2017 NLCA 14, 2017 NLCA 14

City of St. John’s (appellant) v. St. John’s Dockyard Limited (respondent) (16/79) Indexed As: St. John’s (City) v. St. John’s Dockyard Limited 2017 NLCA 14 1 C.A.N.L.R. 520 Court of Appeal of Newfoundland and Labrador Welsh, White and Harrington JJ.A. February 21, 2017

Summary: The City of St. John’s appealed a ruling of the Supreme Court Trial Division finding that certain property of the respondent, St. John’s Dockyard was not subject to a tax assessment under the Assessment Act, 2006 , SNL 2006, c. A-18.1 . St. John’s Dockyard attempted to appeal the initial assessment to the Commissioner, but the Commissioner would not accept a notice of appeal since the Dockyard had not provided information requested by the City’s assessor. The Dockyard then sought a declaration from the Supreme Court Trial Division, which granted the application.

The City appealed arguing the Trial Division had no jurisdiction over the matter. Held: Appeal allowed. Welsh J.A. (White and Harrington JJ.A. concurring): It is clear from a reading of the Act as a whole and

Part II in particular that the legislative intention is that an appeal as to whether property is assessable falls within the mandate of a commissioner. To authorize a judge of the Trial Division to make a declaration at first instance on the assessment issue would be inconsistent with the legislative scheme and intention. In this case, without the issue having been considered by a commissioner, the Trial Division judge proceeded to determine that the property in question was not real property assessable under the Act .

In so doing, the judge acted outside his authority by usurping the statutorily mandated power of a commissioner to determine at first instance whether property is assessable and whether the assessment should be confirmed or amended. In the result, the Trial Division judge’s analysis and conclusion as to the characterization of the property in question must be set aside with the matter remitted to a commissioner for determination. Under section 8(1) of the Act , a party is required to provide information to an assessor. Section 47(4) of the Act provides a penalty for refusing or failing to provide information.

The underlying rationale for these provisions is to streamline the process of assessing property for taxation purposes and to facilitate the City obtaining information relevant to completing assessments. ______________________________ Leave to appeal to SCC refused, 37539 (July 20, 2017).

Section 8 of the Act does not address the situation where an assessed party objects to providing information requested by an assessor. However, principles of fairness and equity require an avenue for an assessed party to challenge the validity of an assessor’s request. A commissioner has no jurisdiction to make any determinations in the absence of an appeal (sections 33 and 37(3) of the Act ). Section 47(4), precludes an appeal where the assessed party has failed to provide information requested by an assessor and in effect closes the door to the involvement of a commissioner.

The conclusion follows that a challenge to an assessor’s request for information must be determined by a court. The judge erred in failing to address the operation of section 47(4) of the Act . The question of whether the information requested by the

assessor must be provided must be determined by a Trial Division judge. The appeal was therefore allowed and the choice left the Dockyard to comply with the request for information and proceed with an appeal to the Commissioner, or whether to challenge the request for information in the Supreme Court. Cases cited: Loblaw Properties Limited v. City of Mount Pearl , 2017 NLCA 6 3163083 Canada Limited v. City of St. John’s , 2004 NLCA 42 Counsel: Irene S. Muzychka Q.C., for the appellant; Michael J. Crosbie Q.C., for the respondent. This appeal was heard on February 10, 2017 before Welsh, White and Harrington JJ.A.

The following judgment was delivered on February 21, 2017 by Welsh J.A. for the Court. ______________________________________________________________ Welsh J.A.: [ 1 ] St. John’s Dockyard Limited sought to appeal the assessment for taxation purposes that it received from the City of St. John’s. The City refused to accept the notice of appeal because the Dockyard had not provided information requested by the City’s assessor.

The Dockyard then applied to a judge of the Supreme Court, Trial Division for declarations that certain property that had been included in the City’s assessment was not assessable as real property, and that the assessment should be reduced by a specified amount. [ 2 ] Jurisdiction of the judge to hear the application and issue the requested declarations was not contested by the City. Without addressing the jurisdictional issues, the judge determined that the property in question was not real property and was, therefore, not assessable.

He issued a declaration to that effect. [ 3 ] As a preliminary matter, this appeal requires an analysis of the scope of jurisdiction of the courts and of an assessment review commissioner under the Assessment Act, 2006 , SNL 2006, c. A-18.1, including the effect of failure to provide information requested by an assessor. ANALYSIS Jurisdiction to Determine Whether Property is Real Property Under the Act [ 4 ] The Assessment Act, 2006 provides for a municipality, including the City of St. John’s, to assess real property for purposes of taxation.

The Act requires the City to appoint an assessment review commissioner (section 32).

Part II of the Act deals with “Assessment Appeals”. Section 30(1) provides for an assessed party to file a notice of appeal against an assessment: A party objecting to or complaining of an omission from or an error in a roll may personally or by agent, serve notice of appeal to the city clerk or the director within 30 days from the date of the notice of assessment. [ 5 ] An appeal begun by means of a notice of appeal is heard and determined by an assessment review commissioner.

Section 33 provides: At the time fixed for appeals the commissioner shall hear the appeals made in accordance with this Act . (Emphasis added.) [ 6 ] The powers of a commissioner are set out in

section 37:

(1) A commissioner, after hearing the evidence, shall confirm or amend the assessment appealed against by increasing or decreasing it but the commissioner shall not amend an assessment only on the ground that it is above or below the actual value if the assessment bears

a just and fair relation to the value at which other properties are assessed in the city or a municipality. …

(3) A commissioner shall not amend an assessment unless an appeal has been made in accordance with this Act …

(4) A commissioner, after hearing from the parties and any witnesses produced, shall decide the matter and shall provide reasons in writing to the parties to the appeal. (Emphasis added.) [ 7 ]

Section 39 provides for an appeal from a decision of a commissioner on a question of law or jurisdiction to the Trial Division:

(1) A party aggrieved by a decision of a commissioner may appeal from that decision to a judge of the Trial Division in the judicial centre in which the real property is located upon giving written notice to all parties and to the Trial Division within 30 days after the mailing of delivery to that person of the decision of the commissioner.

(2) The practice and procedure relating to appeals under the Judicature Act , and the Rules of the Supreme Court, 1986 apply to proceedings under this section.

(3) An appeal of a decision of a commissioner under subsection (1) may be made on a question of law or jurisdiction . …

(5) The court shall either confirm or vacate the decision of the commissioner and where vacated the court shall refer the matter back to the commissioner with the opinion of the court as to the error in law or jurisdiction and the commissioner shall deal with the matter in accordance with that opinion. (Emphasis added.) [ 8 ] The effect of

section 39 is summarized in Loblaw Properties Limited v. City of Mount Pearl , 2017 NLCA 6 : [12] It follows from the legislation read as a whole that the determination of issues of fact falls within the realm of a commissioner, with appeals restricted to questions of law or jurisdiction. [ 9 ] It is clear from a reading of the Act as a whole and

Part II in particular that the legislative intention is that an appeal as to whether property is assessable falls within the mandate of a commissioner. Limitation of an appeal to the Trial Division on a question of law or jurisdiction circumscribes the extent of the court’s jurisdiction. Even where there has been a successful appeal to the Trial Division, section 39(5) requires the judge to refer the matter back to the commissioner who must determine the assessment issue by applying the law as set out in the judge’s decision.

To authorize a judge of the Trial Division to make a declaration at first instance on the assessment issue would be inconsistent with the legislative scheme and intention. [ 10 ] In this case, without the issue having been considered by a commissioner, the Trial Division judge proceeded to determine that the property in question was not real property assessable under the Act . He then issued a declaration “that the assessment of the items in question for the taxation year 2016 is ultra vires the City of St. John’s” (2016 NLTD(G) 133, at paragraph 32).

In so doing, the judge acted outside his authority by usurping the statutorily mandated power of a commissioner to determine at first instance whether property is assessable and whether the assessment should be confirmed or amended. [ 11 ] In the result, the Trial Division judge’s analysis and conclusion as to the characterization of the property in question must be set aside with the matter remitted to a commissioner for determination, assuming the Act does not otherwise preclude an appeal to a commissioner. A discussion of that issue follows.

I would emphasize that the judge’s analysis and conclusion, having been set aside, may not be relied upon. Effect of the Assessed Party’s Failure to Provide Information [ 12 ] Under section 8(1) of the Act , a party is required to provide information to an assessor: A person shall give to the assessor all information requested by the assessor for the purpose of enabling the assessor to properly assess the real property of that person. [ 13 ] Section 47(4) of the Act provides a penalty for refusing or failing to provide information required by an assessor or a commissioner.

The assessed party may be charged with an offence and, in any event, is precluded from appealing the assessment: Notwithstanding that a person has not been charged with an offence [under subsection (2)], a person who refuses to permit an assessor or a commissioner to enter real property or to provide information under this Act shall not be entitled to appeal an assessment of real property under this Act … (Emphasis added.) [ 14 ] The underlying rationale for these provisions is to streamline the process of assessing property for taxation purposes and to facilitate the City obtaining information relevant to completing assessments. (See 3163083 Canada Limited v.

City of St. John’s , 2004 NLCA 42 , at paragraph 63 , addressing comparable provisions under the former St. John’s Assessment Act , RSNL 1990, c. S-1.) [ 15 ] However,

section 8 of the Act does not address the situation where an assessed party objects to providing information requested by an assessor. Under the legislation, the information must be submitted unless the party is “unable” to provide it. However, principles

of fairness and equity require an avenue for an assessed party to challenge the validity of an assessor’s request. For example, a party may wish to challenge the City’s right to specific information on the basis that it is not necessary for the purpose of completing the assessment because it is irrelevant. [ 16 ] Since there must be an avenue for challenging an assessor’s request for information, the next question is whether a commissioner has jurisdiction for that purpose. [ 17 ] As discussed above, the authority of a commissioner is limited to confirming or amending an assessment.

This, of course, will require the commissioner to conduct a hearing, consider evidence, and determine issues such as whether the assessed property is real property under the Act . However, a commissioner has no jurisdiction to make any determinations in the absence of an appeal (sections 33 and 37(3) of the Act ). Pursuant to section 47(4), an appeal is precluded where the assessed party has failed to provide information requested by an assessor. In effect, section 47(4) closes the door to the involvement of a commissioner.

The conclusion follows that a challenge to an assessor’s request for information must be determined by a court. [ 18 ] I note in passing that this result seems somewhat incongruous since, in exercising his or her authority under the Act , a commissioner is required to deal with evidence related to an assessment, including the extent to which the evidence is relevant to the assessment.

Absent the bar under section 47(4) which prevents a commissioner from considering a refusal or failure to provide information requested by an assessor, I would have concluded that the matter fell within the scope of authority of a commissioner. [ 19 ] In this case, despite having authority to determine whether the Dockyard had a valid reason for refusing or failing to provide the information requested by the assessor, the judge neither conducted an analysis nor made a determination.

This amounted to error. [ 20 ] If a court concludes that the requested information should be provided, the Dockyard would have the option of complying with the request, thereby avoiding the operation of section 47(4) of the Act . In that situation, upon receipt of the information, it would be necessary for the City to review the assessment, providing the Dockyard with the opportunity to accept the assessment or proceed with an appeal to a commissioner.

SUMMARY AND DISPOSITION [ 21 ] The Trial Division judge erred by issuing a declaration that certain property was not assessable as real property under the Act . The legislative scheme vests authority over that issue at first instance in a commissioner appointed under the Act . A commissioner’s decision may be appealed to the Trial Division only on a question of law or jurisdiction.

In the result, the judge’s analysis and conclusions regarding whether the property constituted real property for assessment purposes must be set aside and cannot be relied upon for purposes of precedent. [ 22 ] In addition, the judge erred in failing to address the operation of section 47(4) of the Act . On a proper analysis, the courts, not a commissioner, have jurisdiction over that issue. The question of whether the information requested by the assessor must be provided must be determined by a Trial Division judge. [ 23 ] In the result, I would allow the appeal.

If the Dockyard decides to provide the information without seeking a determination as to the application of

section 47, the appeal of the assessment to a commissioner may proceed and, I reiterate, no reliance may be placed on the judge’s analysis and decision regarding characterization of the property in issue for purposes of the assessment. In the circumstances, the parties shall bear their own costs in this Court and in the Court appealed from. Appeal allowed .