Dimaapi v. City of Surrey et al. Date:, 2010 BCPC 471

Citation: Dimaapi v. City of Surrey et al. Date: 20101207 2010 BCPC 0471 File No: S65196 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: CELESTINO AND BERNARDITA DIMAAPI CLAIMANT AND: CITY OF SURREY BC ASSESSMENT AUTHORITY DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE P.D. GULBRANSEN Appearing on their own behalf: C. Dimaapi and B. Dimaapi Counsel for City of Surrey : B. Lee Counsel for BC Assessment Authority : G. Holeksa Place of Hearing: Surrey , B.C.

Dates of Hearing: September 20 and October 6, 2010 Date of Judgment: December 7, 2010 INTRODUCTION [ 1 ] Mr. and Mrs. Dimaapi sue the City of Surrey and the BC Assessment Authority claiming that the defendants are responsible for the claimants paying more in property taxes than they really owed. They seek damages for the excess amount that they paid. They also seek repayment of the money that they paid to the City in 1997 for an application for a permit to rezone and develop the property. [ 2 ] The claimants say that the City of Surrey failed to notify them that their permit had been cancelled in 2003.

They continued to pay tax on the property at the rate payable for a business classification until 2008. They submit that after their application had been cancelled, the property should have been classified as residential, which carries a lower tax rate. The claimants say that the Assessment Authority was negligent because it did not reclassify the property after the cancellation. [ 3 ] The defendants agree that the claimants’ land could have been assessed as residential in 2003 and afterwards.

They both rely, however, on the effect of s. 11 of the BC Assessment Act , which states that unless a property owner successfully challenges an assessment by appealing it, the assessment is binding on all parties. No one can change it. [ 4 ] The City denies any negligence. It submits that the claimants were responsible for their own loss because they knew that the permit required them to begin the development process within two years. They did nothing for 6 years. Cancellation was inevitable.

APPLICABLE LEGAL PRINCIPLES [ 5 ] Under the BC Assessment Act the Assessment Authority must supply each municipality in British Columbia with a new assessment roll by December 30 every year. The authority must also send a notice of assessment to each person named in the assessment roll. An owner may dispute the assessment of a property by appealing the matter to a Property Assessment Review Panel. A further appeal may be made to the Property Assessment Review Board. In certain circumstances a further appeal may to taken to the B.C. Supreme Court.

All appeals must be done within strict time periods. [ 6 ] There are 14 classes of property named in the Prescribed Classes of Property Regulations made under the Assessment Act . Class 1 is residential.

Class 6 is “business and other.” A property will be classed as residential if it is land “having no present use and which is neither specifically zoned nor held for business, commercial or industrial purpose.” Class 6 includes land and improvements not included in the other property classes. [ 7 ] (The claimant’s property was classified under Class 6 after they had obtained the rezoning and development permit because they then held it for business or commercial purpose.

Once their permit had been cancelled the property once again fell under the definition of residential property because it was no longer held for those uses.) [ 8 ] The relevant part of s. 11 of the Assessment Act states: 11. The revised assessment roll is, unless changed or amended under

section 12, 53 or 65 (10) (

a) valid and binding on all parties concerned, despite (

i) any omission, defect or error committed in, or with respect to that assessment roll. [ 9 ]

Section 11 has been strictly interpreted by the courts. A property owner who disagrees with an assessment must seek to challenge it through the appeal procedures set out in the Assessment Act . An owner who does not follow this route and instead sues either the authority or a municipality because their negligence resulted in an incorrect assessment, cannot succeed. Two cases from the B.C. Supreme Court and the B.C. Court of Appeal illustrate this strict

interpretation. [ 10 ] In Herbert Romm v. The British Columbia Assessment Authority and the Corporation of the Township of Esquimalt (B.C. Supreme Court) Victoria No. 98-3377 May 4 2001, the plaintiff alleged that the assessment authority used incorrect procedures and erroneous information in assessing his property. He asked the court to declare that assessments between 1992 and 1998 were erroneous. [ 11 ] Melvin J. dismissed the action before trial on the basis that the only way for the plaintiff to challenge the assessments of his property was through the procedures set out in the Assessment Act .

In coming to this decision, the learned trial judge followed the decision of the Court of Appeal in Noel Developments Ltd . v. Vancouver (City) , [1994] B.C.J. No.2866 . [ 12 ] In Noel , the plaintiff had claimed that his property had been improperly assessed for property taxes in 1991 and 1992. The Court of Appeal upheld the trial judge’s decision to dismiss the action. The Court held that s. 10 (now s. 11) of the Assessment Act provides that an assessment which has not been successfully appealed is final.

It is binding on the taxpayer, the assessment authority and the municipality. [ 13 ] The Court pointed out that it was up to the property owner to look after his own interests. Gibbs J.A. speaking for the court stated (at paragraph 14):

...The Act, as does many others, casts upon the taxpayer the onus of taking care of his own interests. If he does not do so by the means and within the time set, when s. 10 clicks in he will have forfeited his remedy through his own negligence or oversight. CIRCUMSTANCES [ 14 ] In 1996 the claimants applied for rezoning, development permit and development variation permit for property they own on 105A Avenue.

They planned to build a two-storey commercial structure on the site. (There was a house on the land at the time, but it burned down in 2000.) [ 15 ] The City of Surrey gave preliminary approval to the application and granted the requested permits.

For the approval to become final or to get “fourth reading” the claimants were required to complete a servicing agreement, provide a letter of credit and pay certain fees (these were in addition to the fees they had to pay to make the application in the first place.) As well paragraph 6 of the Development Variance Permits states: This permit shall lapse if the Permittee does not substantially commence the construction of the development permitted by this permit within 2 years of the date of this permit. [ 16 ] The claimants could not afford to go ahead with the project on their own but hoped to find an investor who would finance it.

Thus, they did not take any of the steps required by the permits to commence preparation for and construction of the project. [ 17 ] On August 16, 2000, the City sent a letter to the claimants’ former agent, stating that the claimants had done nothing to start the development process. The letter indicated that if the claimants did not comply with the requirements of the Development Permit within 30 days, their application would be cancelled. Mrs. Dimaapi telephoned City Hall soon afterwards, asking that the application be kept open.

The City complied with this request and did not cancel the application. [ 18 ] Two and one half years later, the claimants had still done nothing to comply with the terms of the Development Permit. The City therefore sent another letter to their former agent stating that if they did not comply with the Development Permit within 30 days, their application would be cancelled. The letter was returned as being undeliverable.

The former agent said that he did not know where the claimants lived. [ 19 ] In fact the claimants’ correct address was recorded on the tax notice that the City sent to them every year and which the Dimaapis paid every year. [ 20 ] City staff brought the issue of the claimants’ non-compliance with the terms of the permits to City Council. The City cancelled the application on February 4, 2003. There had been no further effort made to notify the claimants about this action.

However, on February 6, 2003, the City sent a letter to the Dimaapis, addressed to the correct address in Surrey, advising that their application had been cancelled. The claimants say that they never got the letter. [ 21 ] There was no further communication between the claimants and the City until July 31, 2008. The claimants had decided to sell their property.

They believed that the rezoning and development applications were still open because they had not heard otherwise from the City and had continued to pay taxes on an assessment that the property was classified as being in the business category. [ 22 ] On that date, Mrs. Dimaapi sent an email to the City expressing her shock at finding out that the application to rezone and develop the property had been cancelled. Subsequently the claimants commenced this action against the defendants.

ANALYSIS [ 23 ] The claimants submit that the Assessment Authority was negligent because it failed to notice that their application to rezone and develop the property had been cancelled. The Assessment Authority would have had access to the City Counsel decisions and would also have found that the City had removed notice of the development application from the land title office records. [ 24 ] Even if those allegations are true, the claimants cannot succeed against the Assessment Authority.

The claim is that the Assessment Authority committed an error or omitted to do something with respect to the assessment roll. That is exactly what is covered by s. 11 of the Assessment Act . The claimants are in the same circumstances as the plaintiffs in the cases of Romm and Noel Developments ( supra ). As in those cases, the assessments that the claimants now complain about are final and binding on the Assessment Authority, the City of Surrey and the claimants. The action against the City of Surrey also cannot succeed, on the same basis.

NEGLIGENCE BY THE CITY OF SURREY [ 25 ] Counsel for the defendants very fairly pointed out that the claimants’ argument concerning the City might be put differently. It may be argued that in failing to send the letter giving notice of the pending cancellation to the proper address, the City caused the loss to the claimants. They did not learn about the cancellation and therefore were unaware that the property was now classified in the wrong tax category.

The argument is that the City’s mistake was not an error or omission made in respect of an assessment. [ 26 ] That argument fails because the City’s conduct did not cause the loss. The claimants are responsible for their own loss because they failed to comply with the terms of the development permit. They knew that they were required to substantially commence the

project within two years. They knew in 2000 that the City was going to cancel their application unless they complied with the terms of the permit. Despite the fact that the City agreed to keep their application open they still did nothing to even start the development process. [ 27 ] Thus, by the time that the application was cancelled, the claimants knew that the City expected them to comply with the terms of the permit and that if the claimants did not comply that the consequence would be cancellation. They also knew or should have known that the approval that they had received from the City was only temporary.

Until they complied with the conditions of the permit, the application would not get final approval or “fourth reading.” [ 28 ] In addition, the claimants made no inquiries of the City about the status of the application for 8 years. They addressed the problem by ignoring it, hoping that it would just go away. It was not reasonable for them to assume that they could get preliminary approval for their project, ignore their responsibilities for eleven years and still expect that any permit would still be valid. UNJUST ENRICHMENT [ 29 ] Finally, counsel referred me to the issue of unjust enrichment or restitution.

The City did receive more in taxes on the property than it was actually entitled to if the assessment had been correct. Can the court order return of the excess tax payments? It cannot. That very question was answered in the Noel case, supra , at paragraph 17. Gibbs J.A. stated : That brings me back to the appellant’s description of the cause of action as a “restitutionary claim” or in the modern legal terminology a claim for damages for unjust enrichment.

It is not necessary to decide whether the claim is properly so described because even if all of the elements of the doctrine of unjust enrichment were present, the appellant could not succeed. The words “valid and binding on all parties concerned” in s. 10 [now s. 11] of the Assessment Act constitute a statute bar to the action. FEES PAID TO THE CITY [ 30 ] The Claim for repayment of fees which the claimants paid to apply for the rezoning and development permits cannot succeed for two reasons. First, the fees were payable pursuant to a valid Surrey bylaw.

Second, the claim was filed in court more than 6 years after the fees were paid. Thus, the claim was made after any possible limitation date that could apply. CONCLUSION [ 31 ] For the reasons stated above the claim is dismissed against both defendants. [ 32 ] Usually the successful parties in a case will be awarded their costs - in this case filing and service fees. However, the claimants appear to be unsophisticated, honest persons. They seem to feel that they were unfairly denied the right to develop their property. This was a dream that was shattered by the application being cancelled.

This action was really an attempt to recover something out of that shattered dream. As well, they actually did pay more tax on the property than they had to. [ 33 ] In these circumstances, I order that the parties bear their own costs. __________________________________ The Honourable Judge P.D. Gulbransen Provincial Court of British Columbia