Canadian Property Holdings Inc. et al. v. Date:, 2012 MBCA 118

Citation: Canadian Property Holdings Inc. et al. v. Date: 20121221 The Assessor for the City of Winnipeg Docket: AI 07-30-06640 et al., 2012 MBCA 118 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Michel A. Monnin Mr. Justice Richard J. Chartier Madam Justice Diana M. Cameron BETWEEN : ) M. Newman ) for the Appellants ) ) T. W. Hewett CANADIAN PROPERTY HOLDINGS INC. ) for the Respondent The and 5055874 MANITOBA LIMITED ) Assessor for the City of ) Winnipeg (Appellants) Appellants ) ) T. D. Gisser and - and - ) T. B.

Dobson ) for the Respondent The THE ASSESSOR FOR THE CITY OF ) Municipal Board of WINNIPEG and THE MUNICIPAL ) Manitoba BOARD OF MANITOBA ) ) Appeal heard: (Respondents) Respondents ) December 5, 2012 ) ) Judgment delivered: ) December 21, 2012 MONNIN J.A. 1 The appellants were granted leave to appeal on the following question: whether or not The Municipal Board of Manitoba (the Board), in utilizing the per square foot notional value that it did, failed to properly interpret the definition of value. 2 The appellants and The Assessor for the City of Winnipeg (the Assessor) both appealed an order of the Board of Revision of the City of Winnipeg to the Board with respect to the 2006 assessed value of a parcel of land located at 220 Portage Avenue on which sits a building commonly referred to as The Royal Bank Building. 3 In its order, the Board set out that in determining the assessed value of the property, it must determine the amount for which the property might reasonably have been expected to sell, in the open market, as of the date of the legislated reference year, which was 2003. 4 The Board received evidence from the appellants of a lease for 62,000 square feet of the building (out of a total leasable floor space of 175,077 square feet), which lease provided for a rental payment which was significantly less per square foot than the rental rates on leases of other similar buildings that the Assessor had provided to the Board as comparables.

In coming to its assessment of value, the Board utilized a lease rate that was higher than the amount the appellants were receiving on the above referred to 62,000 square foot lease, and somewhat less than the amounts payable under the comparables relied on by the Assessor.

5 The appellants argue that in arriving at the assessed value of the property, the Board either ignored or failed toconsider properly the arm’s length 62,000 square foot lease, and thereby failed to fulfill its statutory duty to determine the market valueof the subject property.

Furthermore, the appellants argue that the Board failed to provide an explanation for ignoring or discounting theevidentiary value of that lease, thereby committing an error in law by failing to provide adequate reasons as to why it discounted thatevidence in arriving at its finding of the assessed value. 6 It became evident during the hearing of the appeal that the main issue to be decided by this court was in fact theadequacy of the reasons provided by the Board in arriving at its decision.

If those reasons are deemed to be adequate, the appellantswould be hard pressed to maintain the position that they are not attacking the Board’s methodology. This is because the issue they wishto raise is in fact one of mixed fact and law and not an error in law or jurisdiction. 7 It is clear from the reasons that the Board knew what test needed to be addressed in its decision and did so. It is alsoclear that the parties were in agreement that an income approach should be used to value the subject property and that was done.

Wherethe parties disagree is with respect to the evidence the Board relied on to reach its valuation. That is a matter of methodology and thiscourt has said on numerous occasions that neither the methodology used by the Board to determine assessed value nor its calculation ofvalue is a question of law. See The Assessor for the City of Winnipeg v. 346 Portage Avenue Inc., 2011 MBCA 110, and the othernumerous cases cited in that decision. 8 Thus, as stated earlier, the issue becomes one of adequacy of reasons. 9 This court dealt with that issue in Briarwood Investment Corp. v.

Winnipeg City Assessor, 2004 MBCA 103, 187Man.R. (2d) 316. Scott C.J.M., while also considering reasons written by the Board and where the applicant in that case raisedarguments similar to those now being raised by the appellants, stated (at para. 6): But during the course of oral argument, it became clear that the real issue, on which I permitted counsel to file supplementary argument,dealt with the adequacy, in law, of the reasons for decision of the Board.

The applicant says that the Board did not properly explain whyit came to the decisions that it did with respect to the two issues before it because it failed to explain how, if at all, it analyzed theinformation and facts before it.

This is especially evident, counsel argue, with respect to the establishment of the market rents where theBoard, after virtually no discussion of the issue, concluded (at para. 24): With respect to the matter of market rents versus contract rents, the Board finds that the Assessor’s Market Rent analysis did not stand upto cross-examination, but overall, the Board is satisfied that the subject’s rents are within an acceptable range, albeit at the higher end ofa possible market rent range. 10 He then continued as follows (at paras. 12, 14-15): Firstly, I note that there is a statutory requirement that the Board give reasons.

Section 61(1) of the Municipal Assessment Act,C.C.S.M., c. M-226, requires the Board to provide to the parties a copy of its order “together with the reasons for the making of theorder.” In my opinion, however, this provision is of little significance to the issue before me, which is not whether reasons need to begiven, but in what detail they need to be. Administrative tribunals operate in a bewildering variety of circumstances and affect individual rights to varying degrees. There is,therefore, no “one size fits all” standard for every agency, or for every circumstance that an individual agency might encounter.

AsDickson, J., as he then was, noted almost 30 years ago in Service Employees’ International Union, Local 333 v. Nipawin DistrictStaff Nurses’ Association et al., (SCC), [1975] 1 S.C.R. 382, it is not the job of the courts to meticulously search forerror and latitude must be given (considerable in some cases) with respect to reasons for decision. But there is clearly a minimumrequirement.

While a tribunal is not required to make explicit findings on every issue, or provide elaborate reasons, in the end the partiesmust be able to say that they know what the result is and the rationale or basis on which the decision was reached. In my opinion, the reasons here under review do pass - barely - the minimal standard applicable in the circumstances of this case.

Therecan be little doubt that the applicant was fully aware that the Board, while less than accepting of all of the testimony of the assessor’sexpert, nonetheless was satisfied, based on the totality of evidence, with the essence of the assessor’s market rent analysis, which theBoard was prepared to rely on because it considered the analysis to be reasonable.

Similarly, there can equally be little doubt that theBoard concluded that the disputed items of repair and maintenance were capital in nature because in the members’ opinion, theyextended the economic life of the building. 11 In addition, the matter of the adequacy of reasons was recently dealt with by the Supreme Court of Canada inNewfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708. Inwriting for the court, Abella J. said (at paras. 13-18):

This, I think, is the context for understanding what the Court meant in Dunsmuir [Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1S.C.R. 190] when it called for “justification, transparency and intelligibility”. To me, it represents a respectful appreciation that a widerange of specialized decision-makers routinely render decisions in their respective spheres of expertise, using concepts and languageoften unique to their areas and rendering decisions that are often counter-intuitive to a generalist. That was the basis for this Court’s newdirection in Canadian Union of Public Employees, Local 963 v.

New Brunswick Liquor Corp., (SCC), [1979] 2 S.C.R.227, where Dickson J. urged restraint in assessing the decisions of specialized administrative tribunals. This decision oriented the Courttowards granting greater deference to tribunals, shown in Dunsmuir’s conclusion that tribunals should “have a margin of appreciationwithin the range of acceptable and rational solutions” (para. 47).

Read as a whole, I do not see Dunsmuir as standing for the proposition that the “adequacy” of reasons is a stand-alone basis for quashinga decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one for theresult (Donald J. M. Brown and John M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf), at §§ 12:5330 and12:5510). It is a more organic exercise — the reasons must be read together with the outcome and serve the purpose of showing whetherthe result falls within a range of possible outcomes.

This, it seems to me, is what the Court was saying in Dunsmuir when it toldreviewing courts to look at “the qualities that make a decision reasonable, referring both to the process of articulating the reasons and tooutcomes” (para. 47). In assessing whether the decision is reasonable in light of the outcome and the reasons, courts must show “respect for the decision-making process of adjudicative bodies with regard to both the facts and the law” (Dunsmuir, at para. 48).

This means that courts shouldnot substitute their own reasons, but they may, if they find it necessary, look to the record for the purpose of assessing thereasonableness of the outcome. Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would havepreferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis.

A decision-maker isnot required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion (ServiceEmployees’ International Union, Local 333 v. Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382, at p.391). In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it todetermine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met. The fact that there may be an alternative

interpretation of the agreement to that provided by the arbitrator does not inevitably lead to theconclusion that the arbitrator’s decision should be set aside if the decision itself is in the realm of reasonable outcomes. Reviewingjudges should pay “respectful attention” to the decision-maker’s reasons, and be cautious about substituting their own view of the properoutcome by designating certain omissions in the reasons to be fateful. Evans J.A. in Canada Post Corp. v.

Public Service Alliance of Canada, 2010 FCA 56, [2011] 2 F.C.R. 221, explained in reasons upheldby this Court (2011 SCC 57, [2011] 3 S.C.R. 572) that Dunsmuir seeks to “avoid an unduly formalistic approach to judicial review”(para. 164). He notes that “perfection is not the standard” and suggests that reviewing courts should ask whether “when read in light ofthe evidence before it and the nature of its statutory task, the Tribunal’s reasons adequately explain the bases of its decision” (para. 163).

I found the description by the Respondents in their Factum particularly helpful in explaining the nature of the exercise: When reviewing a decision of an administrative body on the reasonableness standard, the guiding principle is deference. Reasons are notto be reviewed in a vacuum - the result is to be looked at in the context of the evidence, the parties’ submissions and the process. Reasons do not have to be perfect.

They do not have to be comprehensive. [para. 44] 12 When considering the reasons of the Board, in light of what is stated in both Briarwood and Newfoundland, I can onlycome to one conclusion and that is that although the Board’s reasons might not be as complete as I might wish them to be, they areadequate.

They gave a reader the essence of the issues that were to be addressed, they set out the positions of the parties and theevidence each party relied upon, and they set out the Board’s findings and clearly set out the decision arrived at. 13 The result arrived at by the Board clearly means that it did not accept the lease evidence on market rent that theappellants put forward and instead relied more, but not slavishly, on the comparables advanced by the Assessor. 14 Read as a whole, the reasons of the Board are reasonable and especially so when considered in the context of thecomplete record and submissions made to it by the parties.

A reader of those reasons can easily ascertain that the Board preferred theevidence advanced by the Assessor, even in the face of the rental evidence the appellants were relying upon. The decision arrived at wasone that was within the range of acceptable outcomes, to use the language of Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R.190.

15 There is no basis for appellate intervention with respect to the Board’s reasons and, therefore, for the reasons set out earlier, the question put to this court is answered in the negative. 16 The Assessor and the Board will have their costs. J.A. I agree: J.A. I agree: J.A.