Beta Management Inc v Edmonton (City), 2017 ABQB 571

Court of Queen’s Bench of Alberta Citation: Beta Management Inc v Edmonton (City), 2017 ABQB 571 Date: 20170926 Docket: 1603 15851 Registry: Edmonton Between: Beta Management Inc. as represented by MNP LLP Applicant - and - The City of Edmonton and The Edmonton Composite Assessment Review Board Respondents _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice W.N.

Renke _______________________________________________________ [ 1 ] The Applicant applied under s. 470 of the Municipal Government Act for leave to appeal the decision of the Edmonton Composite Assessment Review Board (CARB) dated September 16, 2016 (2016 ECARB 01328, the Decision). [ 2 ] For the reasons that follow, leave to appeal is denied. [ 3 ] I will (

I) review the facts, (II) describe the nature of the application, (III) consider the tests to be met for leave to appeal to be granted, and (IV) provide my reasons for finding that the Applicant has failed to satisfy those tests. [ 4 ] As a preliminary matter, I confirm that there was no objection to the participation of the CARB in the proceedings. The CARB confined its submissions to an overview of the legislative scheme and the standards of review respecting the grounds for appeal. It did not “enter the arena” by arguing for the correctness of its decision. See Leon’s Furniture Limited v. Alberta (Information and Privacy Commissioner) , 2011 ABCA 94 , Slatter JA at para 16.

[ 5 ] I will describe the complainant before the CARB and the current applicant as the Applicant. Table of Contents I. Facts . 3 II. The Application . 4 III. Tests for Leave to Appeal 4 A. Three Tests for Leave to Appeal 5 B. The Tests . 5 1. Question of Law, not Question of Fact or Mixed Law and Fact 5 (

a) Question of Law .. 5 (

b) Question of Fact 6 (

c) Question of Mixed Law and Fact 6 (

d) Determination of Mixed Law and Fact Raising a Question of Law .. 6 2. Sufficient Importance to Merit an Appeal 8 3. Reasonable Chance of Success . 8 (

a) Nature of the Test 8 (

b) Reasonable Chance of Success and Standard of Review .. 9 (

c) Applicable Standards of Review .. 10 IV. Satisfaction of the Tests . 11 A. Post Facto Evidence and Legal Error 11 1. Question of Law? . 11 (

a) Rules of Evidence . 11 (

b) Mixed Law and Fact 12 (

c) Post Facto Evidence and Market Value . 13 2. Sufficient Importance to Merit an Appeal? . 21 3. Reasonable Chance of Success? . 22 B. Sale Price and Legal Error 26 1. Question of Law? . 26 2. Sufficient Importance to Merit an Appeal? . 28 3. Reasonable Chance of Success? . 28 C. Burden of Proof and Legal Error 29 1. Question of Law? . 29 (

a) Conclusion from Silence . 29 (

b) Procedural Justice . 30 (

c) Burden of Proof 30 2. Sufficient Importance to Merit an Appeal? . 32 3. Reasonable Chance of Success? . 32 V. Costs . 33

I. Facts [ 6 ] The Decision concerns the assessment of an Edmonton commercial property, a single-story office building (the Property), for the 2016 taxation year. The City of Edmonton (COE) classified the Property as a Class B building and assessed the value of the Property at $4,604,000. [ 7 ] The valuation date for the 2016 tax assessment was July 1, 2015. [ 8 ] The Applicant’s assessment complaint challenged the classification of the Property and contended that the Property should be classified as a Class C building.

The complaint referred to two sales of the Property. [ 9 ] The first sale of the Property occurred in June 2011 and the sale price of the Property was $3,200,000 (the June 2011 Sale). This sale occurred about 4 years before the July 1, 2015 valuation date. [ 10 ] The second sale of the Property occurred on January 13, 2016 (the January 2016 Sale). There was reference to the transaction having closed on December 2015 but no argument turned on December as opposed to January timing. The sale price was $3,700,000. The sale was to an “arm’s length,” unrelated purchaser.

This sale occurred about 6 months after the July 1, 2015 valuation date. [ 11 ] The Applicant contended before the CARB that the best indicator of value was the “time adjusted sale price” of the Property (TASP). The TASP, based on the June 2011 Sale price, was $3,722,000. The January 2016 Sale price supported the accuracy of the TASP. The TASP, nearly $1,000,000 lower than the COE’s assessed value, supported the classification of the Property as a Class C building. [ 12 ] The CARB confirmed the classification of the Property as a Class B building and confirmed the COE’s assessment.

The CARB wrote as follows at paras 26 and 27 of the Decision: [26] Sale of Subject – The Board places minimal weight on the 2011 sale finding that it is not a good indicator of value as the sale is over 3 years old. As well, the subject was vacant at the time of sale and not leased out until well after the sale. [27] The January, 2016 sale is a post-facto sale and cannot be used except for the purpose of showing a trend in the marketplace. This post facto sale was further questionable because it was indicated that the sale likely did not take place on the open market. II.

The Application [ 13 ] The Questions for which leave to appeal were sought were set out at para 5 of the Applicant’s Brief: Whether the [CARB] erred by: 1. Failing to apply the legal tests in the use of post facto evidence in an assessment complaint; 2. Failing to recognize the undisputed sale price of the subject property as the best evidence of value; and 3.

Misconstruing and erring in the assignment or application of the burden of proof and onus. [ 14 ] In headings preceding paras 33 and 36 of the Applicant’s Brief, the first question is broken into two issues: “Did the CARB err in its handling of post facto Evidence?” and “Use of post facto evidence”. [ 15 ] The Questions and arguments in the Applicant’s Brief did not expressly refer to the issue of the classification of the Property as a Class B or Class C building but counsel clarified in submissions that if the CARB erred in its use of the evidence of the June 2011 and January 2016 Sales it erred in its classification of the Property.

III. Tests for Leave to Appeal [ 16 ] Leave to appeal was sought under s. 470 of the Municipal Government Act (the Act) in the version in force when the application commenced, not as amended by the Modernized Municipal Government Act , SA 2016 c.

Section 470 provided as follows: 470(1) An 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 ….

(5) 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. [ 17 ] The CARB’s Decision was “a decision of an assessment review board.” [ 18 ] The Applicant did not argue that the CARB lacked jurisdiction or lost jurisdiction in connection with the Decision. No “question of jurisdiction” was engaged.

[19] The application is for leave to appeal alone. The present application is not for judicial review of the Decision. A. Three Tests for Leave to Appeal [20] Subsection 470(5) sets out the tests for leave to appeal. The judge must be satisfied that

a) the appeal involves a question of law,

b) the question of law has sufficient importance to merit an appeal, and

c) the question of law has a reasonable chance of success. The Applicant bears the burden of satisfying the judge that these tests are satisfied: Edmonton (City) v Edmonton (City) CompositeAssessment Review Board, 2012 ABQB 171, Topolniski J at para 11 [Gold Bar]; Canada Safeway Ltd v Calgary (City), 2016 ABQB200, Yamauchi J at para 18. [21] Before turning to whether the Questions raised by the Applicant satisfy these tests, I will discuss the nature of the tests. B. The Tests 1.

Question of Law, not Question of Fact or Mixed Law and Fact [22] The authorities distinguish questions of law, questions of fact, and questions of mixed law and fact. The distinctions areimportant in this context because only questions of law (or jurisdiction) may be appealed under s. 470(5): Canada Safeway Ltd at paras18-20; Alberta (Municipal Affairs) v TransCanada Keystone Pipeline Limited Partnership, 2011 ABQB 460, Belzil J at para 8;Concord Pacific Alberta Properties Inc v Calgary (City), 2017 ABQB 138, Dario J at para 13. (

a) Question of Law [23] An applicant must provide a foundation for concluding that a “question of law” arises from the decision. This stage of theassessment precedes the “reasonable chance of success” stage and, of course, a determination on the merits. For the purposes of this test,it is fair to say that “all that is necessary … is to establish that the board may have made an error of law or jurisdiction:” AssociatedDevelopers Ltd v Edmonton (City), 2011 ABQB 592 Ross J at para 6 [emphasis added]. [24] A question of law is a question about a decision-maker’s appreciation of a legal test, rule, or standard.

For an applicant to raisea question of law, there must be a foundation for concluding that the decision-maker erred in identifying or articulating a material legaltest. Legal error would occur if a decision-maker expressly articulated a test incorrectly. A “covert” error would occur if a decision-maker expressly articulated a test correctly but in its application of the test demonstrated that it had altered the test – i.e., the testarticulated and the test applied were not the same and the test applied was the wrong test.

Legal error would occur if a decision-makerfailed to consider evidence a legal test required it to consider. Legal error would also occur if a decision-maker made a factual findingbased on no supporting evidence. In effect, such an error would alter the legal test by omitting the need for evidence supporting one ormore of its elements. Further, legal error would occur if there were only a “modicum” of evidence of a fact-in-issue contrasted with alarge amount of evidence to the contrary.

In this instance too, there would be an alteration of the legal test through omission of the needfor a proper evidential finding supporting one or more of the elements of the test. See Canada (Director of Investigation and Research)v Southam Inc, [1997] 1 SCR 748, (SCC), Iacobucci J at para 35 ; Concord Pacific Alberta Properties atpara 15; Eau Claire Market Inc v Calgary (City), 2015 ABQB 131, Millar J at para 10; Gold Bar at para 11; Canada Safeway at para18; Edmonton (City) v Alberta (City of Edmonton Composite Assessment Review Board), 2012 ABQB 118, Sulyma J at para 71 [EarleM. Jorgenson]. (

b) Question of Fact [25] A question of fact is a question about what happened. A question of fact concerns “Who did what to whom and when and inwhat manner and at what place?” or “What facts were the case at a particular time and place?” A question of fact is about what existed oroccurred or was the case or what took place. It is not a question about legal rules. [26] Questions of law and questions of fact are reasonably distinct, sufficiently distinct for purposes of appeal rules like s. 470(5).They involve perspectives on different data sets – the data set of law, and the data set of occurrences in the physical world. (

c) Question of Mixed Law and Fact [27] Legal reasoning involves a further operation, the application of legal rules to facts. This is the domain of questions of mixedlaw and fact. A determination of mixed law and fact concerns the outcome, result, or decision based on the facts and the law, or moreprecisely, the application of the law to the facts. The determination does not concern the facts or the law themselves. The determination“mixes” or applies the law to the facts.

The question of whether a decision-maker, in applying the law, came to the correct decision onthe facts is not, generally, a question of law. [28] I note that if there is discretion involved in applying the law to the facts, the exercise of the discretion is a determination ofmixed law and fact: Eau Claire at para 10. (

d) Determination of Mixed Law and Fact Raising a Question of Law

[ 29 ] A determination of mixed law and fact can give rise to a question of law if there is a foundation for the claim that the decision-maker erred concerning the legal rule or standard applied. The error might be that the standard was not properly articulated or (as indicated above) was altered in application. Raising the question of legal error depends on identifying the legal rule applied and the error made concerning that legal rule itself.

That is, a determination of mixed law and fact supports a question of law if there is an “extricable legal error.” [ 30 ] The Supreme Court warned against conflating disagreement with a result with disagreement about the nature of the legal test applied in Teal Cedar Products Ltd v British Columbia , 2017 SCC 32 at para 59 : “The identification of an alleged legal error should be based on the arbitrator’s application of the wrong test, not on the fact that one would have applied the appropriate legal test differently;” the conflation “skips the jurisdiction stage and immediately proceeds with a review of the arbitrator’s analysis of a mixed question.” If the question is, “Did the decision-maker get the test wrong?”, then the question is a question of law.

If the question is, “Did the decision- maker come to the right result?”, then the question is not a question of law. See also Teal Cedar at paras 44 and 45. [ 31 ] It is true that, as the Applicant pointed out, a determination is not immunized from a finding of error of law just because the determination has a “factual component:” Sobeys West Inc v Edmonton (City) , 2015 ABCA 32 , Slatter JA at para 9.

However, some misapprehensions should be addressed that, if accepted without clarification, could have affected this application. [ 32 ] The Applicant stated in para 17 of its Brief that “[t]he misapplication of a legal test to a set of facts is an error of law.” Put in this way, the claim is at best misleading. First, a “misapplication of a legal test to a set of facts is an error of law” only if the application betrayed an extricable legal error.

Again, mere alleged “misapplication” or disagreement with the result of an application of law does not amount to legal error. [ 33 ] Second, it is true that in the criminal law some determinations of mixed law and fact are treated as giving rise to questions of law. See R v JMH , 2011 SCC 45 , [2011] 3 SCR 197 at para 28 , cited by the Applicant.

The Court of Appeal has explained that this categorization is a function of appellate access in criminal cases and does not modify the civil law categorization of determinations as being of mixed law and fact: 1216808 Alberta Ltd (Prairie Bailiff Services) v Devtex Ltd , 2014 ABCA 386 at para 21 .

The Court of Appeal wrote as follows at paras 22 and 23: [22] But this case and others from the Supreme Court do not stand for the proposition that the standard of review for all issues involving questions of mixed fact and law will be correctness …. [23] In the civil context, it is well settled that the application of a legal standard to a set of facts is a question of mixed fact and law: see for eg. Housen v Nikolaisen , 2002 SCC 33 at paras 26-27 , [2002] 2 SCR 235 ….

Whether the standard of review is correctness or palpable and overriding error depends on whether the issue involves an extricable question of law. Unless a legal principle can be readily extracted, questions of mixed fact and law are reviewed for palpable and overriding error: Housen , supra at paras 8, 36 .

If the issue relates to a legal principle, it will be reviewed for correctness. …. [ 34 ] The Applicant stated in para 18 of its Brief that an error of law occurs “when an adjudicator … assigns insufficient weight to relevant considerations.” That is not an error of law but, at most, an assertion of an error of mixed fact and law or an error of fact. A error of law occurs if a decision-maker finds a material fact on no evidence or if there was only a “modicum” of evidence contradicted by large amounts of other evidence: Earle M.

Jorgenson at para 71. [ 35 ] The Applicant stated in para 19 of its Brief that “[w]hile a question may resemble one of mixed fact and law, if the point in controversy is one that may arise in future cases and the argument is about the kinds of information and not about the particular information itself, then a question of law arises.” That proposition is not well-expressed. “Arising in future cases” is not a criterion for identification of a question of law. Were that the criterion, findings of negligence would not be determinations of mixed law and fact but determinations of law.

This would be contrary to Housen . An issue about “kinds of information” is an issue about a legal test. Because the legal test and its application to “kinds” of information is necessarily general, a legal issue will (at least typically) apply to “future cases” turning on other particular information. That is, the Applicant’s statement is properly a reiteration of the extricable error of law point. It is the nature of the issue at stake (a legal issue) that supports characterization as an question of law, not potential application to future cases.

This is the explanation of the passage in Southam relied on by the Applicant (para 36) which concerned, it must be recalled, an issue of statutory

interpretation. 2. Sufficient Importance to Merit an Appeal [ 36 ] For a question to be of “sufficient importance to merit an appeal” the question must not be only “subjectively” important in the sense of being important to an applicant. Rather, the question must be “objectively” important, important to persons other than the applicant alone.

Factors taken into account respecting this test include the jurisprudential value of an appeal, whether the appeal concerns a novel or unsettled issue, and whether the appellate decision would have wide-ranging implications or implications going beyond the dispute between the parties. See Concord Pacific Alberta Properties at paras 25-26; Anthem Riverfront Holdings v Calgary (City) , 2017 ABQB 356 , Tilleman J at para 16; Edmonton (City) v.

Edmonton Composite Assessment Review Board , 2012 ABQB 439 , Michalyshyn J at para 28 [ Mediplex Western ]; Carleo Investments Ltd v Strathcona (County) , 2014 ABCA 302 , Brown JA, as he then was, at para 10; Eau Claire Market at para 10; 908118 Alberta Ltd v Calgary (City) , 2013 ABQB 100 , Kenny J at para 40, Gold Bar at para 11; Canada Safeway at para 18. 3. Reasonable Chance of Success (

a) Nature of the Test [ 37 ] A reasonable chance of success is not a mere possibility of success. Reasonableness imports probability not mere possibility. I would not characterize the threshold as “very low” or “extremely low.” Indeed, in Alberta (Chief Firearms Officer) v Runkle , 2015 ABCA 233 at para 28 , Justice Wakeling equated an extremely low likelihood of success with characterization as “frivolous.” However, a

test of reasonable chance of success does not require that an appeal is likely to succeed or will probably or more probably than not succeed. The test should not be characterized as “demanding.” That would put the test too high and would not be a proper standard at the leave to appeal (as opposed to the appeal) stage of proceedings. I would not attempt to set the reasonableness bar by fixing a percentage of likelihood of success. The statutory language of reasonableness points to a qualitative or normative test rather than a quantitative or numerical test.

The point of the statutory test, in my opinion, is captured by such glosses as “ prima facie case,” “ prima facie meritorious case, “arguable case,” or a case with a “serious arguable point;” a reasonable case is not frivolous, fanciful, trifling, or speculative.

See Stiles (Estate of) v Alberta (Energy and Utilities Board) , 2005 ABCA 308 para 17 ; Altus Group Ltd v Calgary (City) , 2013 ABQB 608 , Eidsvik J at para 52; Concord Pacific Alberta Properties at para 30. [ 38 ] In Boychuk v Edmonton (Police Service) , 2014 ABCA 163 at para 37 , the test for leave to appeal is described as “demanding;” at para 54, the test is described as “a more onerous test – … the likelihood the appeal will be allowed [must be] at least as great as the likelihood it will be dismissed.” That standard would be more rigorous than the standard I identified.

I decline to follow Boychuk in this context because Boychuk concerns a different legislative regime with different decision-making and review processes. [ 39 ] In my opinion, the “reasonable chance of success” test should be read with the “sufficient importance to merit an appeal” test, through the noscitur a sociis or “associated words” interpretive principle. (In the Supreme Court’s

summary, “a term or an expression should not be interpreted without taking the surrounding terms into account:” Opitz v Wrzesnewskyj , 2012 SCC 55 , [2012] 3 SCR 76, Rothstein J at para 40.) An appeal with a “reasonable chance of success” is one that warrants further consideration on appeal. That is, the question is one of sufficient legal uncertainty that a deeper and more extensive examination of the questions should be conducted in an actual appeal.

A question that does not have a reasonable chance of success is one that that may be fairly and justly resolved on the record without the need for further proceedings. [ 40 ] I suggest that this approach is in line with the approach suggested by Justice Brown, then of the Court of Appeal, in Carleo Investments at para 10: “As to the merits, while section 688(3) already requires that the appeal have a reasonable chance of success, it makes sense that the more meritorious that prospective appeal appears to the chambers justice, the more important it is that an appeal panel consider whether an injustice occurred. (See the Hon Roger P Kerans & Kim M Willey, Standards of Review Employed by Appellate Courts , 2d ed (Juriliber, 2006) at 351-52).” It is also in line with the comment of Justice Laycraft, as he then was, in Dome Petroleum Ltd v Alberta (Energy Resources Conservation Board) , [1984] AJ No 195 at para 1 : My role . . . is to determine first whether a question of law or jurisdiction is presented by this appeal and secondly whether it is a question of sufficient substance to justify a review by the Court of Appeal of Alberta. (

b) Reasonable Chance of Success and Standard of Review [ 41 ] To determine whether a question has a reasonable chance of success, the standard of review that would be applied to the question in the appeal must be considered. The standard of review “informs” the reasonable chance of success assessment. If, given the nature of the question and the standard of review that would be applied in an appeal, the appeal would be hopeless – or reasonably hopeless, that is to say without a reasonable prospect of success, further exploration on appeal would not be warranted.

See Calgary (City) v Resman Holdings Ltd , 2014 ABQB 670 , Campbell J at para 36, leave app refd 2016 ABCA 81 ; Concord Pacific Alberta Properties at para 30; Anthem Riverfront Holdings at para 17 . [ 42 ] The Applicant stated at para 31 of its Brief that “[w]hile a preliminary analysis of the standard of review to be applied to a tribunal decision can inform whether there is a reasonable prospect of success, on a leave application the appropriate standard of review need not be addressed and should be left to the panel hearing the appeal,” citing to FortisAlberta Inc v Alberta (Utilities Commission) , 2014 ABCA 264 at para 26 .

The FortisAlberta passage relied on reads as follows: [26] Case law has also directed that consideration should also be given to the applicable standard of appellate review that would govern if leave were to be granted: Atco Electric Limited v. Energy and Utilities Board (Alberta) , 2002 ABCA 45 , 299 AR 337 at para. 14 ; Nycan Energy Corp. v. Energy and Utilities Board (Alberta) , 2001 ABCA 31 , 277 AR 391 at para. 4 .

That said however, in my view, the decision as to what is the appropriate standard of review is to be determined by the panel hearing the appeal and I will give it no consideration in coming to my ruling herein. Note that the first sentence of para 26 confirms the rule. The reasons for leaving issues of standard of review to the appellate panel in this case were not elaborated (“That said ….”) but made sense in context. The case involved 13 different applications for leave. The “standard of review” doctrine was less orderly than it is today. The complications were properly left to the appellate panel.

FortisAlberta speaks to an exception and does not establish a rule. (

c) Applicable Standards of Review [ 43 ] The presumptive standard of review for all three Questions (failing to apply the legal tests in the use of post facto evidence, failing to recognize the undisputed sale price of the Property as the best evidence of value, misconstruing and erring in the assignment or application of the burden of proof) is reasonableness. See Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd , 2016 SCC 47 , [2016] 2 SCR 29, Karakatsanis J at para 22: “Unless the jurisprudence has already settled the applicable standard of review … the reviewing court should begin by considering whether the issue involves the

interpretation by an administrative body of its own statute or statutes closely connected to its function. If so, the standard of review is presumed to be reasonableness …..” See also Concord Pacific Alberta Properties at para 31; Anthem Riverfront Holdings at para 17 . [ 44 ] Under the reasonableness standard of review, [a] court … inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes.

In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law: Dunsmuir v New Brunswick , [2008] 1 SCR 190, 2008 SCC 9 at para 47 .

[ 45 ] The reasonableness standard applies respecting questions of fact, discretion, or policy and to “the review of questions where the legal and factual issues are intertwined with and cannot be readily separated;” the reasonableness standard applies if “a tribunal is interpreting its own statute or statutes closely connected to its function, with which it will have particular familiarity” … and if “an administrative tribunal has developed particular expertise in the application of a general common law or civil law rule in relation to a specific statutory context:” Dunsmuir at paras 53 and 54 . [ 46 ] The use of post facto evidence and evidence of sales price questions are matters (at their highest) of

interpretation and application of the CARB’s home statute and ancillary “common law.” Nothing in the evidence or submissions displaced this standard of review.

None of these are issues of division of powers, issues “both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise”, “true questions of jurisdiction or vires ”, or issues “regarding the jurisdictional lines between two or more competing specialized tribunals:” Capilano at para 24. [ 47 ] There is an argument that the “burden of proof” issue engages both the general law and procedural fairness: Gold Bar at para 11 (“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 ….”).

I will assume that correctness is the appropriate standard of review for the issues raised in this Question, although I recognize that there is a counter-argument that the allocation of the burden of proof is a legal matter falling within the expertise of the CARB warranting review on a reasonableness standard. [ 48 ] Insofar as the standard of review is reasonableness, the task of showing a reasonable chance of success is more difficult: Mediplex Western at para 31.

It is not that there is an elevated test of reasonable chance of success but showing probable error on a reasonableness standard is more challenging than on a correctness standard because of the broader range of decisions acceptable under the reasonableness standard (the “broader margin of appreciation”). IV. Satisfaction of the Tests [ 49 ] The Applicant raised three Questions: whether the CARB committed legal error (

A) in its “handling” of post facto evidence (using the Applicant’s para 33 language), (

B) in “failing to recognize … undisputed sale price … as the best evidence of value;” and (

C) in its

interpretation and application of the “burden of proof and onus.” I will consider whether each Question satisfies the three tests for leave to appeal. A. Post Facto Evidence and Legal Error 1. Question of Law? [ 50 ] The CARB stated that “[t]he January, 2016 sale is a post-facto sale and cannot be used except for the purpose of showing a trend in the marketplace. This post facto sale was further questionable because it was indicated that the sale likely did not take place on the open market.” The CARB did not use the January 2016 Sale evidence to support the TASP theory of value.

Is there a basis for concluding that the CARB made a legal error in its approach to the January 2016 Sale evidence? [ 51 ] In my opinion, there are two straightforward bases for finding that no question of law was raised by the CARB’s treatment of the January 2016 Sale evidence. The Applicant did advance an elaborate and nuanced counter-argument to support the identification of a question of law, but that argument failed too. (

a) Rules of Evidence [ 52 ] For a question of law to be raised by the CARB’s treatment of the January 2016 Sale evidence, there must be a basis for concluding that the CARB failed to follow the governing legal rule. But even if there were a legal rule that concerned the admissibility, use, and weight of post facto sales evidence, the CARB would not have been bound by that rule. Subsection 464(1) of the Act provides as follows: 464(1) Assessment review boards are not bound by the rules of evidence or any other law applicable to court proceedings ….

Since the CARB was not bound by the rules of evidence or any other law applicable to court proceedings, it would be inconsistent to hold that the CARB was bound by a “ post facto evidence rule.” As Justice Dario wrote in Concord Pacific Alberta Properties Inc at para 22 , “generally the Board is free to reject evidence in favor of the other evidence without raising a question of law.” [ 53 ] The Applicant stated at para 26 of its Brief that s. 464(1) “does not mean a tribunal can have complete discretion over which evidence it may chose to accept,” citing to Grant MacEwan Community College v Alberta (Human Rights Commission) , 2000 ABQB 1015 at para 57 .

This case, however, is not authority for the proposition that the CARB is bound by rules of evidence even though s. 464(1) states that it is not. Para 57 of Grant MacEwan confirmed that while the panel was not bound by the rules of evidence it remained “bound by the duty of fairness” and it could not decide based on insufficient or no evidence or on irrelevant considerations. None of these improprieties are entwined in the Applicant’s claim, which is that a rule was not followed.

The language of s. 464(1) cannot be overcome by a claim that it would not be “fair” not to consider the January 2016 Sale evidence as had been urged before the CARB. See also Altus Group Ltd. v. Calgary (City) Composite Assessment Review Board , 2011 ABQB 739 , Nation J at paras 29 and 30; Gold Bar at para 24. [ 54 ] The Applicant stated at para 27 of its Brief that “[a]ll parties appearing before an assessment review board should have the certainty that the board’s evidentiary rulings will be consistent with the law.” The claim is true.

The CARB’s rulings must be “consistent with the law.” But s. 464(1) is part of the law. Moreover, an appeal to “the law” cannot bind the CARB to rules excluded by s. 464(1)

unless s. 464(1) were itself invalid. There was no such argument. The Applicant went on to characterize its position in this way: “the proposed appeal deals with fairness of process.” Again, “fairness” in the abstract does not trump statutory language. And “fairness” involves the same rules (of which s. 464(1) is a part) being applied to the COE, other complaints, and this complaint. (

b) Mixed Law and Fact [ 55 ] Further, s. 464(1) does not deal only with the “rules of evidence” but provides as follows: 464(1) Assessment review boards … have power to determine the admissibility, relevance and weight of any evidence. [ 56 ] In this case, the CARB did not disregard the January 2016 Sale or the June 2011 Sale. It did not attach weight to these sales in relation to the assessment. That was within the CARB’s authority. [ 57 ] The CARB’s determinations were not determinations of fact alone.

The CARB was dealing with a complaint about assessed value and came to a determination about the correctness of the assessed value. The CARB, operating within its statutory matrix, applied (or sought to apply) the legal rules that bound it to the issue of the value of the Property. These rules included the definition of “market value” (s. 1(1)(n)), the bases for complaint (s. 460(1)), and s. 467(3): 467(3) An assessment review board must not alter any assessment that is fair and equitable, taking into consideration (

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

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

c) the assessments of similar property or businesses in the same municipality. (I will return to s. 467(3) below.) The CARB’s decision was a determination of mixed law and fact. [ 58 ] In 697604 Alberta Ltd v Calgary (City of) , 2005 ABQB 512 , an authority relied on by the Applicant, Justice Acton found that the board erroneously failed to take into account a post facto sale. This, however, was a finding on judicial review. Justice Acton expressly found at para 14 that the question before her was one of mixed law and fact.

To similar effect was a finding of Justice Yungwirth in St Albert Housing Society v St Albert (City) , 2014 ABQB 556 at para 32 : [32] … I agree that the question before the CARB regarding the appropriate valuation method or approach engaged a process which involved the application of the provisions of the relevant legislative regime – including the legally recognized valuation methodologies – to the “the characteristics and physical condition of” of Building 101 in order to ultimately determine its market value.

In my opinion, the question of the appropriate method – cost approach, income approach, or direct sales approach – to apply in determining the 2013 assessment of Building 101 involves the selection and application of a legally recognized test or legal standard to a set of facts (the circumstances of Building 101). This description or characterization is consistent with the settled legal principle that the application of a legal standard to a set of facts is a question of mixed fact and law ….

See also Edmonton East (Capilano) Shopping Centres Ltd v Edmonton (City) , 2012 ABQB 445 Michalyshyn J at paras 75-76; BCIMC Realty Corporation v Calgary (City) , 2014 ABQB 344 , Sullivan J at paras 23-26. [ 59 ] Board determinations of outright exclusion or non-consideration of evidence have been treated as determinations of mixed law and fact: Home Depot Holdings Inc v Edmonton (City) , 2017 ABQB 447 , Lee J at para 21; Genesis Land Development Corp v Calgary (City) , 2014 ABQB 57 , Kenny J at para 14. (

c) Post Facto Evidence and Market Value [ 60 ] The foregoing considerations suffice to answer the Applicant’s argument that a question of law arose from the CARB’s treatment of the January 2016 Sale evidence. The CARB was not bound by any evidential rule that might apply and any determination it made was a determination of mixed law and fact. No question of law arose. [ 61 ] The Applicant, as I understood its submissions, had an argument designed to evade s. 464(1) and the mixed law and fact obstacles. The argument had the following main steps. First, a rule relating to the use of post facto evidence was engaged.

Second, this rule was not caught by s. 464(1) and bound the CARB. Third, the CARB (arguably) erred in its articulation of the rule – its reasons show that it got the rule wrong. Hence, even though ordinarily the CARB’s application of a rule to particular facts would be a determination of mixed law and fact giving rise only to questions of mixed law and fact, in this instance the CARB (arguably) committed an extricable legal error supporting a question of law. This, in my view, puts the Applicant’s position at its strongest. (

i) The “ Post Facto Evidence Rule” [ 62 ] The Applicant relied on several judicial decisions dealing with post facto or “hindsight” evidence and valuation, particularly of shares. These decisions support an approach to post facto evidence with the following features: • generally, hindsight, retrospective, or post facto evidence should not be used to establish value at a particular date • the general rule has exceptions, turning on whether the post facto evidence is relevant to o to the correct value of an “unchanged component” of an assessment o the accuracy of projections used in a valuation

o the reasonableness of assumptions made by valuators • nevertheless, the post facto evidence cannot, by itself, establish value as at a particular date [63] Thus, we read the following in Ford Motor Co of Canada v Ontario (Municipal Employees Retirement Board), 2000CarswellOnt 1530, [2000] OJ No 1480 commencing at para 5 (CarswellOnt): 5 …. The established legal principle is that, in the process of valuing shares as at a particular date, hindsight information is generallyinadmissible.

Although it is somewhat difficult to rationalize the judicial decisions in this area, it would appear that two generalexceptions to the principle have been recognized in Canadian case law.

The first exception would appear to be that factual hindsightinformation — but not opinions or mixed facts and opinions — may be used for two purposes: firstly, to compare actual results achievedafter the valuation date against projected or forecasted corporate results said to be reasonably foreseeable on the valuation date; andsecondly, to challenge the reasonableness of assumptions made by the valuators …. 6 The second exception to the general principle would appear to be that hindsight information may be used to determine the correct valueas of the valuation date of an unchanged component such as a mine in existence as of the valuation date …. 7 In New Quebec Raglan Mines Ltd. v.

Blok-Andersen (1991), 4 B.L.R. (2d) 71 (Ont. Gen. Div.), Farley J. stated the general principle atpar. 2: The courts in valuation cases have appropriately determined that hindsight information is not relevant to the valuation process (subject toa narrow exception) and therefore such information would not be admissible.

To deal with the valuation, one must view the situation asof the valuation date (looking back on history and looking forward as to what expectations for the future are as of the valuation date).Even if hindsight turns out “better” as it inevitably will, it is to be disregarded: see Brandt Investments Limited v. KeepRite Incorporated(1987), (ON SC), 60 O.R. (2d) 737. and further stated, in referring to Greenberg, J.’s review, in Domglas Inc. v. Jarislowsky, Fraser & Co., [1980] C.S. 925 (C.S.

Que.), ofthe first general exception to the principle: Greenberg J. [mentions] other authorities which make it clear that subsequently acquired information is admissible for limited purposessuch as measuring the accuracy of projections, or testing assumptions which are used by valuators in the preparation of opinion evidence:see Tabco Timber Limited v. R., (SCC), [1971] S.C.R. 361; Connor v. R., (FC), [1978] C.T.C. 669;and Diligenti v.

RWMD Operations Kelowna Limited (1977), (BC SC), 4 B.C.L.R. 134. [64] To similar effect, see Nunachiaq Inc v Chow, 1993 CarswellBC 524, [1993] BCJ No 179, 8 BLR (2d) 109, affd 1994CarswellBC 2856 (BCCA), Newbury J, as she then was, commencing at para 19 (SC, CarswellBC): 19 From the choice of valuation date, it follows that hindsight evidence — evidence of trends or occurrences taking place after thevaluation date — should not be admitted to bolster or weaken predictions of those occurrences or trends made as at the valuation date.

Inthe much-quoted words of Danckwerts J. in the context of an estate tax case, “It is necessary to assume the prophetic vision of aprospective purchaser at the moment of the death of the deceased, and firmly to reject the wisdom which might be provided by theknowledge of subsequent events.” (Holt v. I.R. Commissioners, [1953] 2 All E.R. 1499 (Ch. Div.) at p. 1501.) This view is clearly inaccord with that taken in various textbooks on valuation: see Bonbright, Valuation of Property, vol. 1 (1937) at p. 84 and Campbell, ThePrinciples and Practice of Business Evaluation (1975) at p. 19, both quoted in V.

Krishna, “Determining the ‘Fair Value’ of CorporateShares” (1987) 13 Can. Bus. L.J. at 137-138. 20 However, Canadian courts have made some exceptions to the rule. In Domglas, Greenberg J. noted three decisions in which hindsightevidence had been admitted to “test the validity of the forecasts and assumptions of the experts where those differed, and thus to assist indetermining whose forecasts were, and accordingly whose valuation as of [the valuation date] was, the more valid” [citing Fulton J in]Diligenti v.

RWMD Operations Kelowna Ltd …. [65] Justice Newbury also provided an explanation for the “exception” concerning the correct value of an “unchanged component”at para 21: 21 …. In [Cyprus Anvil Mining Corp v Dickson, (BC SC), 1982 CarswellBC 277, 40 BCLR 180, Chief JusticeMcEachern] considered the question at greater length and again made an exception in respect of information that assists the Court “toascertain the physical quality of an unchanged component” that existed on the valuation date.

He stated: I have no doubt that [hindsight] evidence is not properly admissible as evidence of value at an earlier date, but I am not satisfied that theexceptions to hindsight mentioned in the next preceding paragraph are the only bases upon which subsequently acquired informationmay be used. I say this because the Court's task is to determine fair value, and value in this case depends in part upon the physical quantity and quality(e.g. tonnage and grade) of ore in the ground.

When the method of valuation is not market value but a discounted cash flow analysis, theprohibition against after-acquired information may well apply to components of the valuation such as metals prices, cost of mining andtransportation, etc. (except to the extent permitted by conventional exceptions), but it is doubtful wisdom to disregard a betterunderstanding of the physical and unchanging components of the subject of the valuation.

Thus the distinction between an altered state ofaffairs, and an altered (usually better) understanding of a continuing state of affairs convinces me the so-called hindsight rule should notalways be followed. Thus, on the issue of tonnage and grade, it is my view that the use of information discovered subsequent to the valuation date, andanalyses using that information, would not offend the hindsight rule because these components of fair value have not changed since thevaluation date.

All that may be changed is one's understanding of those unchanged components, and I reject the suggestion that suchinformation should always be disregarded.

[at pp. 201-202 [40 BCLR]] This ruling was not argued at the appeal level …. [66] See also Debora v Debora, (ON CA) 83 OR (3d) 81 at paras 45-51 and Brown v Silvera, 2011 ABCA109 at para 84: [84] Hindsight evidence cannot be used as the basis of a new opinion. However, it can be used to assist in determining which of theexperts’ evidence has greater validity when there is conflicting opinion as to value based on differing assumptions or forecasts ….

Thetrial judge correctly pointed out at para 558 that: “[h]indsight can assist in determining which of the views of appraisers is correct, whenthose views are disparate: Pocklington Foods Inc. v. Alberta (Provincial Treasurer), 1998 ABQB 279 at para. 315, 159 DLR (4th) 81,affirmed 2000 ABCA 8, 184 D.L.R. (4th) 152.” …. [67] If the decisions reflecting a “post facto evidence rule” were judicial decisions only, the Applicant would be met with theimmediate difficulty of bridging the gap between judicial assessments of value and assessments of value by a board in a tightly controlledregulatory environment.

An argument would be required to justify the use of a rule employed in one litigation context in another verydifferent litigation context. The Applicant, though, provided decisions in which courts in reviewing assessment board decisions relied ona “post facto evidence rule” and decisions of assessment boards that turned on the use of post facto evidence. [68] The Applicant referred to 697604 Alberta Ltd (2005). In this case, one of the bases for Justice Acton’s finding ofunreasonableness was that the municipal government board failed to take into account a post facto sale respecting an assessment.

Thesale took place 18 days after the valuation date and had been preceded by Canada-wide advertising for four months. Justice Acton wroteas follows at paras 21 and 24: [21] In my opinion, there are several problems with the MGB’s comments. First, there is nothing in the evidence to show that thistransaction was not made under “typical market conditions.” The Property was sold on July 18th, 2000 for the sum of $72,150,000. This was just 18 days after the effective date of the valuation required for the 2001 assessment. The sale occurred after a four-month,Canada-wide advertising campaign.

Eight bids for the Property were received and it was sold to the highest bidder. It is difficult toenvision a more typical commercial real estate transaction …. [24] In my view, the MGB’s failure to rely on the evidence of value provided by the recent sale of the Property fails to meet the test ofreasonableness. I agree with the following comments from Re Regional Assessment Commissioner, Region No. 11 v. Nesse HoldingsLtd. et al. (1984), (ON SC), 47 O.R. (2d) 766 (Ont. H.C.J. Div.

Ct.) at p. 767: It seems to me to be worth remembering that where the Assessment Act, R.S.O. 1980, c. 31 requires the determination of what a propertymight be expected to realize if sold on the open market by a willing seller to a willing buyer (s. 18(2)), the price paid in a recent free saleof the subject property itself, where, as in this case, there are neither changes in the market nor to the property in the interval, must bevery powerful evidence indeed as to what the market value of the property is.

It is for that reason that the recent free sale of a subjectproperty is generally accepted as the best means of establishing the market value of that property. ... ...I think that generally speaking the recent sales price, if available as it was in this case, is in law and, in common sense, the mostrealistic and most reliable method of establishing market value. [69] In 697604 Alberta Ltd v The City of Calgary (unreported oral decision, No 0801-06228) [Great West Life], an appeal from amunicipal government board assessment, the applicants contended that the board improperly relied on post facto evidence.

Justice Lutzmade the following comments, in line with the judicial decisions described above: Having looked at the authorities … I am of the view that subsequent sales information or post facto evidence … is acceptable to utilizeas a measure of valuation in the dynamically economic market at the material time in Calgary, so long as it is time adjusted (70-71). [after referring to Nunachiaq Inc v Chow] that … gives some credence to the position taken by the Board in considering post factoevidence, for the assessor to test the validity of the forecast and the assumptions of the experts, particularly where they differ, and theydid here (72).

Reviewing the matters, the parcels of land where there was post facto evidence, brought me to the belief that none of it was used tocreate a valuation. It was used to test. And that is acceptable (74). [70] The Applicant also referred to decisions in which an assessment board used post facto sales evidence to support or reject anassessment.

In Edmonton (City) v 781128 Alberta Ltd, [2002] AMGBO No 196, the Alberta Municipal Government Board relied on apost facto sale not as a basis for valuation but to support the appraisal and to indicate a trend referred to in an ARB decision (at para 58).In Ruppert v Calgary (City), [2008] AMGBO No 181, the Board relied on a post facto sale to confirm that the property was not over-assessed (at para 21). In Sears Canada Inc v Calgary (City), [2004] AMGBO No 106, the Board referred to a sales agreement dated ayear after the valuation date.

The agreement was evidence of a trend and “[gave] an indication of the market value” in the year when theagreement was entered into (at para 57 – not, I note, in the prior year of valuation). In CARB 75472P-2014, the Calgary AssessmentReview Board referred to post facto sales as supporting the sales price of the assessed property (at para 52). Each of these decisionsrefers to the post facto evidence without elaboration or any reference to any “rule” governing the use of such evidence.

None of thesedecisions referred to any judicial decisions respecting the use of post facto evidence. (ii) Not a “Rule of Evidence”? [71] Under s. 464(1), the CARB was not bound by “the rules of evidence or any other law applicable to court proceedings.” Theterms “rules of evidence” and “law applicable to court proceedings” must be read together. Subsection 464(1) could not, for example, be

interpreted to immunize the CARB from all legal rules whatsoever. The subsection precludes the application of “rules of evidence” and“court proceedings law”, that is to say, procedural rules applicable in judicial proceedings. The subsection deals with “adjective” or“adjectival” law rather than “substantive” law.

As procedure is not at issue, I will therefore set aside the words “law applicable to courtproceedings” and address the scope of the words “rules of evidence.” [72] To evade s. 464(1), the Applicant must show (at this stage, by at least providing a foundation for a showing) that the rule theApplicant claims the CARB got wrong is not a “rule of evidence.” A “rule of evidence” would include the common law admissibilityrules and statutory admissibility rules (e.g. in the Alberta Evidence Act). These rules regulate what information may be considered in ahearing or whether information may be considered at all.

In this case, there was no issue around admissibility or exclusion of evidence.The CARB did not deny the admissibility of the post facto sale evidence. It was referred to in the Decision as an element of the positionof the Applicant (para 10) and was referred to in the position of the COE (para 18, the evidence “should only be used for trendingpurposes”). From the Applicant’s perspective, the problems with the CARB’s treatment of the post facto evidence related to its use ratherthan its admissibility.

The Applicant urged (as I understood the argument) that the rule in question is not a general rule of admissibilitybut a rule of substantive law or a rule akin to substantive law. [73] Neither legislation nor regulation expressly set out a post facto evidence rule that might be binding on the CARB.

The rule,then, would either be a “common law” rule recognized in board decisions or a rule implied by legislation or regulation, in either caseconfirmed as binding boards in judicial assessments of board decisions. [74] There are rules with evidential effects that might be classified as “substantive” law rather than law of evidence. In argument,Ms. Hurlburt provided an analogy to the transformation of solicitor-client privilege from a rule of evidence to a substantive rule,discussed in Solosky v The Queen, (SCC), [1980] 1 SCR 821, Dickson J, as he then was.

Another analogy might be to theparol evidence rule: Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53, [2014] 2 SCR 633, Rothstein J at para 59 and Gainers Incv Pocklington Financial Corporation, 2000 ABCA 151 at para 15, and in connection with the Statute of Frauds, Haan v Haan, 2015ABCA 395.

Yet another analogy might have been to the old rules limiting the admissibility and use of after-the-fact evidence on theissue of the intention of a transferor of property confirmed in Shephard v Cartwright, [1955] AC 431 (HL) at 445, effectively abrogatedby the Supreme Court in Pecore v Pecore, [2007] 1 SCR 795, 2007 SCC 17, Rothstein J at para 59. [75] I grant the possibility that a rule with evidential effects could be characterized as forming part of the substantive law ratherthan the law of evidence.

However, in my opinion, there is no post facto evidence “rule”, in the sense of a special rule devised to dealwith hindsight or post facto sales evidence as particular type of information. Insofar as reference is made to such a rule by judges, it is asort of shorthand for considerations of relevance and circumstantial evidence. The true “rule” engaged by post facto evidence isrelevance. Relevance concerns the relationship between information and a fact-in-issue.

A fact-in-issue is either directly set by thesubstantive law (e.g. the elements of a cause of action) or as a fact-in-issue relevant to a fact-in-issue directly set by the substantive law(as motive may be relevant to whether a defendant committed a cause of action). In the case of valuation, the fact-in-issue is marketvalue as of the valuation date. Market value depends on information that is available on the valuation day, in the circumstances thatprevail on the valuation day. Critically, market value is a prediction, based on market conditions and information available at the time.

Itis not a “fact”: Applicant’s Brief, Tab C, 2016 COE Property Assessment Law & Legislation Brief, pp 61-65. Post facto evidence is notrelevant to the issue of market value because, being after-the-fact, it was not known at the valuation date. It could not have been knownto support the prediction of value. Further, post facto evidence does not necessarily emerge from the conditions that obtained on thevaluation date.

The “exceptions” to the “post facto evidence rule” are not exceptions to a legal rule but examples of types of situations inwhich after-the-fact evidence is relevant to some issue other than market value itself. Throughout, the use of the evidence is guided bythe legal principle of relevance. [76] I also note that Justice Acton’s decision in 697604 Alberta Ltd (2005) and board decisions using post facto evidence do notprove the existence of a legal rule beyond the rule of relevance.

These decisions show only that post facto evidence may sometimes berelevant to issues that relate to assessments of market value. [77] Regardless of whether it is technically correct to speak of a “post facto evidence rule,” the heart of the use of this evidence isrelevance.

Whether there is a special rule or just the general rule of relevance at work, the rule is and could only be a rule of evidence.Hence, even if there is a “post facto evidence rule” it does not escape the scope of s. 464(1). [78] The true concern behind the Applicant’s argument respecting the “post facto evidence rule” is that the CARB did not use theevidence in the manner contended for by the Applicant before the CARB. The CARB did not use the evidence in the way, for example,that other boards had used roughly similar evidence in other assessment decisions.

That does not make the CARB’s decision legallywrong, as violating a binding legal rule. The concern is that the CARB’s use of the January 2016 Sale evidence was not reasonable. Butthat concern goes to a question of mixed law and fact and the reasonableness of the CARB’s determination, as might be explored injudicial review. The concern does not relate to a question of law. And if there is no question of law, there is no appeal. [79] I do not suggest that the CARB would have been entitled through s. 464(1) to ignore the principle of relevance and to decideirrationally or arbitrarily.

Were there no evidence supporting its determination, there would be (a question of) legal error.

In this case, an“irrationality” or “no evidence” argument was neither raised nor would it have had purchase. (iii) Extricable Legal Error? [80] If there were a “post facto evidence rule” and if it were not simply a “rule of evidence” and so bound the CARB, did theCARB err in its articulation of the test by failing to refer to all of the exceptional uses of post facto evidence and by failing to considerwhether the January 2016 Sale evidence should have been understood as corroborating the value of the Property asserted by theApplicant? [81] If para 27 of the CARB decision were considered by itself the CARB’s description of the “rule” could be judged too brief andmissing some exceptional uses of post facto evidence.

Para 27 stated that

[27] The January, 2016 sale is a post-facto sale and cannot be used except for the purpose of showing a trend in the marketplace. This post facto sale was further questionable because it was indicated that the sale likely did not take place on the open market.

As summarized above, the “rule” has the following features: • generally, hindsight, retrospective, or post facto evidence should not be used to establish value at a particular date • the general rule has exceptions, turning on whether the post facto evidence is relevant to o to the correct value of an “unchanged component” of an assessment o the accuracy of projections used in a valuation o the reasonableness of assumptions made by valuators • nevertheless, the post facto evidence cannot, by itself, establish value as at a particular date The “trend” reference in para 27 would be to accuracy of projections used in a valuation (and would be consistent with the use of post facto evidence for trend confirmation in other board decisions). [ 82 ] There are two difficulties with the Applicant’s bid to identify an extricable error of law (besides there being no law to extricate).

On the evidence, none of the other exceptions to the general exclusionary rule were engaged, and read in context, para 27 did not display error. [ 83 ] The Applicant contended at para 45 of its Brief that “[t]he CARB erred in law in limiting the use of the post facto sale to establish a trend, rather than using the post facto evidence to assist in determining whether the view of the agent or the assessor was correct.” The Applicant here appears to be alluding to the Court of Appeal decision in Brown v Silvera at para 84 .

But in that case, as quoted above, the context was in fact one of conflicting opinions about trends: “[ post facto evidence] can be used to assist in determining which of the experts’ evidence has greater validity when there is conflicting opinion as to value based on differing assumptions or forecasts …. The trial judge correctly pointed out at para 558 that: “[h]indsight can assist in determining which of the views of appraisers is correct, when those views are disparate ….” [emphasis added]. In this case, the CARB expressly referred to the relevance of post facto evidence to trends.

But in this case, there were no conflicting opinions based on differing assumptions or forecasts. Hence, trend evidence was not relevant to resolve the difference between the Applicant’s approach and the COE’s approach to valuation.

Importantly, Brown v Silvera is not authority for a free-standing use of post facto evidence to decide which assessment is correct. [ 84 ] To elaborate concerning the lack of a “reasonableness of assumptions” issue: It was not that assumptions made by the COE were at issue; rather, the Applicant challenged the entire approach of the COE and sought to have value imputed on the basis of the TASP of the June 2011 Sale. The Applicant’s point was that the COE’s approach and result were wrong and that its approach and result were right.

At para 44 of its Brief the Applicant wrote that “[the January 2016 Sale] … confirmed the opinion of the Complainant’s agent that the [TASP] was the best indicator of value and that the income parameters the agent wished to employ yielded the most accurate assessment.” That is not a claim about the COE’s assumptions. [ 85 ] The Applicant suggested that the “unchanged component” exception was engaged, the unchanged component being the Property.

The “unchanged component” exception was articulated in relation to specific circumstances, as described in para 21 of Justice Newbury’s decision in Nunachiaq Inc v Chow quoted above. Those circumstances are not the circumstances of the assessment under consideration. Moreover, even if the Property was physically unchanged, that did not show that the market value of the Property was unchanged. [ 86 ] Hence, on the evidence, none of the exceptions to the “rule” were engaged. The CARB’s decision must be read in light of the evidence and para 27 must be read with para 26.

Read in light of the evidence, the CARB claim that “[t]he January, 2016 sale is a post- facto sale and cannot be used except for the purpose of showing a trend in the marketplace” was true in that the evidence had no other use. [ 87 ] Further, the CARB stated in para 26 it had “placed minimal weight on the 2011 sale.” In addition, “the subject was vacant at the time of sale and not leased out until well after the sale.” The June 2011 Sale was the foundation for the TASP indicator of value. The CARB had rejected that as an appropriate foundation for a value assessment.

The January 2016 Sale, then, might only confirm what the CARB had concluded had no significant weight on the valuation. That is, if the January 2016 Sale were understood to be relevant as having a confirming value, it would be confirming what was already rejected. If the June 2011 Sale was not an accurate indicator of value a later sale at amount equivalent to the time adjusted price of that sale did not – or better, did not necessarily – show that the 2011 number was right. From the CARB’s perspective, it was a second wrong number confirming an earlier wrong number.

The Applicant’s argument is that another inference from the January 2016 Sale was that the earlier number was right. But this contention shows that the real issue between the Applicant and the CARB concerns the appreciation of evidence and the drawing of conclusions, not following or ignoring any legal rule. [ 88 ] In any event, these considerations militating against a finding of extricable error also go to the issue of the chance of success of the appeal to which I will turn below. 2.

Sufficient Importance to Merit an Appeal? [ 89 ] It is true, as the Applicant stated, that “[t]he proper treatment of post facto sales is an issue which will arise in many assessment complaints:” Applicant’s Brief, para 26. The Applicant in fact provided some board decisions in which post facto sales information was considered. This point, though, cuts against the Applicant. The issue will come up and it is an issue that has come up. But the assessment system has functioned well enough without a formalized post facto evidence rule to this point. The need for judicially

formalizing a post facto evidence rule now (when it wasn’t needed before) wasn’t addressed. [90] The Applicant stated that “[t]his was a rare case in which the Property had sold twice, once before the statutory valuation date… and then again shortly after the valuation date:” Applicant’s Brief, para 4.

The Applicant submitted that “the June 2011 sale and theJanuary 2016 sale act as bookends by which the reasonableness of the City’s assessment could be tested:” Applicant’s Brief, para 35.The Applicant relied on numerous cases dealing with post facto sales as valuation evidence, including municipal tax assessment cases.There is no jurisprudential need for an appellate decision.

While post facto sales cases may be common, two-sale “bookend” cases,particularly when one sale occurred over 3 years from the valuation date and the other sale occurred about 6 months after the valuationdate (one sale early, the other late) will be, as the Applicant said, rare. [91] In my opinion, the issue is not of sufficient importance to merit an appeal. 3.

Reasonable Chance of Success? [92] In my opinion, the Applicant’s arguments about the CARB’s handling of the post facto evidence have no reasonable chanceof success on appeal. [93] As indicated, in my opinion, there is no legal rule relating to post facto evidence binding on the CARB. The admission anduse of this evidence is a matter of relevance, weight, and drawing of inferences. [94] If there were legal a rule respecting the use of post facto evidence, the CARB would not be bound by it, through the operationof s. 464(1).

There is no foundation for a finding that there is a legal rule concerning post facto evidence that would be a rule other than arule of evidence. [95] The CARB’s use of the post facto evidence was a determination of mixed fact and law. This determination could supportquestions about the weight the CARB gave to the evidence and the inferences it drew from the evidence. None of these are questions oflaw. [96] An additional consideration was that the CARB did not look only to the post facto nature of the January 2016 Sale evidencebut to its relevance to market value.

The CARB noted that the January 2016 Sale evidence was “further questionable because it wasindicated that the sale likely did not take place on the open market.” I will return below to the “arms length”/open market distinction. Atthis juncture, the point is that the CARB gave the January 2016 Sale evidence lower weight because of its context, or better, its lack ofevidential linkage to market value.

An additional difficulty with the January 2016 Sale evidence was that there was a lack of evidencethat the market conditions in January 2016 were the same or sufficiently similar to the market conditions on the valuation date. UnlikeJustice Acton’s 697604 Alberta Ltd (2005) decision, the January 2016 Sale was not manifestly an open market sale occurring just a fewweeks (e.g. 18 days) after the valuation date.

The CARB’s weighing of the evidence did not raise a question of law. [97] If there were a legal rule respecting post facto evidence and if that rule were not a rule of evidence but bound the CARB, theCARB did not err in applying the rule. No extricable legal error occurred. First, the evidence did not support the availability of any“exceptions” to the general irrelevance of post facto evidence.

If any error occurred in the CARB’s description of the “rule” it washarmless error since none of the exceptions not mentioned by the CARB were engaged on the facts. [98] Furthermore, the presumptive standard of review respecting the CARB’s

interpretation of any (non-statutory) legal rulerespecting post facto evidence is the deferential standard of reasonableness, not correctness. There was no indication that thepresumptive standard of review was rebutted in the circumstances. As the Court of Appeal observed in St Albert Housing Society v StAlbert (Composite Assessment Review Board), 2017 ABCA 129 at paras 26 and 27, [26] ….

On a reasonableness test, “it is not for the courts to reweigh the evidence considered by the tribunal”: Canadian Artists’Representation v National Gallery of Canada, 2014 SCC 42 at para 30, [2014] 2 SCR 197 …. [27] In our view, it was not open to the chambers judge to substitute her view of the relevance and weight of the Bourgeois appraisals forthat of the CARB, a highly specialized tribunal created to review decisions of assessors as to valuation of property.

The CARB was notunreasonable in deciding to accord the appraisals little weight on the basis (1) they were not prepared for the purpose of assessing themarket value of the whole property; and (2) the time of valuation did not align with the time set out for assessment in the governingregulation. [99] On the issue of the reasonableness standard of review bearing on the CARB’s approach to post facto evidence and theCARB’s treatment of the January 2016 Sales evidence, the CARB’s regulatory context must be considered. [100] At the foundations of the CARB’s work are basic taxpayer rights, described by Justice Yungwirth in 1544560 Alberta Ltd vEdmonton (City), 2015 ABQB 520 at para 40: [40] It is a principle of municipal taxation law that the taxpayer has two distinct rights: (

i) a right to an assessment which is not in excess of that which can be regarded as equitable; and (ii) a right not to be assessed in excess of actual value …. In this instance, the focus is actual value rather than equity. [101] Under s. 1(1)(

n) of the Act, “market value” means the amount that a property, as defined in section 284(1)(r), might be expected to realize if it is sold on the openmarket by a willing seller to a willing buyer.

[ 102 ] Under s. 289(2)(b), “each assessment must reflect … the valuation and other standards set out in the regulations for that property.” Those standards governed the COE assessment of the Property. [ 103 ] Under s. 467(3), (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. An assessment review board like the CARB is not bound by “the valuation and other standards set out in the regulations,” but those standards are to be “taken into consideration.” [ 104 ] The Matters Relating to Assessment and Taxation Regulation (MRAT) provides in

Part 1 (Standards of Assessment) as follows in ss. 2, 3, and 6: Mass appraisal 2 An 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. Valuation date 3 Any assessment prepared in accordance with the Act must be an estimate of the value of a property on July 1 of the assessment year. Valuation standard for a parcel and improvements 6(1) When an assessor is preparing an assessment for a parcel of land and the improvements to it, the valuation standard for the land and improvements is market value unless subsection (2) or (3) applies. The MRAT, then, particularly s. 3, imposes constraints on evidence of market value.

The value is to be as of the valuation date, not before and not after. [ 105 ] Subsections 10(2) and (4) of the MRAT provide as follows:

(2) In preparing an assessment for property, the assessor … must follow the procedures set out in the Alberta Assessment Quality Minister’s Guidelines.

(4) The assessor must, in accordance with the procedures set out in the Alberta Assessment Quality Minister’s Guidelines, declare annually that the requirements for assessments have been met. The 2015 Alberta Assessment Quality Minister’s Guidelines (Ministerial Order No. MAG:016/15) refer to the “Manual,” defined in s. 1.1(

i) of the Guidelines to mean “the 2015 Recording and Reporting Information for Assessment Audit and Equalized Assessment Manual.” According to s. 2.0 of the Guidelines, The duties and procedures described in the [Act], the [MRAT], and these Guidelines that an assessor must follow in preparing an assessment or in reporting information include meeting the requirements of an annual assessment audit [emphasis added]. Thus, for example, under s. 2.1(

a) of the Guidelines, “[f]or the purposes of

section 12 of the Regulation, the assessor must obtain and record the information that is outlined in the Manual;” and under s. 2.2(a), “[f]or the purposes of section 14(1) of the Regulation … the assessor is required to provide information about property to the Minister in the form prescribed in the Manual.” [ 106 ] The Manual (Ministerial Order No. MAG: 016/15) provides at p 51 as follows: The annual audit ratio study period ends June 30 of the assessment year being analyzed ….

For the purposes of assessment audit, the assessor must annually report sales that occurred within the three sales periods (i.e., 36 months) prior to the valuation date for all actual use groups. For example, for the 2013 assessment year the valuation date would be July 1, 2013, and the three sales periods would be: (1) from July 1, 2012, to June 30, 2013,

(2) July1, 2011, to June 30, 2012, and

(3) July 1, 2010, to June 30, 2011. However, within municipalities that have an average of 100 single family dwelling (SFD) sales per year flagged for inclusion in the ratio study, it may be acceptable to report only the sales from the most recent sales period for SFD properties (in the above example the most recent sales period is July 1, 2012 to June 30, 2013) …. Thus, the Manual confirms the approach of the MRAT. Relevant sales do not occur after the valuation date.

Prior sales are considered to inform the “ratio study,” but the Manual limits consideration to sales taking place within 36 months before the valuation date. (A “ratio study” concerns the relationship of appraised or assessed values and market values; it measures “the level and uniformity of assessments relative to market value:” Manual p 1.)

[107] Again, the CARB would not be bound by such restrictions. Also, the Applicant is right that the focus of the Manual is on auditrequirements. It is not true, though, that the Manual provisions have “nothing to do with the assessment of individual property values.”Section 2 of the Manual imports the Manual approach into assessments. It would not make sense for audit requirements to have “nothingto do” with assessments.

The reason the audit requirements were established would be to ensure that assessments were based on therequired data (it would not make sense for an assessor to say, “here’s the information you require but I assess property using other data”). [108] The point of referring to this regulatory chain (and there was no suggestion that the CARB ignored, misinterpreted, ormisapplied any of its elements) is that the approach of the CARB to the post facto evidence aligned with the MRAT, the Guidelines, andthe Manual. The regulatory framework is in place to promote fairness and equity in assessments.

As stated at p 1 of the Manual (s. 1.0),“[s]ubmissions of data from municipalities to Alberta Municipal Affairs form the heart of the annual audit program, which checks forcompliance with regulated assessment standards.” Three implications emerge from this alignment.

First, any “post facto evidence rule”must be interpreted in this regulatory framework and must not be considered as if the rule were at work in a judicial valuation context.Second, at the very least, the regulatory framework (as does the judicial “rule”) supports a general approach of not considering post factoevidence in the valuation as of the valuation date. Third, the restrictions of the regulatory framework provide a pan-Provincial uniformstandard for what counts as reasonable data to consider in an assessment and so for what would not count as reasonable data to considerin an assessment.

These considerations support the reasonableness of the CARB’s

interpretation of any “post facto evidence rule” in thecircumstances of this case. [109] Setting the CARB’s decision in its regulatory context confirms that the Applicant’s appeal does not have a reasonable chance ofsuccess. [110] Thus, in my opinion, no question of law arises respecting the CARB’s treatment of the post facto evidence, and if a question oflaw did arise, it would not be of sufficient importance to warrant an appeal and the appeal would not have a reasonable chance of success. B.

Sale Price and Legal Error [111] The CARB stated at paras 26 and 27 that [26] Sale of Subject – The Board places minimal weight on the 2011 sale finding that it is not a good indicator of value as the sale isover 3 years old. As well, the subject was vacant at the time of sale and not leased out until well after the sale. [27] The January, 2016 sale is a post-facto sale and cannot be used except for the purpose of showing a trend in the marketplace. Thispost facto sale was further questionable because it was indicated that the sale likely did not take place on the open market.

The Applicant contended that a question of law arose respecting the CARB’s failure to “apply the evidence of the value of the subjectproperty arising from a sale:” Applicant’s Brief, para 47. By this I took the Applicant to refer both to the June 2011 and the January2016 Sales. 1. Question of Law? [112] The Applicant raised no question of law. The Applicant stated that “[i]t has long been established that the sale price of a subjectproperty is the best indicator of value:” Applicant’s Brief, para 46. That claim, however, does not describe a legal rule.

At best, the claimis partially true or true only in certain circumstances. [113] Again, under s. 1(1)(

n) of the Act, “‘market value’ means the amount that a property, as defined in section 284(1)(r), might beexpected to realize if it were sold on the open market by a willing seller to a willing buyer.” The approach of the Act is consistent withold authority that market value is the price that a person who is not obliged to sell would obtain from a purchaser who is not obliged tobuy.

The price would be tested by competition, that is, on the open market: Montreal v Sun Life Assurance Co of Canada, (UK JCPC), [1952] 2 DLR 81 (JCPC), Lord Porter at 88. [114] While a sale is a fact and market value is a prediction, a sale that occurred close to the valuation date, based on reasonablemarket place exposure (so the market has an opportunity to work), could be good evidence of market value. But sale price per se is notnecessarily good evidence of market value.

A sale may have occurred at a time sufficiently remote from the valuation date that itsprobative value concerning valuation date value is low (with the passage of time may come changes in the marketplace yielding changesin market value). A sale by a seller with unusual motivations (e.g. a need to sell because of the termination of a business or domesticrelationship) or by a buyer with unusual motivations (e.g. a need to acquire a property immediately) could impair the probative value ofthe sale price. A sales price may have been motivated by values other than the value of a property itself (e.g. special fi

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