll or decide that no change is required.

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

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

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

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

c) the assessments of similar property or businesses in the same municipality. [ 31 ] The Board’s references to these statutory provisions show that, as far as the issue of selecting the appropriate valuation standards required by the MGA is concerned, the Board correctly stated the legal valuation standard. [ 32 ] Further, a review of the specific allegations made by the Applicant, regarding this proposed ground of appeal, indicates that it consistently argued that the Board either “accepted” the City’s evidence, “ignored” some evidence, “failed to consider” certain evidence from the Applicant, or did not apply “construction allowance” but used “vacancy allowance” instead to the facts of specified units of the subject Property, and “failed to find” that the City was required to provide that allowance: Applicant’s Written Brief, at para 68. [ 33 ] Pertinently, this Court previously held in Altus Group Ltd v Calgary (Composite Assessment Review Board) , 2011 ABQB 739 at para 28 , 528 AR 138 [ Altus ], that “[t]he acceptance or rejection of specific evidence in coming up with rental rates, office vacancy rates and overall capitalization rates is not a question of law.” In my view, Canapen’s challenges to the Board’s Decision in the present application are substantively similar to those issues raised in Altus . [ 34 ] Further, the law is clear that where there is a discretion involved in applying the law to the facts, the application of the discretion is not a question of law, but a question of mixed law and fact the application of a discretion: Edmonton ECARB, 2012 at para 11(d)(ii) [ 35 ] Given that the Board, in the present case, correctly identified the appropriate valuation standards required under the MGA and its associated regulations, and was exercising or applying its discretion under that statute to the facts in relation to the subject Property, I find that the Board’s application of discretion is not a question of law, but a question of mixed law and fact regarding which this Court is unable to grant leave to appeal. [ 36 ] Consequently, Canapen’s application for leave to appeal on the basis of the Board’s application of the legislated valuation standards to the Assessment of the Property, as required by the MGA statutory regime, is denied.

Issue II – Did the Board err in law by endorsing arbitrary valuation based on unsupported calculations? [ 37 ] The Applicant submits that the Board endorsed the City’s assessment of the Property that utilized arbitrary values, which were not supported by evidence. The alleged arbitrary values include the City’s adjustments to the net operating income and sale price of four of the seven properties selected by the City as comparables in order to reduce the capitalization rate applied to the Property. The alleged arbitrary adjustments include: (

i) an unsupported inflationary adjustment at the rate of 2% to market rents on the subject properties; (ii) discount of cash flow that deemed certain rental rates to be below market, without the City providing any evidence as to which rents needed adjustment and why; and (iii) net present value adjustments to cash flow discounts, without evidence from the City in support of the rate. [ 38 ] Other arbitrary values identified by the Applicant include: (

i) the City’s time adjustment factors – required to ensure that property assessment reflects an accurate estimate of a property’s market value on July1 of the year prior to the assessment year – that discounts the passage of time; (ii) the office lease rate of $17.50 per square feet that was used by the City, instead of the actual rental rates provided by the Applicant that indicated the typical market lease rate was $16.50 per square foot; and (iii) the office vacancy shortfall rate of $15.00 per square foot, when the only evidence before the Board, which is that of the Applicant, showed that the cost of carrying vacant space was $17.00 per square foot. [ 39 ] The Applicant argues this proposed ground of appeal merits an appeal because the Board must ensure the City has support for the values applied.

The Applicant maintains that the ground has a reasonable chance of success because the Court will likely interfere with the Board’s endorsement of an arbitrary assessment. [ 40 ] The Respondent City concedes that the issue of whether the Board endorsed arbitrary valuation based on unsupported

calculations, as raised in this proposed ground of appeal, is a question of law that is of sufficient importance. However, it argues that the ground has no reasonable chance of success as a question of law. [ 41 ] The City submits that the MRAT grants the City certain discretion to provide an “estimate” of the value of the fee simple estate in a property that is being assessed: MRAT , s 2(b).

The City contends that the Board considered the legislated procedures established in the relevant ministerial order, as well as the City’s disclosure evidence that referred to specific third party sources, which confirmed that adjustments were warranted to account for assumed below market leases.

This disclosure evidence provided the basis for the City’s valuation decision, and negates the Applicant’s argument that the City “deemed certain rental rates to be below market without providing any evidence.” In addition, the City submits that the record reveals that it provided evidence of 10 sales of downtown office properties, out of which 6 properties were not adjusted for assumed leases, along with evidence from third party sources that supported the City’s capitalization rate.

Analysis on Issue II [ 42 ] I agree with both parties that this proposed ground of appeal raises a question of law: GSL Chevrolet Cadillac Ltd v Calgary (City) , 2013 ABQB 318 [ GSL ]. The rationale for this conclusion was articulated by Veldhuis J (as she then was) in GSL at para 23 : First, it is contrary to general legal principles for a reviewing body to endorse arbitrary decision-making. Chief among these principles is the rule of law, which dictates that the law should be applied in a uniform fashion for all.

Second, such an approach would be contrary to the statutory regime for property assessments. [ 43 ] The question of law is also of sufficient importance and merits an appeal because the decision of the Board that endorses an arbitrary valuation would have wide ranging implications from a jurisprudential perspective: Associated Developers at para 42. [ 44 ] The outstanding question for this Court is whether the second proposed ground of appeal has a reasonable chance of success. [ 45 ] To deal with that issue, it is critical that in its Decision, the Board wrote, inter alia , that: 48 The Board understands that the City is legislated to assess the fee simple estate of a property.

The Board accepts the Respondent’s lease rate adjustments of the assumed leases of the sales used in their cap rate analysis as the method to bring the sale prices to the fee simple from the leased fee estate. 49 The Board notes that the cap rates utilized by the City is further supported by the Colliers Report, Q2 2014, which shows the cap rates in Edmonton range from 5.5% - 6.5% and for ‘A’ class buildings in the downtown Edmonton office market. Furthermore the CBRE Q2, 2014 report indicates an even narrower cap rate range of 5.75% to 6.25% for ‘A’ class office buildings.

The Board is satisfied that the cap rate the City has applied to the ‘A’ class properties being in the middle of this range at 6.0% is more reasonable than the 6.75% cap rate the Complainant has requested. 50 The Board reviewed the rent roll of the subject and the evidence provided by both parties and finds that the Respondent’s typical lease rate of $17.50/sf has been accurately calculated and equitably applied to all similar class ‘AL’ properties. 51 The Board agrees with the Respondent that operating costs for vacant space are less than for leased space.

The Board understands that total operating costs are borne by the tenants according to the amount of space leased and unfortunately the operating costs for vacant space must be paid for by the owner. The Board is satisfied however that the typical $15.00/sf office and retail vacancy shortfall has been correctly applied to the subject property [ emphasis added ]. [ 46 ] Apparently, this portion of the Board’s Decision indicates that the Board was alive to the evidence provided by both the Applicant (as the Complainant before the Board) as well as the City (as the Respondent before the Board).

Prior to the Board’s findings and conclusion, it is obvious from its written reasons and the record that, as an administrative decision-maker, it considered the values or valuation factors used by the City in making its Assessment of the Applicant’s Property, cognizant of the evidence available to both parties and the Board itself. [ 47 ] For the purpose of determining whether this second proposed ground has a reasonable chance of success, it is significant that the applicable standard of review is reasonableness. The Board was engaged with the

interpretation and application of its home statute – the MGA and its associated regulatory regimes – in the context of property assessment, a subject area where the Board has relative expertise: Ross 2015 at para 3. [ 48 ] In the context of the reasonableness review standard, I am satisfied that the Board in this case did not endorse arbitrary valuation based on unsupported calculations. It is clear to me that the City provided evidence to the Board, which demonstrated the values utilized by the City for the relevant assessment.

The Board considered that evidence, and indicated in its reasons that it accepted the evidence and calculations relied on by the City for its Assessment of the Property. That was not an arbitrary endorsement of the City’s valuation method; rather, it was a reasoned acceptance of the City’s assessment following the Board’s consideration of “the evidence provided by both parties”: Decision, para 50. [ 49 ] In the result, I conclude that the Applicant’s second proposed appeal ground does not have a reasonable chance of success. Leave to appeal on this proposed ground is accordingly denied.

Issue III – Did the Board err when it failed to address the issues of onus and misapplied the burden of proof?

[50] The Applicant submits that, pursuant to the MGA, s 460(7), it does not have the onus of establishing that the Assessment of itsProperty was fair and equitable; and that the burden on the Applicant (as a complainant) was to establish a prima facie case. Once that isdone, the onus shifts to the City. [51] In this third proposed ground of appeal, the Applicant contends that the Board erred when it failed to discuss the onus orburden of proof in its written Decision.

It says that the issue of whether the Board correctly interpreted the test under the MGA as toburden of proof is a question of law that is of sufficient importance to merit an appeal. [52] The Board, in its limited submissions, indicates that the issue of onus and burden of proof was neither raised before the Boardnor discussed in the Board’s written reasons: Leon’s Furniture Limited v Alberta (Information and Privacy Commissioner), 2011ABCA 94 at paras 28-29, 502 AR 110.

The Board suggests that the issue of whether the Applicant and the City met the requisiteonuses is a question of mixed law and fact reviewable on the reasonableness standard. [53] The City argues that the question of whether the Board applied the correct onus and burden of proof is a question of law,while the inquiry as to whether the Board erred in finding that the City proved the assessment of the Property was correct, fair andequitable is a question of mixed law and fact, which would attract review on the reasonableness standard: Genesis Land DevelopmentCorp v Calgary (City), 2014 ABQB 57 at para 32, 19 MPLR (5th) 298. [54] The City submits that a review of the sequence in the Board’s written reasons displays that the decision-maker “switchedfrom a consideration of the Applicant’s evidence to a consideration of the City’s evidence” while reviewing the evidence of both partiesto the proceeding before it.

The City contends that it is logical to presume that the “Board would not have gone on to consider the City’sevidence if it had not determined that the Applicant [led] some evidence that the assessment was incorrect.” This format, the City argues,aligns with this Court’s recent statement in Ross v Edmonton (City), 2016 ABQB 730 at para 4, 48 Alta LR (6th) 333 [Ross 2016], thatthere is a distinction “between the initial evidentiary burden of proof, i.e. requiring the claimant to lead some evidence, and the ultimateor legal burden of proof, i.e. requiring the claimant to prove, on a balance of probabilities, that the assessment was unfair andinequitable” (emphasis in original). [55] The City argues that nothing in the record or the Board’s written reasons support the Applicant’s statement that Boarddeparted from the legal burden of proof.

Analysis on Issue III [56] In GSL at paras 31 – 33, Veldhuis J (as she then was) held the question regarding the correct burden borne by a party makinga property assessment complaint is a question of law.

In that context, the Court indicated that for property assessment purpose, the onuson the complainant is mandated by section 460(7) of the MGA, which provides that a complainant must:(1) indicate what informationshown on an assessment notice or tax notice is incorrect; (2) explain in what respect that information is incorrect; (3) indicate what thecorrect information is; and, (4) identify the requested assessed value, if the complaint relates to an assessment. [57] Justice Veit further clarified in Ross 2016 at para 21, that “the correct analysis of the burden of proof on hearings before theBoard is that a complainant must initially provide only some evidence that the assessment is incorrect, after which the evidentiary onusswitches to the City to provide evidence that the assessment is correct.” [58] Additionally, in GSL at para 35, this Court observed that “[t]here is no indication that the CARB routinely misunderstands ormisapplies the standard of proof in its proceedings.” [59] Given the existing jurisprudence, I conclude that the law is relatively settled as to the onus or burden of proof in respect ofproperty assessments under the MGA, s 460(7).

As such, in my opinion, the Applicant’s third proposed ground of appeal is not ofsufficient importance to merit an appeal: Associated Developers at para 42; Edmonton ECARB, 2012 at para 11(h). [60] Does the Applicant’s third proposed grand have a reasonable chance of success? [61] On the prospect of the appeal, the Applicant’s allegation that the Board failed to expressly address the issue of burden ofproof invites a discussion of the “presumption of regularity” as a legal principle.

According to the Alberta Court of Appeal held that,“[the] presumption [of] omnia praesumuntur rite et solemniter esse acta donec probetur in contrarium [means] – where acts are of anofficial nature, it is a presumption of law that they are correctly and solemnly done unless the opposite is proven”: Lethbridge (City of) vDaisley, 2000 ABCA 79 at para 23, 250 AR 365 [Lethbridge], citing R v Larsen (1992), (SK CA), 97 Sask R 310(Sask CA); Irvine v Canada (Restrictive Trade Practices Commission), (SCC), [1987] 1 SCR 181. [62] In Lethbridge at paras 24-25, the Court further observed: In this case, the absence of any mention by the [administrative decision-maker] in its decision indicating it did or did not consider s. 43[of the relevant bylaw] is of no assistance to the neighbours [in] rebutting the presumption of regularity....

Moreover, a tribunal is notrequired to refer individually to each of the constituent elements of the governing law or statute in its decision or reasons: ServiceEmployees’ International Union, Local No. 333 v.

Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382. [25] In the absence of any evidence or any indication in the record as to whether the [decision-maker] considered s. 43 of the bylaw, itmust be presumed that the [decision-maker] considered and weighed all relevant factors it was mandated to consider [emphasis added]. [63] Based on the record before me, it is apparent that the Applicant did not explicitly raise the issue of burden of proof before theBoard.

That failure, and the absence of any discussion in the written reasons on how the Board applied the requisite onus leads me tofind that the Board is entitled to enjoy the “presumption of regularity” regarding its official action in the present case. This legal conceptdemands that this Court must presume that the Board “considered and weighed all relevant factors it was mandated to consider”:

Lethbridge at paras 25. The activation of this presumption of law suggests that the third proposed ground of appeal has no reasonablechance of success. [64] Given that the Board did not expressly discuss the issue of the burden of proof in its reasons, presumably because it was notexplicitly raised before it, the Applicant’s contention that the Board misapplied the burden of proof is, in my view, non sequitur; or atbest, speculative.

In the absence of any statement from the Board in its written reasons “indicating that it did or did not consider” theissue of burden of proof, I conclude that there is no logical path to or basis for the Applicant’s contention that the Board misapplied theburden of proof: Lethbridge at paras 24.

Without more, the Applicant’s speculation does not assist it in rebutting the presumption ofregularity that must be accorded the impugned Board Decision. [65] Further, a consideration of the standard of review that governs the Board’s application of the burden of proof to the hearingbefore it is reasonableness: Ross 2016 at para 22.

This threshold, which is generally instructive when the Court is assessing the proposedappeal ground’s prospects on appeal, suggests that the Applicant’s third proposed ground does not have a reasonable chance of successon appeal: Ross 2015 at para 3. [66] Accordingly, leave to appeal on the basis of the third proposed ground is denied.

Issue IV – Did the Board breach principles of natural justice? [67] The Applicant says that following its complaint, and written submissions with accompanying disclosure to the Board, the Cityintroduced a number of documents, which were not disclosed in advance to the Applicant, to supplement the City’s case. The documentsconcerned are: (

i) the 2015 Fairness and Equity Chart; (ii) the Downtown Class AA & A Office Capitalization Rate Analysis, includingoffice sales analysis and associated lease adjustment, summaries; (iii) Time Trend Methodology; and (iv) Alberta Municipal Affairs2014 Recording and Reporting Information for Assessment Audit and Equalized Assessment Manual. [68] The Applicant submits that the Board’s reliance on these documents – that were “not disclosed until the City’s submissions inresponse to the Applicant’s initial submissions” – in order to make its Decision constitute breach of the principles of natural justice.

TheApplicant says that when it attempted to rebut the Time Trend Methodology, the City objected and the Board struck the Applicant’sargument from the record: Applicant’s Brief, filed May 6, 2016, at para 95. [69] The Applicant argues that the City’s failure to disclose in these circumstances, and the question of whether the City isrequired to “disclose the full basis for its assessment” under the MGA, s 299 are of sufficient importance to merit an appeal.

In addition,the Applicant contends that the contravention of the established jurisprudence on disclosure and the Board’s reliance on the “newevidence” received from the City suggest that there is a reasonable chance of success on this proposed appeal ground. [70] The Respondent City argues that this Court should deny leave to appeal this fourth proposed ground for the followingreasons: (

i) The Applicant failed to raise the issue of compliance or non-compliance with the disclosure requirements under the MRAC,s 8 before the Board; (ii) The Applicant did not raise the issue of the City’s provision of information, pursuant to the MGA, s 299 or the MRAC, s 9(4)before the Board; (iii) The Applicant did not request that the Board not hear any evidence from the City that had not been properly disclosed, asprescribed by the MRAC, s 9(2); and (iv) There is nothing in the record to confirm that the Applicant requested a “compliance review” of the City’s disclosure underthe MGA, s 299, as the Applicant was entitled to make under the MRAT, s 27(6). [71] The City argues that, prior to coming before this Court, the Applicant ought to have pursued the statutory remedies mentionedabove, as they constitute adequate alternate remedies: Harelkin v University of Regina, (SCC), [1979] 2 SCR 561 at592, 96 DLR (3d) 14. [72] The City submits that the Applicant is not entitled to raise, for the first time at the leave to appeal stage, any issue relating tothe alleged failure of the City to comply with certain statutory disclosure requirements.

Analysis on Issue IV [73] The fourth proposed ground of appeal dealing with the issue of breach of procedural fairness or the rules of natural justice is aquestion of law: Eau Claire Market Inc v Calgary (City), 2015 ABQB 131 at para 10, 27 Alta LR (6th) 410; Edmonton ECARB, 2012at para 11(c). [74] I agree that, given its jurisprudential value, an assessor’s failure to make statutorily mandated disclosure and an administrativedecision-maker’s endorsement of such action constitutes a question of law that is of sufficient importance to merit an appeal. [75] This leads to the next inquiry whether, in the context of the present matter, the Applicant has raised a question of law that hasa reasonable chance of success on appeal. [76] In general, where an appeal is based on a new issue not expressly before the initial administrative decision-maker, the chance

of success of such an appeal is remote. [ 77 ] In Legal Oil & Gas Ltd v Alberta (Surface Rights Board) , 2001 ABCA 160 at para 12 , 303 AR 8 [ Legal Oil ], the Alberta Court of Appeal concluded that: While we accept that an appellate court may, in its discretion, decide questions of law not raised by the parties at trial, this Court will not do so unless the matter is a pure question of law requiring no additional evidence to make the decision.

Further, when the Court is exercising its powers of judicial review of a decision of an expert Board or tribunal, barring exceptional circumstances, generally the Court will not decide questions not raised before the Board or tribunal. [ 78 ] The Applicant indicates in its written submissions that it attempted to rebut the “new evidence” of the Time Trend Methodology filed by the City.

Regarding this rebuttal allegation, I note that the Board in its Decision (at paras 5-6) stated: 5 The [City] objected to parts of the rebuttal document being entered as evidence on the grounds that it did not respond to a new issue raised by the [City]. .... The [City] stated that proper rebuttal is only a response to matters raised by the [City] which the Complainant [i.e. Applicant] could not have reasonably anticipated when the Complainant first presented its case. Rebuttal is not an opportunity to present more and better evidence on an issue that the Complainant raised in the original disclosure.

To allow the Complainant to do so is to allow the splitting of the case which is contrary to the rules of natural justice. The [City] merely responded to the issue of time adjustment factors which did not warrant a rebuttal. 6 The Board found that the impugned sections of the rebuttal document were, in fact, merely more detailed information on an issue raised by the Complainant [i.e. Applicant] and, therefore, it would be improper to allow it into evidence at the rebuttal stage of the hearing.

Accordingly the Board struck the impugned sections and entered the remaining sections into evidence as exhibit C2. [ 79 ] Based on the foregoing excerpts, I am satisfied that the Board adhered to the principles of natural justice and procedural fairness by affording the Applicant an opportunity to file rebuttal documents, speak to the documents, prior to the Board’s decision to strike parts of the Applicant’s rebuttal documents and to enter the remaining portion in evidence. [ 80 ] I also find that the Applicant failed to make its concerns known to the Board for consideration and determination as the administrative decision-maker at first instance – regarding the alleged failure of the City to comply with the MRAC , s 8; and the alleged failure of the City to provide complete information, pursuant to the MGA , s 299 or the MRAC , s 9(4).

In my opinion, that failure severely impacts the Applicant’s chance of success on appeal. Further, the failure to raise these alleged infractions by the City at first instance before the Board is compounded by the Applicant’s failure to request that the Board not hear any evidence from the City that had not been properly disclosed, as prescribed by the MRAC , s 9(2); as well as its failure to request a “compliance review” of the City’s MGA , s 299 disclosure, as the Applicant was entitled to make under the MRAT , s 27(6).

These issues, which the Applicant failed to raise before the Board, are not pure questions of law that an appellate court may exercise its discretion to decide at first instance, as they would require additional evidence at the leave to appeal stage for final determinations. [ 81 ] Put succinctly, the Applicant’s fourth proposed ground of appeal has no reasonable chance of success as the Applicant failed to raise the issues that it now proposes to deal with on appeal regarding the City’s alleged failure to make statutory disclosures before the Board, at first instance.

Neither has the Applicant shown any exceptional circumstance that would justify a departure from the general principle that an appellate or reviewing court will not decide questions not raised before the expert Board or tribunal: Legal Oil at para 12 . [ 82 ] In the result, leave to appeal based on this fourth proposed ground is denied.

Issue V – Did the Board incorrectly apply the Freedom of Information and Protection of Privacy Act , RSA 2000, c F-25 [ FOIPP ]? [ 83 ] The Applicant argues that the City relied on FOIPP to prevent disclosure of information regarding adjustments made to comparable historical sales in support of the City’s capitalization rate analysis, which the Board accepted. It submits that this misapplication of FOIPP by the Board is an error of law.

The Applicant contends that since the corporate record information it sought was collected for the purpose of determining property taxes, it should be disclosed to a party that is challenging the calculation of relevant taxes. [ 84 ] The Applicant argues that the issue is of sufficient importance because the City regularly refuses to disclose information sufficient to support its adjustment, under the belief that FOIPP does not permit the City to make such disclosures.

The Applicant submits that there is a reasonable chance that the Board has incorrectly misinterpreted FOIPP . [ 85 ] The City responds that, other than the preliminary request made by the Applicant to have its own confidential leasing information sealed, the Applicant did not raise any issue in relation to FOIPP before the Board.

Consequently, the Board did not make any decision on the issue for subsequent review by this Court on appeal. [ 86 ] Further, given the provision of the MGA , s 465(1) that authorizes the Board to order the production of a document or thing, the City submits that the Applicant ought to have pursued that adequate alternate remedy to request for an order of the Board compelling the City to produce the information required by the Applicant.

The City submits that the Applicant’s failure to pursue that adequate alternate remedy precludes it from seeking relief before this Court or raising the issue for the first time at the leave to appeal stage. [ 87 ] In the alternative, the City notes that section 16(2) of FOIPP provides that “a public body must refuse to disclose to an applicant information about a third party that was collected on a tax return or collected for the purpose of determining tax liability or collecting a tax.” ( emphasis added ). The City argues that this statutory provision binds it as public body. It notes that it was the same

“Exceptions to Disclosure” regime under FOIPP , s 16 that the Applicant used in its preliminary request to obtain a sealing order from the Board protecting the Applicant’s information. [ 88 ] In the Board’s limited submissions, it clarified that, in this proposed ground, the Applicant seems to argue that: (1) the City improperly applied the provisions of FOIPP to avoid disclosing certain information the City relied on to prepare evidence submitted to the Board; (2) the Board ought to have required the City to disclose this underlying information; and (3) the Board ought not to have accepted the City’s evidence as it was not supported by this underlying information.

Notwithstanding, the Board maintains that the issue of whether the City improperly withheld information under FOIPP was neither raised before the Board nor decided by the Board. Analysis on Issue V [ 89 ] While the

interpretation of the provision of a statute is generally a question of law, the application of that statutory provision to the facts of the case before the administrative decision-maker is a question of mixed fact and law: Edmonton ECARB, 2012 at para 11(d)(ii); Alberta (Worker’s Compensation Board) v Appeals Commission , 2005 ABCA 276 paras 15 to 22 . [ 90 ] Obviously, the Applicant in this leave to appeal application is challenging the City’s application of provisions in the FOIPP to the issue of information disclosure by the City in the context of the Applicant’s Property tax assessment.

By logical extension, the Applicant also challenges the Board’s acceptance of the City’s position on the issue. Framed in this manner, the issue engaged in the Applicant’s fifth proposed ground of appeal is a question of mixed law and fact, regarding which leave to appeal cannot be granted under the MGA , s 470(5). [ 91 ] Secondly, it is problematic to grant a leave to appeal an issue that was not raised at first instance by the Applicant.

In the present matter, the issue of the City’s alleged misapplication of FOIPP provisions to refuse the disclosure of information that the Applicant sought were not brought up in the proceeding before the Board. By nature, the misapplication of a statutory provision in the exercise of discretion by an administrative decision-maker is hardly a pure question of law that requires no additional evidence in order for an appellate court to make its decision: Legal Oil at para 12 .

As a result, I find that the failure of the Applicant to raise the issue, regarding the legal effect of the FOIPP Act on disclosure by the City, at first instance is unhelpful to its leave application. [ 92 ] Finally, while the FOIPP Act is neither the City nor the Board’s “home statute,” it is arguable that as public bodies that make administrative decisions and perform functions related to the determination of tax liability and property tax assessment, the FOIPP Act vis-à-vis the City and the Board can be characterized as one of the “statutes closely connected to [their] function, with which [they] will have particular familiarity”: Dunsmuir v New Brunswick , 2008 SCC 9 at para 54 , [2008] 1 SCR 190.

Section 16(2) of FOIPP – that authorizes the non-disclosure of certain tax information by a public body – testifies eloquently to this proposition.

Thus, both the City’s assessment and the Board’s decision are separately entitled to deferential reviews on the reasonableness standard. [ 93 ] Consequently, given that the reasonableness review standard is applicable to the Board’s decision regarding which the Applicant seeks leave to appeal in this application, I conclude that, to the extent that a question of law is extricable in this case, it is not one that is of sufficient importance to merit an appeal; and neither is there a reasonable chance of success for this proposed ground on appeal. [ 94 ] Leave to appeal on this proposed ground is denied.

Issue VI – Did the Board fundamentally misunderstand the allowance for units in shell condition? [ 95 ] The Applicant argues that Units #120 and #200 of the Property are presently in shell condition, and that the appropriate valuation standard that applies to space in this condition is “construction allowance,” following the City’s valuation manual that says an allowance is to be provided for such space in the amount set out in the Marshall and Swift Manual.

Instead, the Applicant submits, the Board concluded that the space was accounted for in the Assessment of the Property as part of the “yearly 2% vacancy allowance.” The Applicant submits that this was a fundamental misunderstanding of the issue, which constitutes an error of law on the Board’s part. [ 96 ] The Applicant argues that this issue is of sufficient importance that merits an appeal in order to ensure that the Board does not consistently treat shell space as vacant space; and the Board’s failure to make this distinction means there is a reasonable chance of success on appeal that the Board mishandled the issue. [ 97 ] The City in response submits that “construction allowance” is not a legislated valuation standard; and the valuation standard that the Board needed to consider is the market value of the Property, along with other standards specified in relevant regulations.

The City argues that the issue raised in this proposed ground is essentially a question of mixed law and facts that deals with how the Board weighed and applied the evidence when considering the market value of the Property. [ 98 ] Since this proposed ground raises a question of mixed law and facts, the City submits that it does not involve a question of law that is of sufficient importance to merit an appeal, as it is subjective to the Applicant’s property assessment.

In addition, the City argues that there is no reasonable chance of success on this ground, as questions of mixed law and facts are reviewable on the standard of reasonableness. Analysis on Issue VI

[ 99 ] In Edmonton ECARB, 2012 at para 11(d)(iii), Topolniski J clarified that “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.” [ 100 ] In my view, there is no evidence in the record that the Board used or considered a wrong legal principle in this instance. From its written reasons, it is clear the Board was alive to the use of the market value and other standards prescribed by the MGA and the associated regulations.

As such, there was no error of law on the part of the Board when it used the statutorily prescribed “market value” standard in its consideration of the Property’s Assessment by the City. [ 101 ] Regarding the question of “construction allowance” in relation to Units #120 and #200 of the Property that are in shell condition, I am satisfied that this is an issue properly characterized as mixed law and fact because it engages the application of a standard – i.e. “construction allowance” – to the facts and evidence relating to these shell units.

The MGA , s 470(5) does not permit this Court to grant leave to appeal in respect of questions of mixed law and facts. [ 102 ] Nonetheless, the Board’s reasons demonstrate that it recognized the need to consider an “allowance” for shell units. In this context, I observe that its Decision indicated that: 52 The Board considered the Complainant’s request for an allowance to bring units 120 and 200 from shell space into leasable space condition and finds that the yearly 2% vacancy allowance allows for such funds. The subject property has been assessed with a 10% office vacancy and a 25% retail vacancy.

Furthermore vacant space in shell condition allows flexibility in planning and designing for future use [ emphasis added ]. [ 103 ] Based on the foregoing explanations by the Board, I am satisfied that the administrative decision-maker accounted for its consideration of evidence – as well as the Applicant’s request for an allowance – regarding shell spaces in the context of the City’s assessment of the Property’s market value.

Moreover, even assuming the issue of construction allowance is an extricable question of law, this issue is not of sufficient importance to merit an appeal and has no reasonable chance of success. [ 104 ] Leave to appeal on the sixth proposed ground is denied. Disposition [ 105 ] Canapen’s application for leave to appeal is denied on all the proposed appeal grounds. [ 106 ] The parties may speak to costs, if necessary. Heard on the 22 nd day of June, 2017. Dated at the City of Edmonton, Alberta this 15 th day of August, 2017. L.R.A. Ackerl J.C.Q.B.A.

Appearances: Steven Dollansky McLennan Ross LLP for the Applicant, Canapen (Phipps-Mckinnon) Ltd Tanya L Boutin City of Edmonton, Law Branch for the Respondent, City of Edmonton Kate L Hurlburt, QC

Emery Jamieson LLP for the Respondent, Edmonton Composite Assessment Review Board