Winnipeg (City of) et al v Winnipeg Chinatown Development, 2022 MBCA 82

Citation: Winnipeg (City of) et al v Winnipeg Chinatown Development

(1981) Corporation et al, 2022 MBCA 82 Date: 20221011 Docket: AI21-30-09655 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : ) K. B. Bomback ) for the Applicants the city of winnipeg and the ) assessor for the city of winnipeg ) M. Newman ) for the Respondent ) Winnipeg Chinatown (Appellants) Applicants ) Development (1981) ) Corporation ) - and - ) T. D.

Gisser, K.C. ) for the Respondent ) The Municipal Board of winnipeg chinatown development ) Manitoba (1981) corporation and the ) Municipal board of manitoba ) Chambers motion heard: ) June 9, 2022 ) (Respondents) Respondents ) Decision pronounced: ) October 11, 2022 mainella JA Introduction [ 1 ] The appellants (collectively, the City) seek leave to appeal an order of the respondent, the Municipal Board of Manitoba (the Municipal Board), reducing the assessments of two properties for municipal tax purposes for the year 2014 (see Winnipeg Chinatown Development

(1981) Corp v Winnipeg (City) Assessor , [2021] MMBO No 313 (QL) (the Municipal Board order). [ 2 ] The two properties in question are heated underground parking structures in downtown Winnipeg owned by the respondent, Winnipeg Chinatown Development

(1981) Corporation (the corporation). It collects rent from the parking of motor vehicles at the two properties. [ 3 ]

Section 63 of The Municipal Assessment Act , CCSM c M226 (the Act ), allows for leave to appeal an order of the Municipal Board to this Court on a question of law or jurisdiction only. [ 4 ] Two proposed grounds of appeal are advanced by the City: (1) the Municipal Board erred in not finding that the corporation had failed to comply with a request for information and documentation under section 16(1) (

c) of the Act , and (2) the Municipal Board failed to conduct a new hearing and instead deferred to the record before and the decision of the Board of Revision of the City of Winnipeg (the Board of Revision) contrary to section 56(4) of the Act . [ 5 ] For the following reasons, the application for leave to appeal is dismissed. Background [ 6 ] During the assessment process for the year 2014, the City requested information from the corporation relating to the valuation of the properties.

A representative of the corporation completed a property income and expense questionnaire (the questionnaire) for each of the properties which he certified as “true and correct” the total annual income and expenses for parking at each property. The parts of the questionnaires which referred to the number of parking stalls at each property and the rental rates were not completed.

The City initially raised no concern as to the adequacy of the information provided by the corporation in relation to parking at the properties, both in the initial assessments and in the appeal to the Board of Revision. [ 7 ] The Board of Revision reduced the amount of assessed values of both properties for 2014 based on the recommendation of the appellant, the Assessor for the City of Winnipeg (the assessor). The assessed value of the first property was

reduced from $988,000 to $916,000, and the second property was reduced from $1,141,000 to $892,000.

The corporation was unsatisfied with this decision and appealed to the Municipal Board. [ 8 ] When the Municipal Board heard the corporation’s appeal, the adequacy of the disclosure of information in the questionnaires relating to the properties became a matter of contention. [ 9 ] In order to understand the dispute, it is necessary to consider sections 16(1) - 16(2) , 59(5) - 59(6) and 60(2.2) of the Act , which read as follows: Assessor may request information 16(1) An assessor may request that a person, including a Crown agency or Crown corporation, who owns, uses or occupies assessable property, provide to the assessor information or documentation that relates or might relate to, or that affects or might affect, the value of the property being assessed or that is or might be relevant to assessment of the property which, without limiting the generality of the foregoing, may include information for each year since the previous general assessment respecting (

a) any sale of the property; (

b) the cost of any construction on the property; and (

c) any income or expense related to the use or operation of the property.

Time to provide information and declaration 16(2) Where a person, including a Crown agency or Crown corporation, receives a written request from an assessor under subsection (1), the person shall, within 21 days of receiving the request, provide information or documentation to the extent that information or documentation to which the request relates is in the possession or control of the person and shall provide, in the form of a signed statement, a declaration of the person affirming that the information or documentation provided by the person is complete, true and accurate.

Burden of proof on appeals 59(5) Subject to subsection (6), the Municipal Board shall, at a hearing of an appeal, place the burden of proof on the assessor on matters at issue with respect to the amount of the assessed value and on the appellant on matters at issue with respect to the classification of property. Burden of proof for non-cooperation 59(6) Where a property owner fails or refuses (

a) to give an assessor a reasonable opportunity to inspect the property; or (

b) to comply with a request for information and documentation under

section 16; the Municipal Board, on an appeal under subsection 56(2), shall, at the hearing of the appeal, place the burden of proof on the property owner on all matters at issue. Effect of providing no information 60(2.2) Where a person failed to comply with a request for information or documentation under clause 16(1)(c), the Municipal Board shall specify in its order that any reduction in the assessed value of the person’s property is not to take effect until the year following the year to which the application relates. [ 10 ] The City took the position, before the Municipal Board, that the corporation had failed to provide information that had

been requested pursuant to section 16(1) (

c) of the Act as there was controversy as to the parking stall counts and the rental rate per parking stall at the properties. The City argued that, because the questionnaires were incomplete, the burden of proof was reversed and was on the corporation (see sections 59(5) - 59(6) of the Act ) and that the corporation was subject to a deferral penalty due to non- compliance (see section 60(2.2) of the Act ). [ 11 ] The Municipal Board rejected the City’s submission that the corporation had not cooperated in providing information during the assessment process as to the information being asked in the questionnaires.

It stated in the Municipal Board order (at paras 44-47): The [Municipal] Board acknowledges that the non-compliance being alleged by the Assessor is not due to the [corporation’s] failure to provide any information at all or to the timeliness of the responses. In these respects, there is no dispute. The issue is whether or not there was non-compliance by reason that the information provided in the [questionnaires] was incomplete or deficient. Each case must be examined on its particular facts.

The [Municipal] Board notes that there is no clear precedent, or express statutory requirements or guidelines on what may be deemed an incomplete or inadequate response. The [Municipal] Board is guided by the overarching purpose of the legislation, as was noted by the Court in Licharson [ Winnipeg City Assessor et al v Licharson et al , 2005 MBCA 95 ], which is to facilitate the gathering of information by the assessor so that the general assessment roll can be completed on a timely basis.

In this case, for both the [questionnaires], total revenue and total expenses were reported but there were no reported stall counts or rental rates. The [Municipal] Board, however, lacks sufficient evidence to show that the information provided by the [corporation] was deficient or incomplete in any way so as to skew or create an imbalance in the City’s budget.

Further, there is insufficient evidence before the [Municipal] Board to suggest that the reported information was of a level of inadequacy so as to render the information of no utility or use to the Assessor in preparing the general assessment roll for the Properties in a timely manner. The [Municipal] Board also notes that the Assessor did not appear to have any issue with the available data and disclosures by the [corporation] when it took the additional step of recommending reductions in the assessments at the [Board of Revision] level.

The evidence reveals that the Assessor relied on [the net operating incomes] for the Properties that were very closely aligned to the [net operating incomes] reported by the [corporation]. The [Board of Revision] decisions for the Properties were based on income that had been reported. The Assessor was therefore able to prepare an assessment and utilize the information from the questionnaires in recommending reductions in the assessments to the [Board of Revision].

Although the [Municipal] Board acknowledges Municipal Board Order A-17-111 in regards to the 2012 assessment appeal for [the first property], it is not strictly bound to follow that Order. The [Municipal] Board notes that this hearing is de novo and the [Municipal] Board is basing its decision solely on the evidence and submissions filed and presented at the hearing. Based on all of the evidence and submissions, the [Municipal] Board is unable to make a finding of non-compliance in regards to the [questionnaires] pursuant to requests for information under Section 16(1) (

c) of the Act . As such, the burden of proof under Section 59(6) of the Act does not shift and remains with the Assessor on all issues. Further, since the pre-condition to Section 60(2.2) has not been met, the deferral penalty under Section 60(2.2) is not triggered and will have no application to the Properties under appeal before the [Municipal] Board. [ 12 ] In its order, the Municipal Board reduced the assessed value of the first property from $916,000 to $861,000, and the second property from $892,000 to $861,000.

Discussion Criteria for Leave to Appeal [ 13 ] The exercise of discretion as to whether to grant leave to appeal an order of the Municipal Board was discussed by Hamilton JA in Gardentree Village Inc v Winnipeg (City) Assessor , 2008 MBCA 117 , in the following manner (at para 20): Leave to appeal a decision of the Board may only be granted on a question of law or jurisdiction. See s. 63(1) of the Act . Questions of fact or mixed fact and law do not meet the threshold for leave.

For leave to be granted for a question of law, the question must be of some importance to engage the attention of the court and there must be a genuine issue concerning how the Board decided the matter. . . . See also Manitoba (Provincial Municipal Assessor) v Ducks Unlimited Canada , 1998 CarswellMan 488 at para 7 (CA (in Chambers)). The Corporation’s Disclosure of Information in the Tax Assessment Process [ 14 ] The threshold issue with the City’s first proposed ground of appeal (that the Municipal Board erred in concluding that the corporation had complied with its obligations under section 16(1) (

c) of the Act in disclosing information in relation to parking stalls

and rates at the properties during the tax assessment process) is whether the proposed ground of appeal is a question of law or a questionof mixed fact and law. [15] The distinction between a question of law, a question of fact, and a question of mixed fact and law is well-known.

InCanada (Director of Investigation and Research) v Southam Inc, (SCC), [1997] 1 SCR 748, Iacobucci J explained (atpara 35): . . . [Q]uestions of law are questions about what the correct legal test is; questions of fact are questions about what actually took placebetween the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. . . . I recognize,however, that the distinction between law on the one hand and mixed law and fact on the other is difficult. . . .

See also Housen v Nikolaisen, 2002 SCC 33 at paras 27-31. [16] Decisions of the Municipal Board as to the adequacy or timeliness of a property owner’s disclosure of information ordocumentation pursuant to

section 16 of the Act are “entitled to some degree of deference” (Winnipeg City Assessor et al v Licharson etal, 2005 MBCA 95 at para 92 (Licharson 2005)). This is because such decisions are questions of mixed fact and law as they involve theapplication of a legal standard to a set of facts (see Housen at para 26). [17] However, that does not end matters. As was explained in Housen, it is possible in some limited situations to extricate apure legal question from what appears to be a question of mixed fact and law (see para 34).

This can include the application of anincorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor (see Sattva CapitalCorp v Creston Moly Corp, 2014 SCC 53 at para 53). [18] Licharson v Winnipeg (City) Assessor, 2004 MBCA 34 (Licharson 2004) is noteworthy.

There, the Municipal Boardconcluded that the property owner was not compliant with his obligation to provide information pursuant to section 16(1) of the Act, butdeclined to reverse the burden of proof at the appeal and impose a deferral penalty under the Act because, in its view, it would be“unfair” and “inappropriate” to do so (at paras 7, 11).

Understandably, leave to appeal was granted as there was an extricable legalquestion, as discussed in Sattva at para 53: the application of an incorrect principle by an administrative tribunal. [19] When Licharson 2004 came before a panel of this Court, it was held that the Municipal Board erred in law as it appliedan incorrect principle: the Act gave it no discretion, based on its “perception of unfairness” (Licharson 2005 at para 91) to not reversethe burden of proof and impose a deferral penalty when, in its view, the conditions of same existed. [20] The situation here is quite different.

The Municipal Board was not satisfied on the facts that the corporation had beennon-compliant. In reaching that decision, the Municipal Board did not misdirect itself. [21] The role of this Court is not to “involve itself in” or “reconsider” questions of fact (Norwood Hotel Co v Winnipeg(City) Assessor, 1999 CarswellMan 117 at para 2 (CA (in Chambers))). I have not been persuaded that the City’s first proposed groundof appeal meets the threshold of being a question of law.

The reasons of the Municipal Board confirm that it turned its mind to whetherthe missing information in the questionnaires amounted to non-compliance with the corporation’s obligations under section 16(1)(

c) ofthe Act taking into account what had and had not been disclosed and the conduct and expectations of the parties.

Nature of the Hearing Before the Municipal Board [22] Section 56(4) of the Act states: New hearing on appeal 56(4) An appeal to the Court of King’s Bench or to the Municipal Board is a new hearing on the matters that were put at issue beforethe board. [23] The other proposed ground of appeal of the City is that the Municipal Board failed to conduct a “new hearing” asrequired by section 56(4) of the Act; rather, it simply deferred to the record before it and to the decision of the Board of Revision.

Forthe sake of argument, I will assume, without deciding, that this ground of appeal raises a question of law or jurisdiction alone. [24] The City has not persuaded me that there is an arguable case of substance to this submission (see Sattva at paras 73-74). [25] The hearing before the Municipal Board consisted of documentary evidence in the form of several assessment andrebuttal briefs for the two properties, as well as the testimony of the assessor who took over the appeals in 2017 and a consultant hired bythe corporation.

In its reasons for decision, the Municipal Board stated: “The [Municipal] Board notes that this hearing is de novo andthe [Municipal] Board is basing its decision solely on the evidence and submissions filed and presented at the hearing” (Municipal Boardorder at para 47).

[ 26 ] In light of the record before me, I see no reason why the Municipal Board should not be taken at its word; the appeal was determined by way of a new hearing (see R v O’Brien , 2011 SCC 29 at para 18 ; and UAlberta Pro-Life v Governors of the University of Alberta , 2020 ABCA 1 at para 98 ). The mere fact that the Municipal Board heard evidence similar to the Board of Revision or came to a similar decision is not determinative; that is a common occurrence in tax assessment appeals (see Rideau Towers Inc v Winnipeg (City) Assessor , 1998 CarswellMan 517 at para 9 (CA (in Chambers))).

The concerns raised by the City are not persuasive enough to require this Court to look behind the stated words of the Municipal Board.

Importance of the Appeal [ 27 ] While my comments are sufficient to dispose of the City’s application, I wish to make one final observation. [ 28 ] For leave to appeal to be granted, the question must be of importance not just to the instant case, but in determining similar disputes in the future (see Pelchat v Manitoba Public Insurance Corp and Automobile Injury Compensation Appeal Commission , 2006 MBCA 90 at para 2 ). [ 29 ] Errors in the municipal tax assessment are fleeting as the City can correct them in the next assessment cycle (which is every two years).

That reality forms part of this Court’s consideration of the issue of a case’s importance in deciding whether to grant leave to appeal. There is no doubt that there will be some tax assessment cases where the importance of the issue in dispute transcends the amount at stake because of the precedential importance to like cases.

However, this is not such a case. [ 30 ] The financial consequences to the City’s budget of the Municipal Board reducing the assessment of the first property by $55,000 and the second property by $31,000, were not commented on by counsel and I will not speculate about such matters other than to say that I would sincerely doubt that these dollar figures alone would be of sufficient importance to warrant the attention of this Court. I have no reason to believe that the City’s budget would be unreasonably distorted because of what the Municipal Board decided (see Licharson 2005 at para 9 ).

While the dispute underlying the application for leave is of importance to the immediate parties, it is not a matter of any importance to others. [ 31 ] Based on the materials before me, had I been convinced that the City had an arguable case of substance on a question of law, I would have denied leave to appeal, in any event, given the absence of importance to the issues raised to settle similar disputes in the future. [ 32 ] In the result, the application for leave to appeal is dismissed with costs. JA