2015 MBCA 48, 2015 MBCA 48

Citation: 67590 Manitoba Ltd. v. Winnipeg Date: 20150506 (City) Assessor, 2015 MBCA 48 Docket: AI13-30-08016 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : 67590 MANITOBA LTD., ) A. F. Hacault 70080 MANITOBA LTD. ) for the Applicants ) ) T. W. Hewett (Appellants) Applicants ) for the Respondent ) - and - ) T. D.

Gisser ) for the Municipal Board ) of Manitoba THE ASSESSOR FOR THE CITY OF ) WINNIPEG ) Chambers motion heard: ) April 23, 2015 ) (Respondent) Respondent ) Decision pronounced: ) May 6, 2015 CAMERON J.A. [ 1 ] The applicants seek leave to appeal from the order of the Municipal Board of Manitoba (the Board) regarding the assessed value of its property commonly referred to as “the Courts of St. James” located at 234 Ronald Street in Winnipeg (the property). [ 2 ] Although the notice of motion lists nine grounds of appeal, the applicants summarize the issues as follows: 1.

Whether the definition of value was properly stated and applied by the Board; 2. Whether the Board erred in basing its decision on a comparable which the Assessor for the City of Winnipeg (the Assessor) agreed to remove; and 3.

Whether the Board misconstrued the evidence on an important component of the income approach formula. [ 3 ] The test for leave to appeal was succinctly stated by Chartier J.A. (as he then was) in The Assessor for The City of Winnipeg v. 346 Portage Avenue Inc. , 2011 MBCA 110 (at para. 2 ): It is well settled that l eave to appeal may be granted only on a question of law or jurisdiction and, even then, only if the question has arguable merit and is one of sufficient importance to warrant the attention of this court.

It has also been held that neither the methodology used by the Board to determine assessed value nor its calculation of value is a question of law. See Richmond Six Ltd. et al. v. Winnipeg City Assessor et al. , 2009 MBCA 58 at para. 2 , 240 Man.R. (2d) 80 ; Winnipeg City Assessor et al. v. Lakeview Management Inc. et al. , 2004 MBCA 11 , 180 Man.R. (2d) 270 ; Lakeview Management Inc. v. Winnipeg City Assessor et al. , 2004 MBCA 12 , 180 Man.R. (2d) 272 ; Manitoba (Provincial Municipal Assessor) v. Ducks Unlimited Canada , [1998] M.J. No. 547 (QL) (C.A.) ; and Briarwood Investment Corp. v.

Winnipeg City Assessor , 2004 MBCA 103 , 187 Man.R. (2d) 316 . [ 4 ] For the reasons that follow, the applicants have not convinced me that the test has been met on any of the articulated grounds. Therefore, I would dismiss the application. 1. Whether the definition of value was properly stated and applied by the Board. [ 5 ] The Municipal Assessment Act , C.C.S.M., c. M226, s. 1(1) defines value as “the amount that the property might

reasonably be expected to realize if sold in the open market on the applicable reference date by a willing seller to a willing buyer.” Inthis case, the reference date is legislated as being April 1, 2010. [6] The parties agreed that the income approach to calculation was the correct method by which to assess the property. The questions of rental income and the variable repair and maintenance expenses to be included in the income approach calculation arenot in issue. [7] Rather, the applicants argue that the Board erred in law in its consideration of the legal definition of the word value.

In its order, the Board states: In determining the appropriate assessed value, the Board must determine the amount for which the property might reasonably have beenexpected to sell, in the open market, as of the legislated reference date. [8] The applicants argue that the above statement does not reference a willing buyer and a willing seller and thereforeconstitutes an error in law. [9] This argument is similar to, but not exactly on point with, the argument made in Richmond Six Ltd. et al. v. WinnipegCity Assessor et al., 2009 MBCA 58, 240 Man.R. (2d) 80.

In that case, the Board used the exact same language when articulating howto determine assessed value which was quoted with approval by Chartier J.A. in support of his conclusion that a question of law was notraised. Indeed, the language used by the Board in that case as well as in this case appears to be standard wording used by the Board. Surely the Board, with the knowledge and expertise it has in this area, cannot be taken to have disregarded the legislated definition bymerely simplifying its restatement.

In my view, the mere omission by the Board of the words “willing buyer” and “willing seller” do notraise a question of law. Even if it did, the chance of a successful appeal on this ground would be remote. [10] This, however, does not end the applicants’ argument that the Board failed to properly consider a willing buyer and awilling seller in its determination of value.

Rather, they argue that each of the following evidences a failure to understand the willingbuyer test and constitutes a question of law: 1) the Board’s rejection of the applicants’ position that a willing buyer would be a purchaser motivated to purchase the propertywith the intention of renovating it and selling the individual units as residential condominiums; and 2) the Board’s refusal to consider the calculable 2010 taxes as opposed to the 2009 taxes in its calculation of income value.

Thisargument is based on the premise that use of the 2010 taxes would have resulted in a lower net operating income and therefore a lowerpurchase price, and that a prudent purchaser would only buy on a reduced purchase price. Further, on the decision to use the 2009 taxes, the applicants assert:

a) that by using the 2009 taxes in its calculations, the Board failed to take into account current conditions as mandated by Sun Lifev. City of Montreal, (SCC), [1950] S.C.R. 220; and

b) that the Board was inconsistent in determining that it would “stabiliz[e] the income calculation based on 2009 and earlier years”and then stated it would use “the actual 2009 taxes in its calculation of the Net Operating Income.” [11] First, I agree with counsel for the Board that the above are all questions of methodology and calculation and do not raisequestions of law. Also, they do not evidence that the Board committed any error in its determination of value.

Failure to mention that itconsidered a willing, prudent buyer in its assessment does not mean that the Board was not alive to and/or did not consider the issue. This is especially true when the proceedings are reviewed in their entirety. The issues complained of by the applicants were prominentissues in the proceedings before the Board. [12] Furthermore, on its merits, the case has little chance of success.

In my view, it was within the Board’s authority toreject the applicants’ position that it was required to accept that a prudent buyer would have the intention of renovating and selling theunits as condominiums. It explained its reason for using the 2009 taxes on the basis that the other factors in the determination of value,such as rental income and other expenses provided, were for 2009, and that they might be different for 2010. The calculation of valuethus was not inconsistent with Sun Life, but rather, based on what the Board considered to be the most current and accurate figures.

I donot see any significant inconsistency in the Board’s decision. [13] As well, in assessing likelihood of success, reference can be made to the standard of review to be applied to the Board’sdecision. In my view, such determinations would be subject to review on the reasonableness standard (Canadian Property Holdings Inc.et al. v. Winnipeg City Assessor et al., 2012 MBCA 118 at para. 14, 288 Man.R. (2d) 66). As was stated in Dunsmuir v. New Brunswick,2008 SCC 9, [2008] 1 S.C.R. 190 (at para. 47): ….

In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within thedecision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes whichare defensible in respect of the facts and law. [14] In my view, the above standard would negatively affect the likely success of an appeal.

[15] Therefore, based on the above, I would deny leave on this ground. 2. Whether the Board erred in basing its decision on a comparable which the Assessor for the City of Winnipeg agreed to remove. [16] In support of this ground of appeal the applicants contend that the Board erred by taking into account a comparable salethat the parties had agreed to remove from consideration in the determination of the capitalization rate. I disagree. In its order, theBoard noted that, originally, the Assessor relied on the property. However, later, it noted that the applicants excluded it.

The consent toexclude the property from consideration is not mentioned in the order. [17] The applicants argue that failure to mention the consent of the parties amounts to an error, as it is impossible to discernwhether or not the Board considered it and, therefore, we must assume it did not. In my view, this argument deals with the sufficiency ofthe Board’s reasons. As was noted in Newfoundland and Labrador Nurses’ Union v.

Newfoundland and Labrador (Treasury Board),2011 SCC 62, [2011] 3 S.C.R. 708 (at para. 16): 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 No. 333 v. Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382, atp. 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. [18] Failure to mention a consent agreement does not, in these circumstances, constitute a question of law. Even if it did,there is little chance of success. This issue does not merit the full attention of the court and I would deny leave on this ground. 3.

Whether the Board misconstrued the evidence on an important component of the income approach formula. [19] The applicants argue that the Board erred in its determination of the capitalization rate. It contends that a .25 per centadjustment needed to be made to capitalization rates posted in the Colliers Reports to make them consistent with the way other rates areposted and considered.

Therefore, the rates should have been reported as 5.75 per cent to 6.75 per cent as requested by the applicantsinstead of the posted rates of 5.5 per cent and 6.5 per cent as noted in the order. [20] Again, this determination is a question of methodology and calculation and does not involve a question of law (GendisRealty Inc. v.

Winnipeg City Assessor, 2004 MBCA 123 at para. 4, 190 Man.R. (2d) 127). [21] Further, as noted by counsel for the Assessor, in stating that the Colliers posted rate was 6.5 per cent, the Board didfactor in a .25 per cent increase because the actual posted rated in Colliers was 6.25 per cent. [22] At the end of the day, the Assessor suggested a capitalization rate of 4.75 per cent and the applicants suggested a rate of6 per cent. The Board held that a rate of 5.5 per cent was appropriate.

In my view, the applicants would be hard pressed to show thatthis determination was unreasonable. [23] In conclusion, I would deny leave to appeal on all grounds and order costs against the applicants. J.A.