Winnipeg City Assessor v. Date:, 2011 MBCA 35

Citation: Winnipeg City Assessor v. Date: 20110415 Law Society of Manitoba, 2011 MBCA 35 Docket: AI 10-30-07455 IN THE COURT OF APPEAL OF MANITOBA Coram: Chief Justice Richard J. Scott Mr. Justice Michel A. Monnin Madam Justice Holly C. Beard BETWEEN : THE ASSESSOR FOR THE CITY OF ) M. A. Jack WINNIPEG ) for the Appellant ) (Applicant) Appellant ) J. A. Mercury and ) J. B.

Gisser - and - ) for the Respondent ) THE LAW SOCIETY OF MANITOBA ) Appeal heard: ) March 24, 2011 (Respondent) Respondent ) ) Judgment delivered: ) April 15, 2011 MONNIN J.A. 1 This is an appeal by the Assessor for the City of Winnipeg (the Assessor) from a finding by a judge that a building owned by the respondent, the Law Society of Manitoba (the LSM), is exempt from taxation for school purposes pursuant to s. 23(1) (

d) of The Municipal Assessment Act , C.C.S.M., c. M226 (the Act ). 2 Section 23(1) (

d) of the Act provides: Exemption from school taxes 23(1) Subject to sections 25 and 26, real property is exempt from taxation for school purposes where the real property . . . . . (

d) is owned by or is held in trust for and is used by a college or seminary of learning, to a maximum exemption of 1.62 hectares; . . . . . 3 Section 63(1) (

b) of the Act provides that an appeal from a decision of a Queen’s Bench judge can be made to this court on a point of law. The Act reads: Appeal to Court of Appeal

63(1) Subject to this section, a party to an appeal to the Municipal Board or to the Court of Queen’s Bench may appeal the order of the Municipal Board or the Court of Queen’s Bench to the Court of Appeal upon (

a) a question involving the jurisdiction of The Municipal Board or The Court of Queen’s Bench; or (

b) a point of law; in accordance with the rules of the Court of Appeal. 4 The LSM owns and occupies the property consisting of land and a building at 219 Kennedy Street in the City of Winnipeg. Upon receiving its 2010 property assessment notice, the LSM appealed to the Board of Revision, challenging both the quantum of the assessment and liability to taxation. By the time the matter was heard by the Board of Revision, the LSM and the Assessor had agreed on the assessed value. The only issue before the Board of Revision was whether the LSM was entitled to exemption from taxation for school purposes by virtue of s. 23(1) (

d) of the Act . 5 The Board of Revision issued an order declaring that one-third of the property was to be exempt. The Assessor filed an appeal from that decision and the matter was heard by a judge of the Court of Queen’s Bench. 6 The judge found that the LSM was a seminary of learning pursuant to s. 23(1) (d), and declared all of the property to be exempt from taxation for school purposes.

In coming to the conclusion that the LSM was a seminary of learning, the judge stated (at para. 26): Having concluded that the Law Society’s primary purpose can be broadly defined as educational, I must now examine the use of the Law Society’s property located at 219 Kennedy to ensure that there is nothing that would compromise, dilute or meaningfully contradict that conclusion.

In other words, despite the presence of what has been acknowledged as the other activities taking place at 219 Kennedy, is education “the dominant activity” at that location and if not, how does that affect the Law Society’s decided status as a “seminary of learning”? The latter question becomes moot as I have answered the former question by concluding that the dominant activity at and the primary use of 219 Kennedy is indeed educational.

And further (at para. 33): In short, given what I have determined is “the dominant activity” at 219 Kennedy (education), there is nothing in the use of that property that would modify my earlier conclusion that the Law Society’s primary purpose is educative. Following from that conclusion, on a consideration of the totality of the relevant factors discussed in the jurisprudence, the Law Society can in my view properly be characterized as a “seminary of learning”. 7 Having made this finding, the judge went on to consider what portion of the building should be exempt from school taxes.

He wrote (at paras. 37, 39): I have already examined the property at 219 Kennedy as part of my earlier analysis respecting the Law Society’s primary purpose. I had determined that the “dominant activity” at that location was educational. Even if ss. 22 and 23 are “subject to” s. 26, given my specific finding (and the Board’s implicit finding with which I concur - that the Law Society is a “seminary of learning”), the Board’s decision to limit the proportion of the exemption to one-third - absent clarifying reasons - seems inconsistent and arbitrary.

In a case such as the present, the preliminary and fundamental task is to determine whether an institution’s primary purpose is educational and by extension, to determine if the characterization “seminary of learning” is appropriate. Part of that determination includes identifying the dominant activity at the property in question. In my view, the purpose of s. 23(1) (

d) of the Act is to exempt, once so designated, all “seminaries of learning” from school tax, regardless of whether a portion of the real estate is used for other purposes. Accordingly, the corollary of the determination I have made in the present case, is that the school tax exemption previously applied to only one-third of the property, should be applied to the property as a whole. 8 It is to be noted that the Assessor’s appeal deals only with the tax liability under s. 23(1) (d). Whether the judge might have erred in simply granting a partial exemption as opposed to a full one, as provided for under s. 26 of the Act , was not a matter under

appeal. 9 The Assessor, in its factum, stated that the point of law in issue was “the appropriate meaning to be placed upon the term‘seminary of learning’ as that term is employed in s. 23(1)(

d) of the [Act].” In argument before us, no doubt realizing that the issue asdefined in the factum would bring about a consideration of mixed fact and law, the Assessor narrowed its alleged point of law to being anerror by the judge in interpreting s. 3(1) of The Legal Profession Act, C.C.S.M., c. L107.

Section 3, in its entirety, reads as follows: Purpose 3(1) The purpose of the society is to uphold and protect the public interest in the delivery of legal services with competence, integrityand independence. Duties 3(2) In pursuing its purpose, the society must (

a) establish standards for the education, professional responsibility and competence of persons practising or seeking the right to practiselaw in Manitoba; and (

b) regulate the practice of law in Manitoba. 10 The Assessor argues that the judge placed too much emphasis on the duties of the LSM as opposed to the purpose itself andthat, in so doing, he incorrectly came to the conclusion that the LSM was a seminary of learning. The Assessor also argues that theeducational component of the LSM, which it does not contest exists, is simply in aid of the dominant purpose, which is the protection ofthe public.

Based on this argument, the Assessor alleges that, in considering whether or not the LSM was a seminary of learning, thejudge could have solely looked to the provisions of The Legal Profession Act in isolation, without considering any other evidence. TheAssessor relies on the Ontario Superior Court of Justice decision in Keewaydin Camps Corp. Canada v.

Temagami (Municipality)(2007), 56 R.P.R. (4th) 65, to support its position that the LSM is not a seminary of learning. 11 In reply, the LSM takes the position that the issue of its dominant purpose must not be looked at only in the context of s. 3 ofThe Legal Profession Act, but also in the context of what is the dominant use by the LSM of the property situate at 219 Kennedy. Further, this must be done in light of s. 23(1)(

d) of the Act and how the test to consider whether an establishment is a seminary oflearning has been applied. In other words, the LSM argues that the issue is to be considered not solely in light of the provisions of TheLegal Profession Act, but, as the test directs, in a wider context.

The extension to that argument is that the established test requires afactual matrix, which, the LSM argues, was provided to the judge and, unless he makes a clear error in law in applying those facts to thetest, the matter before this court becomes one of mixed fact and law and is therefore beyond the jurisdiction of this court pursuant to s. 63of the Act. 12 Relying on Worldwide Evangelization Crusade (Canada) v. Village of Beamsville, (SCC), [1960] S.C.R. 49,Institut de Notre Dame des Missions v.

Brandon (City) (1987), (MB KB), 49 Man.R. (2d) 117 (Q.B.), and alsoKeewaydin, the LSM argues that the following factors are to be considered in determining whether a property is being utilized as aseminary of learning: 1) It simply means a place of education. 2) The stated objectives of the institution, the objectives of the students and the centrality of the educational aspects of the institutionmust all be considered. 3) The word “education” is not to be construed narrowly.

If the dominant or primary purpose of the institution is educative, the fact thatnon-ancillary activities are conducted at the subject property does not detract from the purpose. The subject property does not have to beused exclusively for educational purposes to maintain its tax-exempt status. 4) In determining whether the institution is educative, the proper inquiry is whether or not those in attendance fulfill better and moreeffectively the purpose to which they have dedicated themselves. 5) The institution must be a school in the broad sense of the word.

6) To determine whether the institution is a bona fide school, the presence of students, physical facilities, teachers or instructors and acurriculum designed to further the advancement in life of those in attendance are relevant. 13 This appeal raises two issues, (

i) how the phrase “seminary of learning,” as it is used in s. 23(1)(d), has been interpreted; and(ii) whether the LSM is a seminary of learning within that section. The first question is a question of law; the second is a question ofmixed fact and law. 14 The LSM addressed the

interpretation of the phrase “seminary of learning,” as set out at para. 12 of these reasons, and theAssessor agreed with that

interpretation. That is the question of law which was not at issue before us. The remaining question iswhether the LSM is a seminary of learning, and that is a question of fact or mixed fact and law. See Thunder Bay Seaway Non-ProfitApartments v. Municipal Property Assessment Corp. (2007), (ON SCDC), 279 D.L.R. (4th) 504 at paras. 23-24, 29(Ont. S.C.J. (Div. Ct.)). In Kiddie Kampus Inc. v. Winnipeg City Assessor, 2005 MBCA 86, 195 Man.R. (2d) 100, this court found thatthe

interpretation of the phrase “private school” within the meaning of The Education Administration Act, C.C.S.M., c. E10, was an issueof statutory

interpretation and, as such, was a question of law, which the court then proceeded to determine. The difference is that inKiddie Kampus, this court was required to interpret the phrase “private school” as it is used in the legislation, while in Thunder BaySeaway and in the present case, the issue is not the

interpretation of the legislation, but whether a particular property fits within theexemption. This is a question of fact or of mixed fact and law. 15 The Assessor attempted to categorize this as a question of law by arguing that the court need only look at s. 3(1) of The LegalProfession Act, without considering any further facts, to determine that the LSM is not a seminary of learning, thus rendering the issueone of law rather than fact. I agree with the position advanced by the LSM that the matter cannot be considered in a vacuum.

Contraryto what the Assessor argued, consideration of s. 3(1) of The Legal Profession Act is but one element of the test to establish whether aproperty is being utilized as a seminary of learning or not. 16 I have been persuaded by the LSM that the Assessor is attempting to appeal the judge’s decision not on a point of law alone,but on one of mixed fact and law. This court has no jurisdiction under s. 63 of the Act to hear an appeal of mixed fact and law and,therefore, on that basis, this appeal must fail and it is accordingly dismissed. 17 I, however, find myself bound to add a further comment.

The finding of the judge is, in my view, a narrow and fact-basedconclusion about the dominant purpose of the LSM, but one that he was reasonably entitled to arrive at, on the basis of the evidence thatwas before him and the way the case was presented. The only evidence was an affidavit from the LSM’s Director of ProfessionalEducation and Competence, coupled with what I consider to be a perfunctory cross-examination. The Assessor did not introduce anyevidence to refute this evidence or provide a different perspective concerning the LSM’s dominant purpose.

This decision, therefore,must be understood in the context of its own unique circumstances. J.A. I agree: C.J.M. I agree: J.A.