La Caille North Point Inc v Calgary (City), 2020 ABQB 803

Court of Queen’s Bench of Alberta Citation: La Caille North Point Inc v Calgary (City), 2020 ABQB 803 Date: 20201222 Docket: 2001 00785 Registry: Calgary Between: La Caille North Point Inc., as represented by AEC Property Tax Inc. Applicant - and - The City of Calgary and the Calgary Assessment Review Board Respondents _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice E.J.

Sidnell _______________________________________________________ Introduction [ 1 ] The Applicant, La Caille North Point Inc., as represented by its agent AEC Property Tax Inc (La Caille), is the owner of a 78.2 acre parcel of land in northeast Calgary (the Parcel). In its 2019 tax assessment for the 2018 year, the Respondent, The City of Calgary (the City), assessed the Parcel in three portions as follows: (

a) a 1.8 acre portion as reserve land, which has “no saleable” value, for a total of zero dollars; (

b) a 53.2 acre portion of the Parcel (the 53.2 Acre Portion) as farmland at the regulated rate, for a total of $18,620; and

(

c) a 23.2 acre portion of the Parcel (the 23.2 Acre Portion) at market value, for a total of $17,208,880. [ 2 ] La Caille accepted the assessment on the first two portions, but challenged the assessment of the 23.2 Acre Portion before the Respondent, the Calgary Assessment Review Board (CARB), on the basis that it should also have been assessed as farmland. The CARB heard the complaint on October 15, 2019 (the Hearing) and on November 25, 2019 issued a decision (the Decision) dismissing the complaint and upholding the City’s assessment. [ 3 ] La Caille seeks judicial review of the Decision.

All of the parties agree that the standard of review is reasonableness: see Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 , at para 51 . La Caille, relying on Vavilov , at para 101 , submits that there was a failure of rationality internal to the reasoning process and that the Decision is untenable in light of the relevant factual and legal constraints that bear on it. La Caille further submits, relying on Vavilov , at para 102 , that the Decision is flawed because it simply repeats statutory language, summarizes the arguments made and then states a peremptory conclusion.

Issues [ 4 ] This application for judicial review raises the following issues: (

a) Issue 1: Did the CARB misconstrue the facts regarding the farming operations on the 23.2 Acre Portion? (

b) Issue 2: Did the CARB fail to apply the correct test to determine whether the 23.2 Acre Portion was a non-conforming use under s. 643(2) of the Municipal Government Act RSA 2000, c M-26 [ MGA ]? (

c) Issue 3: Does the Decision reveal a rational chain of analysis?

Background and the Decision [ 5 ] In 2018, in addition to the reserve portion, there were the following two land use designations for the Parcel: (a) “Commercial - Corridor 1” or “C-COR 1” which provides for a number of permitted and discretionary uses, mainly commercial in nature, but such uses do not include farming; and (b) “Special Purpose – Future Urban Development” or “S-FUD”: which includes “Extensive Agriculture” as a permitted use. [ 6 ] As discussed below, 11 acres of the west portion of the Parcel was farmed (the West 11 Acres Farmed) in an area designated in part as C-COR 1 and in part as S-FUD.

The portion of the Parcel designated as C-COR 1, less that part of the West 11 Acres Farmed on C-COR 1 land, is the 23.2 Acre Portion. As a result, the entire 23.2 Acre Portion had a land use designation of C-COR 1. [ 7 ] Both La Caille and the City referred to a loam pile (the Loam Pile) in their submissions which, in 2018, covered 11.59 acres on the northern portion of the 23.2 Acre Portion.

In 2019, some of the loam was spread across the Parcel and the remainder was exported from the Parcel. [ 8 ] It is to be noted that both the West 11 Acres Farmed and the Loam Pile were sometimes referred to as the “11 acres” during the Hearing and in La Caille’s written submissions; however, they are located in different areas of the Parcel. [ 9 ] La Caille correctly notes that the essence of the CARB’s reasoning is set out in paragraphs 13 to 15 of the Decision: The Board finds that the issue before the Board is whether the subject property should be assessed as 100% farmland.

No evidence was presented by the Complainant to argue the C-COR 1 rates applied to the market area of the subject parcel are incorrect. The Board considered the multiple land use designations and the respective listed uses on the property. The Board agrees with the calculation of the assessed value, assessing the 11 ac of active extensive farming with those lands that have the S-FUD land use designation (53.2 ac), and the remainder of the lands that have the land use district C-COR1 at the market rate.

The Board acknowledges that C-COR1 land use designation does not permit extensive agriculture as a new use, permitted or discretionary, and therefore the 23.2 ac designated as C-COR1 which has not been actively farmed and would not be permitted; and therefore, should not be assessed using the regulated farmland rate. Issue 1: Did the CARB misconstrue the facts regarding the farming operations on the 23.2 Acre Portion? [ 10 ] La Caille submits that both the 53.2 Acre Portion and 23.2 Acre Portion should have been assessed as farmland and points to the following evidence before the CARB: (

a) an invoice, dated November 27, 2018, to La Caille for “Fall Ground Tillage” described as “Custom tilled and turned over 73 acres of farmland on County Hills Blvd & 60 th St. NE, too [ sic ] prepare land and soil for farming in 2019”; (

b) a contract, dated February 27, 2019, for the spreading and export of loam from the Loam Pile; (

c) an email, dated March 28, 2019, from La Caille’s senior accountant referencing, among other things, “verbal contracts with

the farmers”; and (

d) photographs showing various aspects of the Parcel in 2017, 2018 and 2019, including the removal of the Loam Pile by May 2019; but without specific locations where these photographs were taken. [ 11 ] La Caille argued in its written submission to the CARB that for assessment purposes the use of the Parcel should fall within the meaning of “farming operations” as set out in s. 2(1)(

f) of the Matters Relating to Assessment and Taxation Regulation, 2018 , Alberta Regulation 203/2017 ( MRAT 2018 ) and should attract a farmland assessment for the entire Parcel, not just the 53.2 Acre Portion. La Caille stated that the Parcel: ... has historically been utilized as farmland and this continues to be the intended use. The [Parcel] underwent a land use designation change in 2008/2009. At this time the [Parcel] owners applied for the entire parcel to change from ... S-FUD ... to Commercial Land.

The application for the land use was granted however, the land use change was only granted for the northern portion of the parcel. City Council did not grant re-designation for the entire parcel, the southern portion of the parcel was left as ... S-FUD ... In addition, the [Parcel] submitted a land use re-designation application in 2014. This land use re-designation has been and continues to be under review since the initial application. It is evident that the development of the [Parcel] is not an immediate operation and that any intent of development is not within the foreseeable future.

The decision of City Council to limit the parcel re-designation to the northern half, has severely impacted the development opportunity of the property. This decision has left the property in a farmland state since the original application date. For the current assessment tax year, the City Assessment Department has taken the storage of a temporary loam pile as an indication of commercial activities and stated that the site can no longer be utilized as farmland even though there has been continued farming operations on the site. This condition is set out in MGA Section 643 (2) ...

However, there was no intent from the owner to sell the loam for commercial purposes nor has any commercial activity commenced on the site. ... the [Parcel] owner has redistributed the loam over the parcel to allow for greater cultivation of the property. There has been no application or intention to commence commercial or development operations on site. Further, farming operations continued on approximately 11 acres of the western portion of the [Parcel] ... This indicates the continued use as farmland and does not represent a non-conforming use of land. ...

The current owner has had continual verbal contracts in place with farmers to cultivate the land and for the purpose to remain farmland. In addition, the owners contracted [a company] to till the ground in fall of 2018 for further utilization of the subject property for cultivation. This is a clear indication of the physical condition of the property as farmland with no commercial operations as of December 31, 2018. . . .

Nowhere in [the definition of “farming operations” in MRAT, 2018 ] does it state that the entirety of the parcel must be farmed for it to be considered 100% Farmland. ... [emphasis in original] [ 12 ] At the Hearing, La Caille acknowledged that farming operations were not occurring on the entire Parcel.

In the following exchange, La Caille’s representatives clarified, in response to questions from a member of the CARB, that farming operations were on the West 11 Acres Farmed and it was on that basis that La Caille submitted that the farming classification should apply to the entire Parcel: Q So on December 31st, 2018, there was not farming operations going on? A On the west side of the parcel. Q On the west side there were, but on the north side there was not? A Not on the loam pile, which is 11 acres. Q So of the entire property, the west side is being farmed - - A M-hm.

Q - - the north Side is being prevented from farming. What about the other two sides? Were they being farmed? A No. No. As you can see in the aerial photo on page (indiscernible). Q They were not being farmed. So what’s the basis for asking for a farmland assessment because I think there is a reference on page 41 to the definition of “farmland”. A Yes. So page 41 provides the definition of “farmland”, but nowhere in that definition does it stipulate that all of the parcel must be farmed, which is why we provided the equity comparables. ... Q So take the west out; take the north out.

How does the remaining area fit into the definition of “farming operations”? A It would not.

Q And you are asking for an assessment based on farming operations? I do not understand. I am confused.

A Well, I think that’s why when we’re looking at those equity comparables, were saying the definition is a little bit open in that sense because if we’re looking at similar parcels that have farming operations taking place but not on the full parcel, then that shows that if the subject is under - - taking the kind of similar situation, then based on what my colleague has kind of presented with respect to what is happening on the west side and the north side, you would think it would be equitable to have that applied across the total parcel of land. [ 13 ] The evidence before the CARB was that the West 11 Acres Farmed was used as a farming operating.

La Caille conceded that the remainder of the Parcel was not used for farming operations. In its written submissions, and at the Hearing, La Caille submitted that the use of the West 11 Acres Farmed as a farming operation should allow the entire Parcel to be considered as part of a farming operation under the definition of “farming operations” in s. 2(1)(

f) of the MRAT 2018 . That definition refers to the “raising, production and sale of agricultural products” as being farming operations, then provides an elaboration and an exclusion. The elaboration in the definition does not apply and neither does the exclusion because there was no evidence before the CARB that, for the 2018 assessment year, any portion of the Parcel was stripped for the purposes of, or left the land more suitable for, development: (f) “farming operations” means the raising, production and sale of agricultural products and includes (

i) horticulture, aviculture, apiculture and aquaculture, (ii) the raising, production and sale of (

A) horses, cattle, bison, sheep, swine, goats or other livestock, (

B) fur-bearing animals raised in captivity, (

C) domestic cervids within the meaning of the Domestic Cervid Industry Regulation (AR 188/2014 ), or (

D) domestic camelids, (iii) the planting, growing and sale of sod, and (iv) an operation on a parcel of land for which a woodland management plan has been approved by the Woodlot Association of Alberta or a forester registered under the Regulated Forest Management Profession Act for the production of timber primarily marketed as whole logs, seed cones or Christmas trees, but does not include any operation or activity on land that has been stripped for the purposes of, or in a manner that leaves the land more suitable for, future development; [ 14 ] La Caille took the position that nothing in the definition of “farming operations” required farming to be undertaken over the entire Parcel.

La Caille submitted that, based on equitable comparisons, the farmland assessment ought to apply to the entire Parcel, even though farming operations were only taking place on the West 11 Acres Farmed. This was reiterated in La Caille’s representative’s summation at the Hearing: ... we’ve shown that the property has historically and continues to be a farming operation and that the definition of “farmland” doesn’t state that a minimum area has to be farmed to be considered a farm, nor does the nonconforming use stipulate that a certain amount of area must be continued.

It’s our belief that the western portion is continued farmland on the property and that the 11 acres, the loam pile, is the only part that couldn’t have been farmed. So we believe, then, that the equity comparables also show that, as they’re afforded a hundred percent farmland rate, and we don’t think that ... the loam pile indicates a commercial use on the property, ... therefore, based on that, the property should be assessed at the regulated farmland rate of $350. [ 15 ] On this application, La Caille submits that the CARB misconstrued the facts and that the entire Parcel was being used as a farming operation.

La Caille points to the evidence before the CARB, including the invoice, contract, email and photographs referred to above. I note, however, that this position conflicts with that of La Caille’s representatives at the Hearing where they acknowledged that only the West 11 Acres Farmed were being used as a farming operation.

La Caille now submits that the CARB should have put more weight on the documentary evidence than on the written submissions and concession of its representatives at the Hearing. [ 16 ] As indicated by the majority in Vavilov , at para 94 , the role of this Court on judicial review is to consider the Decision in the context of the proceedings as a whole: The reviewing court must also read the decision maker’s reasons in light of the history and context of the proceedings in which they were rendered.

For example, the reviewing court might consider the evidence before the decision maker, the submissions of the parties, publicly available policies or guidelines that informed the decision maker’s work, and past decisions of the relevant administrative body. ... Opposing parties may have made concessions that had obviated the need for the decision maker to adjudicate on a particular issue ... [ 17 ] In its written submissions to the CARB, a portion of which were read-in at the Hearing, La Caille confirmed that “farming operations continued on approximately 11 acres of the western portion” of the Parcel.

At the Hearing, La Caille’s representative conceded that the West 11 Acres Farmed was a farming operation, the Loam Pile at the north end of the Parcel could not be farmed and the remaining area did not meet the definition of “farming operations”. [ 18 ] The CARB did not misconstrue the facts, rather it relied on what was presented to it by La Caille’s representatives. There was

no unreasonable chain of analysis or fundamental gap in the CARB’s finding that the 23.2 Acre Portion “has not been actively farmed”. La Caille must accept its concession made to the CARB: see Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd , 2016 SCC 47 , at para 40 . [ 19 ] La Caille also submits that the CARB failed to consider that a temporary interruption of farm use does not deprive land of farming operation status. This argument cannot succeed because there was no evidence of a temporary interruption of a farming operation.

Unlike Airdrie (City) v 803969 Alberta Ltd , 2020 ABQB 114 , at para 60 , there was no evidence that the 23.2 Acre Portion was lying fallow or was temporarily not used as part of “the cycles within a farming operation”. La Caille’s concession before the CARB is irreconcilable with this new position.

Issue 2: Did the CARB fail to apply the correct test to determine whether the 23.2 Acre Portion was a non-conforming use under s. 643(2) of the MGA ? [ 20 ] The City’s assessor position was that the 23.2 Acre Portion could be considered separately from the rest of the Parcel because s. 643(2) of the MGA refers to a non-conforming use of “land” or “a building”, neither of which, it submitted, applied to a whole parcel: 643(2) A non-conforming use of land or a building may be continued but if that use is discontinued for a period of 6 consecutive months or more, any future use of the land or building must conform with the land use bylaw then in effect. [ 21 ] The City assessor assessed the 23.2 Acre Portion differently from the remainder of the Parcel based on the following: (

a) the 23.2 Acre Portion was not used as farmland and therefore was not part of a farming operation; (

b) farming was not permitted on the 23.2 Acre Portion under the land use bylaw as a result of the C-COR 1 land use designation; (

c) the 23.2 Acre Portion had not been used as a farming operation for over 6 months, rendering the non-conforming use exception inapplicable; and (

d) based on (

b) and (c), a farming operation on the 23.2 Acre Portion would be illegal and therefore a commercial assessment was appropriate. [ 22 ] La Caille was aware of the City’s assessor’s position and addressed it in its written submissions to the CARB, though not at the Hearing. [ 23 ] La Caille submits that the CARB misinterpreted s. 643(2) of the MGA because discontinuance for the purpose of the non- conforming use exemption requires “an element of intention”: Stavely (Town) v Fern Brothers , 1987 ABCA 233 , at para 4 .

While the provision considered in Stavely was under the predecessor legislation, it had essentially the same wording as s.643(2) , which has been in force since the planning legislation was amalgamated into the MGA under the Municipal Government Amendment Act , 1995 , SA 1995, c 24 . [ 24 ] Relying on UAlberta Pro-Life v Governors of the University of Alberta , 2020 ABCA 1 , the City argues that an element of intention, which is not expressly set out in s. 642(2) of the MGA , was not raised before the CARB and should not be raised now on judicial review.

In UAlberta , the Court said, at para 73 The broad concern about taking on additional grounds in judicial review is that to do so is directly injurious to the very nature of judicial review and to the administrative law generally. Judicial review is not just an interim step of a rolling dialogue. ... [ 25 ] In Alberta (Information and Privacy Commissioner) v Alberta Teachers' Association , 2011 SCC 61 , an order was made by the Commissioner’s delegated adjudicator against the Alberta Teachers Association (ATA) 29 months after the initial complaint was made.

On judicial review, the ATA submitted that the adjudicator had lost jurisdiction of the matter because the statutory timelines had not been complied with. The issue of compliance with timelines was not raised before the adjudicator and the adjudicator’s reasons did not expressly address it.

Rothstein J, on behalf of the majority, ultimately found that it was appropriate not to disturb the reviewing judge’s discretion to consider the timeline issue, but canvassed the general rule and rationale for how that discretion should be exercised and said, at paras 22 to 24: The ATA sought judicial review of the adjudicator’s decision. Without raising the point before the Commissioner or the adjudicator or even in the originating notice for judicial review, the ATA raised the timelines issue for the first time in argument. The ATA was indeed entitled to seek judicial review.

However, it did not have a right to require the court to consider this issue. ... [the court] has a discretion not to consider an issue raised for the first time on judicial review where it would be inappropriate to do so ... Generally, this discretion will not be exercised in favour of an applicant on judicial review where the issue could have been but was not raised before the tribunal ... There are a number of rationales justifying the general rule. One fundamental concern is that the legislature has entrusted the determination of the issue to the administrative tribunal ...

As this Court explained in Dunsmuir , “[c]ourts . . . must be sensitive . . . to the necessity of avoiding undue interference with the discharge of administrative functions in respect of the matters delegated to administrative bodies by Parliament and legislatures” (para. 27). Accordingly, courts should respect the legislative choice of the tribunal as the first instance decision maker by giving the tribunal the opportunity to deal with the issue first and to make its views known.

[ 26 ] The issue of a required element of intention of discontinuance of use, in the context of a non-conforming use exemption under s. 643(2) of the MGA , was not submitted to, or argued before, the CARB. La Caille knew that the City was relying on that subsection as La Caille referred to it in its written submission.

La Caille now suggests that the matter be remanded to the CARB so that evidence of intention can be submitted and considered. [ 27 ] In Vavilov , at para 91 , the Supreme Court cautioned reviewing courts not to apply a standard of perfection to the reasons given by the administrative tribunal: A reviewing court must bear in mind that the written reasons given by an administrative body must not be assessed against a standard of perfection.

That the reasons given for a decision do “not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred” is not on its own a basis to set the decision aside: Newfoundland Nurses , at para. 16.

The review of an administrative decision can be divorced neither from the institutional context in which the decision was made nor from the history of the proceedings. [ 28 ] In my view, remanding the matter back to the CARB to consider intention as an element in s. 643(2) of the MGA would give La Caille a proverbial second kick at the can on an argument which now, in hindsight, appears to be strategic. To do so would ignore the CARB’s efforts to review the submissions, conduct the Hearing and to issue the Decision.

Permitting such a re-hearing in these circumstances would: send the wrong message that a CARB hearing is a preview and that the real show starts with the judicial review application; encourage parties to waste the resources of the CARB; and deviate from the fundamental principles of judicial review set out in Vavilov . [ 29 ] La Caille’s written submissions to the CARB, noted that, in 2008 / 2009, the owner of the Parcel applied for the land use designation of C-COR 1 for the entirety of the Parcel, but it was only granted for a portion, including the 23.2 Acre Portion.

The progress of the development appears to have slowed-down because of issues relating to a drainage masterplan, but the Parcel was the subject of another land use re-designation application in 2014, which La Caille said was still “under review”. La Caille also said that “any intent of development is not within the foreseeable future”. However, the requests for land use re-designation show that there was an intention to develop the 23.2 Acre Portion at some point. [ 30 ] The requests for a land use re-designation also relate to the submission by La Caille that the CARB set an impossible test to meet.

La Caille argues that once the C-COR 1 land use designation was in place, it could never go back to farming, unless there was a non-conforming use under the MGA s. 643(2) . If the non-conforming use under the MGA is not available, then La Caille can never meet the definition of “farming operations”. La Caille relies Delta Air Lines Inc. v Lukács , 2018 SCC 2 , at para 17 , where McLaughlin CJ, for the majority, said: ... the Agency applied a test for public interest standing that could arguably never be satisfied. ...

In sum, the Agency suggests the availability of public interest standing to bring a complaint of this type and then, in the same breath, precludes any possibility of granting it. The imposition of a test that can never be met could not be what Parliament intended when it conferred a broad discretion on this administrative body to decide whether to hear complaints. [ 31 ] Delta Air Lines dealt with an administrative body, the Canadian Transportation Agency, acting as a gatekeeper to the right to make a complaint.

In this case, any prohibition on the use of the 23.2 Acre Portion for a farming operation is not an impossible test imposed by the CARB, but rather the outcome of actions taken by the Parcel owner(

s) to re-designate and use the Parcel. Issue 3: Does the Decision reveal a rational chain of analysis? [ 32 ] La Caille further argues that there is no analysis to support the conclusions in the Decision. In Vavliov , at para 98, the Supreme Court of Canada referred to Alberta Teachers to illustrate the point that administrative decision makers must provide understandable reasons: ...

In Alberta Teachers , this Court also reaffirmed the importance of giving proper reasons and reiterated that “deference under the reasonableness standard is best given effect when administrative decision makers provide intelligible and transparent justification for their decisions, and when courts ground their review of the decision in the reasons provided”: para. 54.

Where a decision maker’s rationale for an essential element of the decision is not addressed in the reasons and cannot be inferred from the record, the decision will generally fail to meet the requisite standard of justification, transparency and intelligibility. [ 33 ] The CARB’s reasoning for upholding the City’s assessment of the 23.2 Acre Portion is concise, but clear. It shows that the CARB considered two elements in making its decision: that the 23.2 Acre Portion was not used for farming operations and that farming operations was not a permitted use on the 23.2 Acre Portion.

The CARB did not mention the six-month period underpinning the non- conforming use exception in s. 643(2) of the MGA . However, there was evidence before the CARB that the 23.2 Acre Portion had not been farmed for six months or more: (

a) the previous year’s CARB decision relating to the Parcel, where farming operations were found to be on the West 11Acres Farmed; and (

b) the assessor’s pictures showing that there were no farming operations on the 23.2 Acre Portion in the 2017 and 2018 assessment years. [ 34 ] The majority in Vavilov , at para 91 , held that not all statutory provisions must be mentioned in an administrative tribunal’s decision. At para 120, the majority also noted that where the meaning of a statutory provision is disputed in administrative proceedings, the decision-maker must demonstrate in its reasons that it was alive to these essential elements.

The CARB found that farming was not permitted on the 23.2 Acre Portion, and La Caille does not challenge that farming is not permitted under the C-COR 1 land use. Before the CARB, La Caille did not argue that it was entitled to an exemption for a non-conforming use under s. 643(2) of the MGA . As a result, it is not surprising that the subsection was not mentioned by the CARB in the Decision.

On the contrary, La Caille conceded that there were no farming operations on the 23.2 Acre Portion and argued before the CARB that the farming operations on the West 11 Acres Farmed should suffice for a farming assessment for the entire Parcel.

Conclusion [ 35 ] I find that the Decision was reasonable and based on an internally coherent and rational chain of analysis. It was justified in relation to the facts, including La Caille’s concession regarding the different uses of the Parcel, and the law that constrained the CARB. It is not the role of this Court on judicial review to interfere with the factual findings, absent exceptional circumstances. Here, there are none.

Further, this is not a case that warrants the matter to be remanded to the CARB for new evidence and argument because such evidence and argument could have been submitted and made in the first instance. Accordingly, La Caille’s application for judicial review is denied. [ 36 ] I thank all counsel for their well-written submissions and effective oral argument. If counsel are unable to agree to costs, they may contact me within 30 days of the date of these Reasons. Heard on the 25 th day of November, 2020. Dated at the City of Calgary, Alberta this 22 nd day of December, 2020. E.J. Sidnell J.C.Q.B.A.

Appearances: Brian K. Dell for the Applicant Henry Chan for the Respondent, The City of Calgary Michael Janke for the Respondent, the Calgary Assessment Review Board