City Centre Equities Inc. v Regina (City), 2019 SKCA 80

Court of Appeal for Saskatchewan Docket: CACV3051 Citation: City Centre Equities Inc. v Regina (City) , 2019 SKCA 80 Date: 2019-08-21 Between: City Centre Equities Inc. Appellant (Applicant) And City of Regina and Saskatchewan Assessment Management Agency Respondents (Respondent) Before: Ottenbreit, Caldwell and Whitmore JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr. Justice Ottenbreit In concurrence: The Honourable Mr. Justice Caldwell The Honourable Mr.

Justice Whitmore On Appeal From: Saskatchewan Municipal Board Assessment Appeals Committee, AAC 2014-0023.1, Regina Appeal Heard: December 3, 2018 Counsel: Leonard Andrychuk, Q.C., for the Appellant Jayne Krueger for the Respondent Ottenbreit J.A. I. Introduction [ 1 ] City Centre Equities Inc. [City Centre] appeals from the decision of the Assessment Appeals Committee of the Saskatchewan Municipal Board [Committee] relating to s. 227 of The Cities Act , SS 2002, c C-11.1 [ Act ].

Section 227 of the Act provides that a decision of a board of revision [BOR] or the Committee in respect of an assessment for one year may be applied to the subsequent years’ assessment that was placed on the roll while such decisions were pending. [ 2 ] For the reasons hereinafter set forth, the appeal is dismissed. II. Facts and Background [ 3 ] In November 2013, the City of Regina [City] sent City Centre a notice of assessment for 2014 assessing its property at 1874 Scarth Street [Property] at a value of $30,892,500 [Original 2014 Assessment].

The Original 2014 Assessment was prepared using an income approach model and a capitalization rate derived from six sales, including the sale of a one-third interest in 1800 Hamilton Street in Regina [1800 Hamilton]. [ 4 ] In March 2014, City Centre appealed the Original 2014 Assessment to the BOR on the ground that the assessor had erred in treating the sale of 1800 Hamilton as an arm’s-length sale and including it in the capitalization rate calculation. [ 5 ] In May 2014, the BOR allowed City Centre’s appeal and required the assessor to remove the sale of 1800 Hamilton from the capitalization calculations [2014 BOR Decision].

This reduced the assessment on the Property. The City immediately appealed the 2014 BOR Decision to the Committee. [ 6 ] In June 2014, the City amended the 2014 assessment roll to reflect the 2014 BOR Decision and sent a revised assessment and tax letter to City Centre reducing the assessment on the Property in accordance with that decision. [ 7 ] On September 26, 2014 and March 19, 2015, Saskatchewan Assessment Management Agency [SAMA] confirmed the 2014 assessment roll of the City pursuant to s. 228(2) of the Act [2014 Assessment].

The effect of this was that the 2014 Assessment incorporated the 2014 BOR Decision and was the product of a capitalization rate calculation that did not include 1800 Hamilton. [ 8 ] On November 7, 2014, the City sent City Centre an assessment notice on the Property for 2015 [2015 Assessment] reflecting the same assessed value as determined by the 2014 BOR Decision.

City Centre did not appeal the 2015 Assessment. [ 9 ] On November 7, 2015 and February 26, 2016, SAMA confirmed the 2015 assessment roll, which included the 2015 Assessment of the Property. [ 10 ] On February 22, 2016, the Committee set aside the 2014 BOR Decision ( Regina (City) v Altus Group Ltd. , AAC 2014-0023 to 2014-0061, [2016] SMBAACD No 4 (QL) [ 2014 Committee Decision ]). It found the BOR had erred in removing 1800 Hamilton from the capitalization rate calculation and ordered that the Original 2014 Assessment be restored.

In June 2016, City Centre obtained leave to appeal the 2014 Committee Decision to this Court. [ 11 ] On June 28, 2016, the City sent a tax notice to City Centre increasing taxes for the Property for 2014 and 2015 to reflect the 2014 Committee Decision . The City purported to recalculate the 2014 taxes in accordance with s. 270 of the Act and the 2015 taxes in accordance with s. 227 of the Act .

Section 227 allows a decision made by the BOR or Committee to apply to assessments of a property in subsequent years to the extent it relates. The City acknowledged the 2014 Committee Decision was on appeal to this Court but stated that

it was required to apply the 2014 Committee Decision and that taxes were payable in accordance with that decision. The City indicatedthat if this Court ruled in favour of a reduced assessment, then the tax account of City Centre would be adjusted to reflect the decision ofthis Court. [12] City Centre thereafter applied to the Committee under s. 227 of the Act for direction on whether that

section could be used inrespect of the 2015 taxes. On March 14, 2017, the Committee issued its decision on the s. 227 application as will be detailed below (CityCentre Equities Inc. v City of Regina, AAC 2014-0023.1, [2017] SMBAACD No 1 (QL) [2017 Committee Decision]). [13] On June 6, 2018, this Court allowed City Centre’s appeal of the 2014 Committee Decision (City Centre Equities Inc. v Regina(City), 2018 SKCA 43, 75 MPLR (5th) 179 [City Centre 2018]), the effect of which was to restore the 2014 BOR Decision that haddeleted 1800 Hamilton from the capitalization rate calculation. III.

Decision of the Committee [14] City Centre applied to the Committee under s. 227 for direction on several issues: whether the City or assessor could uses. 227(1) to apply the 2014 Committee Decision to prepare the 2015 Assessment of the Property without the agreement of the parties or aruling by the Committee; whether s. 227 could be applied on an interim basis while the 2014 Committee Decision was on appeal to thisCourt; whether the 2014 Committee Decision could be applied under s. 227(1) at all because the assessment in 2015 was different fromthe 2014 Assessment that was the subject of the appeal; and whether the use of s. 227 deprived City Centre of its right to appeal the 2015Assessment. [15] The Committee instructed itself on the principles of legislative

interpretation, citing Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 SCR 27 [Rizzo Shoes], and s. 10 of The

Interpretation Act, 1995, SS 1995, c I-11.2. After reviewing thegrammatical and ordinary sense of the words “extent” or “relates” found in s. 227(1), the Committee considered the context of the Act aswell as s. 22(12.1) of The Assessment Management Agency Act, SS 1986, c A-28, and s. 33(1) of The Municipal Board Act, SS 1988-89, cM-23.2.

The Committee also considered s. 165(3.2) and s. 270 of the Act and their meaning. [16] With respect to s. 270(2), the Committee determined: [33] To apply subsection 270(2) at every level of decision may appear illogical and inefficient to some, but there is nothing in thelegislation that prevents it. In our view, to read “the appeal decision” in subsection 270(2)(

a) as meaning the final decision in an appealdecision would interfere with the City’s ability to assess property and collect taxes. [34] Such an obstruction would impede the authority legislators gave cities and result in undue delay in the collection of property taxes,which could take years to resolve depending on how long it takes an appeal to work its way through all levels of the process. [17] With respect to whether agreement between the parties to an appeal was necessary to invoke s. 227, the Committee reviewed itsprevious decisions on s. 227.

The Committee found that s. 227 made it compulsory that the Committee hear the application, but not thatthere be agreement before s. 227 could be applied: [37] The Committee finds there is no ambiguity in paragraph 10 from Gordstone. Two prerequisites must be met: the parties have to bethe parties from the original appeal; and these parties must disagree to the application of a previous decision.

The word then signifies whathappens when the prerequisites are met – which is – the Committee must “hear and decide the application” (Gordstone, para 10). [38] The Applicant also uses 2005 SMBAACD No. 11 [Strand Theatre] as further support for the position that an agreement is requiredbefore

section 227 can apply. The City disagrees and so do we. [39] Strand Theatre does not say property owners must give permission before

section 227 can apply – the decision states: The Act states that any party to the appeal may make an application to the Committee for a ruling on whether the decision should apply tosubsequent years. The parties to this appeal have obviously not come to any agreement to carry forward the decision from 2003 to 2004. Inthis case the Committee finds it is the assessor who must make the application as it is the appellant who is not in agreement on carryingthe decision forward (Strand Theatre, para 28). [18] With respect to whether an assessment decision would apply to a following year, the Committee said: [42] A

summary of previous Committee rulings is: Whether or not an assessment decision will apply to a following year depends on thecircumstances of the property. If the circumstances are similar, the previous year will apply to the following year.

If the circumstances arenot similar, the previous year will not apply to the following year (Gordstone, paras 17, 22-24; Strand Theatre, para 30; 2008 SMBAACDNo. 9, paras 11, 19; North Ridge, paras 19–20). [19] With respect to whether s. 227 deprived City Centre of its right of appeal, the Committee held as follows: [43] The Applicant believes property owners are deprived of their right to appeal if the Assessor applies a decision in one year to adifferent assessment in a following year. We disagree. [44] Property owners have the right to appeal every year.

If a property owner misses the appeal period it is unfortunate but one cannot gobackwards. Nothing in the Act prevents the Assessor from applying the results of a decision. In the present case, the assessment changed,not the method used to determine the assessment. Only one sale was removed from the CAP rate array by the Board in 2014 and theCommittee overturned that decision.

[ 20 ] The Committee concluded: [47] Our previous review of sections of the Act in the context

section of this decision (paras [21]–[34]) when compared to the purpose of the Act , leads us to find the City did not do anything that was not within its jurisdiction and authority. CONCLUSION: [48] The Committee finds:

a) The City or the Assessor can apply subsection 227(1) of the Act without the agreement of the parties or a ruling by the Committee.

b) The City or the Assessor can apply subsection 227(1) of the Act on an interim basis while the Committee’s decision for the prior year is still before the Courts.

c) The result of the 2014 appeal can apply under subsection 227(1) of the Act when the assessment in the following year is different from the original assessment that was the subject of the appeal and decision in the prior year. IV. Issues [ 21 ] City Centre raises the following issues: (

a) Did the Committee err in its

interpretation and application of s. 227? (

b) Did the Committee err when it found the assessor could apply s. 227(1) of the Act without the agreement of the parties or a ruling by the Committee? (

c) Did the Committee err when it found the assessor could apply s. 227(1) on an interim basis while the Committee’s 2014 decision was still before the courts? V. Analysis A. Did the Committee err in its

interpretation and application of s. 227? [ 22 ] City Centre first submits the 2014 Committee Decision did not “relate” to the 2015 Assessment and therefore s. 227 could not be used. It argues this is because the 2014 Assessment, which was the subject of the 2014 Committee Decision , had initially included the sale of 1800 Hamilton in the capitalization calculation but the 2015 Assessment never did. [ 23 ] Second, City Centre argues that invoking s. 227(1) with respect to 2015 deprives it of the right to appeal any issue it has with the 2015 Assessment.

It submits that had the assessor chosen to include the sale of 1800 Hamilton for 2015, as the assessor did for the Original 2014 Assessment, it would have had the right to exercise its annual right of appeal to challenge its inclusion. [ 24 ] Third, City Centre argues the application of s. 227(1) would create inequity and offend s. 165 of the Act . It says this because the owners of all office buildings who did not appeal their 2015 assessments got the benefit of the absence of 1800 Hamilton from the capitalization rate calculation and therefore received a lower assessment.

On the other hand, taxpayers such as City Centre, who had appealed their 2014 assessments would, as a result of the application of the 2014 Committee Decision pursuant to s. 227(1), have a higher assessment. [ 25 ] The City acknowledges that the capitalization rate used to prepare the 2015 Assessment was different than that originally used for 2014 as a result of the removal of 1800 Hamilton from that calculation, but submits the assessment model and the circumstances of the Property (i.e., the site, parcel size, zoning or uses of the building) were unchanged from 2014 to 2015.

It argues the use of s. 227 was appropriate. [ 26 ] The City also submits that it was required by s. 270(2)(

a) to adjust the taxes in accordance with any appeal decision as it was issued and not wait until the appeal process was at an end. [ 27 ] Last, the City submits that City Centre could have appealed the 2015 Assessment on a protective basis but chose not to do so. It notes that the loss of the opportunity to appeal arose not because of the City’s use of s. 227, but because the assessment roll for 2015 was confirmed before the Committee rendered its decision and therefore the roll could not be changed.

If the Committee decision had been rendered before the roll was confirmed, then the assessment could have been changed and there would have been a right of appeal. [ 28 ] I turn now to assessing the merits of City Centre’s arguments. [ 29 ]

Section 227 of the Act reads: Application of decisions 227

(1) A decision made by a board of revision or the appeal board on an appeal of an assessment of any property applies, to the extent that it relates, to any assessment placed on the assessment roll for the property after the appeal is initiated but before the decision is made,

without the need for any further appeal being initiated with respect to the assessment.

(2) If the parties to an appeal cannot agree as to whether or to what extent subsection (1) applies in their circumstances, any party to theappeal may apply to the board that issued the decision to issue a ruling on the matter.

(3) On an application pursuant to subsection (2), the board may make any ruling that it considers appropriate and that ruling is subject toappeal in the same manner as any other decision issued by that board. [30] In South Hill Mall Property Holdings Inc. v Prince Albert (City), 2017 SKCA 52 [South Hill], this Court determined theinterpretive approach to be used in connection with s. 227 and the Act: [16] Key to this appeal is the

interpretation of s. 227(1) of the Act. In discerning the meaning of that subsection, the words used are to beread in context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, its objects and the intention of theLegislature (Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 SCR 27 at para 21). See also City Centre 2018 at paragraph 60. [31] Applying the interpretive approach of Rizzo Shoes, I note s. 227 is situated within

Part X of the Act, which deals withassessment. This part as a whole details the right and duty of the City to assess taxes and sets out the process to do so. [32]

Section 227 is also located in Division 7 of

Part X dealing with appeals to the Committee.

It comes immediately after s. 226,which concerns the power of the Committee to ensure that assessments are changed in accordance with its decisions and which includess. 226(5), directing the assessor to make those changes if the assessment roll has not been confirmed. [33] In Corman Park (Rural Municipality) v 618421 Saskatchewan Ltd., 2018 SKCA 29, 73 MPLR (5th) 1 [Corman Park], thisCourt underlined the fundamental principles grounding the Legislature’s intent in passing the assessment provisions: to provide for atimely, efficient and certain annual assessment process whereby the taxes are known within the year and there is a timely adjudication ofappeals: [11] In general terms, The Municipalities Act provides for annual assessment and taxation of real property in a municipality, althoughthe Act also addresses municipal governance and other matters.

Local government authorities, such as municipalities, school boards andlibraries, depend upon municipal property taxes as their primary source of revenue. Municipalities establish annual mill rates or tax rateson the basis of their projected fiscal requirements and the aggregate assessed value of all taxable property within the municipality. Forreasons of certainty in terms of amount and receipt of tax revenue, The Municipalities Act sets out steps that municipalities and assessorsmust take annually to assess properties and it establishes deadlines for the completion of those steps.

It also establishes rights of appealand deadlines for taxpayers, municipalities and SAMA to appeal against property tax assessments. The relevant provisions are found underParts X (Assessment) and XI (Taxation) of The Municipalities Act.1(emphasis added) [15] In Regina (City) v Newell Smelski Ltd. (1996), (SK CA), 152 Sask R 44 (CA) [Newell Smelski], Cameron J.A.characterised the scheme under predecessor relevant legislation in these terms: [38] ...

The scheme is concerned with assessment, preparation of an annual assessment roll, appeals against assessment, confirmation ofthe annual roll, and so on, which are mapped out with a series of timing marks. But the marks are more significant in their cumulative,than in their individual, effect, for they are designed on the whole to meet an ultimate annual objective in timely fashion. While the statutory scheme has changed somewhat since Newell Smelski, the foregoing characterisation remains applicable.

See alsoWascana Energy Inc. v Gull Lake (Rural Municipality No. 139) (1998), (SK CA), 168 Sask R 58 (CA), and MaroseInvestments Ltd. v Regina (City), 2009 SKCA 20, 324 Sask R 56 [Marose Investments]. … [30] As mentioned at the outset, the assessment and appeal timelines are important because the assessment process underpins thecalculation and recovery of the municipal property taxes payable in respect of all taxable property within a municipality. … All of thisdemonstrates the Legislature’s intention that the process of property assessment and taxation should occur largely within a calendar year,as Cameron J.A. concluded in Newell Smelski. … [96] … In this respect, the overall scheme of the appeal provisions under The Municipalities Act is to provide taxpayers, municipalitiesand assessors with an efficient process that produces final property assessments within the year of assessment. (Italic emphasis added, underline emphasis in original) [34] The history of s. 227 will also be helpful in determining its meaning.

The previous iteration of the Act is The UrbanMunicipality Act, 1984, SS 1983-84, c U-11 [UMA], which remains in effect for certain municipalities.

Section 263.3 of UMA is theequivalent of s. 227 of the Act: Same decision applies 263.3(1) A decision made by the board of revision or the appeal board on an appeal of an assessment of any land or improvements applies,to the extent that it relates, to any assessment placed on the assessment roll for the land or improvements after the appeal is initiated butbefore the decision is made, without the need for any further appeal being initiated with respect to the assessment.

(2) Where the parties to an appeal cannot agree as to whether or to what extent subsection (1) applies in their circumstances, any party tothe appeal may apply to the board that issued the decision to issue a ruling on the matter, and that ruling is subject to appeal in the same

manner as any other decision issued by that board. [ 35 ] This

section was introduced in 1998 under The Urban Municipality Amendment Act, 1998 , SS 1998, c 42 .

The reasoning for the provision was stated by the Honourable Carol Teichrob (Saskatchewan, Legislative Assembly, Debates and Proceedings (Hansard) , 23rd Leg, 3rd Sess (15 May 1998) at 1187 [ Hansard ]): This change responds to three significant municipal concerns: the lateness of SAMA’s (Saskatchewan Assessment Management Agency) delivery of assessment of numbers for 1997; the limited time which municipalities had available last year to make tax policy decisions; and the financial uncertainty associated with assessment appeals for municipalities and school boards.

Hansard therefore suggests that the purpose of enacting the provision was to address concerns regarding the timeliness of the assessment and appeal process. [ 36 ] This Court in South Hill has addressed the meaning and ambit of s. 227 and its operation within the assessment process: [19] The Act requires that annual assessments of property be prepared and, in accordance with s. 165(3.1), “each assessment must reflect the facts, conditions and circumstances affecting the property as at January 1 of each year as if those facts, conditions and circumstances existed on the applicable base date.” “Base date” is defined in s. 163 of the Act to mean the date for determining property values for the assessment roll.

Base dates are established for an assessment cycle, which is generally four years.

A property assessment will usually be the same for each of those four years unless the “facts, conditions and circumstances affecting the property” change, an assessment appeal requires a change or the assessor alters the assessment model. … [26] Reading the words of s. 227 in context and in their grammatical and ordinary sense, keeping in mind the objects and scheme of the Act , it is clear s. 227 was meant to provide a mechanism by which appeal decisions of the BOR or the Committee can be applied to a subsequent assessment without the need for a further appeal. The

section provides certain preconditions to its application. For the

section to apply, the subsequent assessment must be placed on the roll, that placement must occur after the appeal of the prior assessment has been initiated but before a decision has been rendered, and the subsequent assessment must relate to the same property as the decision to be extended. Finally, the BOR or Committee decision will only be applied to a subsequent assessment “to the extent that it relates” to such assessment.

Axiomatically, if the assessment model has not been altered and nothing has changed with regard to the facts, conditions and circumstances of the property, then the BOR or Committee decision will obviously be applicable to a subsequent assessment, provided the subsequent assessment has not itself been appealed. In this appeal, however, not only was the subsequent assessment appealed, but the BOR had rendered a decision with respect to that appeal, which reduced the MAF and thus changed the assessment. [ 37 ] Based on the placement of s. 227 in the Act , its legislative history and the Court’s

interpretation of it in South Hill , several conclusions may be drawn. As a first point, s. 227 was implemented to assist and facilitate the assessment process and the preparation of assessments in a timely manner. Second, s. 227 is a mechanism designed to ensure that appeal decisions are properly applied in the assessment process as a whole. [ 38 ] Section 227(1) has no mandatory direction to “apply” appeal decisions but obviously it can, in the proper circumstances, be invoked.

In order to appreciate fully the function of s. 227 , it will be helpful to determine who can resort to it at first instance. [ 39 ] Unlike other sections of the Act and related Acts requiring the application of appeal decisions, s. 227 is silent on who has the duty to apply appeal decisions.

In the case of s. 211, for example, there is an explicit direction to the assessor to apply the decision of the BOR: 211 The assessor shall make any changes to its assessment roll that are necessary to reflect the decision of a board of revision. [ 40 ] In the case of s. 270, SAMA or the municipality is explicitly mandated to adjust the taxes in accordance with the appeal decision: Effect on taxes of appeals re assessments 270

(1) Subject to subsection (2), if the assessment roll is confirmed before appeals to the board of revision, the Saskatchewan Municipal Board or the Court of Appeal have been disposed of, no amendment or alteration to the roll may be made except as provided for in

section 178 or 179. ( 2) If a decision on appeal would result in a change or alteration in the assessment of property on the roll if the roll had not been confirmed: (

a) the city shall adjust the taxes on the property in accordance with the appeal decision; and (

b) if: (

i) the appeal decision cancels or reduces the assessment on the property: (

A) the city shall refund all or part of the taxes paid in excess of those required to be paid as a result of the appeal decision; and (

B) the other taxing authority shall refund the city all or part of the taxes paid by the city on behalf of the other taxing authority in excess of those required to be paid as a result of the appeal decision; or (ii) the appeal decision confirms or increases the assessment on the property, the property is liable for and the city shall collect the amount of taxes that would be payable as if the original assessment were that set by the appeal decision.

(3) Any taxes and penalties required to be paid as a result of an appeal decision are recoverable pursuant to this Act and The Tax Enforcement Act . [ 41 ]

Section 72 of The Municipal Board Act , SS 1988-89, c M-23.2 , requires the assessor to amend unconfirmed assessment rolls and property tax rolls to reflect decisions of the Committee: 72

(1) Repealed. 1996, c.51, s.9 .

(2) Unconfirmed assessment rolls, property tax rolls and, where applicable, equalized assessments of a municipality shall be amended by the municipality or the Saskatchewan Assessment Management Agency, as the case may require, to reflect the decisions or orders of the board. [ 42 ] Subsection 22(12.1) of The Assessment Management Agency Act , SS 1986, c A-28.1 , requires an assessment appraiser to apply appeal decisions:

(12.1) If the appeal board has issued a decision with respect to a property, an assessment appraiser: (

a) shall apply the decision of the appeal board in subsequent valuations and revaluations of that property; and (

b) in applying the decision pursuant to clause (a), may make any necessary modification to reflect any change in the facts of the decision, in the conditions or circumstances of the property or in market value as defined in the municipal Act. [ 43 ] Although s. 227(1) has no mandatory direction to the assessor or City to “apply” appeal decisions like the similar provisions mentioned above, its purpose and function is roughly similar to those provisions.

It therefore makes sense that the assessor (who has the statutory duty to prepare assessments) or the City (which has the statutory duty pursuant to the legislative provisions set forth above to adjust assessment and tax rolls in accordance with appeal decisions) be entitled to invoke the

section in the first instance in the course of carrying out that duty. Such a conclusion is consistent with the overall scheme of the Act “to provide taxpayers, municipalities and assessors with an efficient process that produces final property assessments within the year of assessment” ( Corman Park at para 96 , see also para 30). That said, my conclusion that the assessor or City is entitled to invoke s. 227(1) is subject to my analysis of the effect of s. 227(2) that will follow. [ 44 ] I turn next to the meaning of the words “to the extent that it relates” in s. 227(1).

It is helpful to repeat the excerpt from South Hill : [26] … Finally, the BOR or Committee decision will only be applied to a subsequent assessment “to the extent that it relates” to such assessment.

Axiomatically, if the assessment model has not been altered and nothing has changed with regard to the facts, conditions and circumstances of the property, then the BOR or Committee decision will obviously be applicable to a subsequent assessment, provided the subsequent assessment has not itself been appealed. [ 45 ] Based on the foregoing, s. 227 will apply and the appeal decision will “relate” to the assessment for the subsequent year if (

i) the assessment model has not been altered, (ii) nothing has changed with regard to the material facts, conditions and circumstances of the property, and (iii) the subsequent assessment has not itself been appealed. [ 46 ] The above reference in South Hill to “facts, conditions and circumstances” of the property parallels the wording in s. 165(3.1) of the Act which reads as follows:

(3.1) Each assessment must reflect the facts, conditions and circumstances affecting the property as at January 1 of each year as if those facts, conditions and circumstances existed on the applicable base date. (Emphasis added) [ 47 ] Having found that s. 227 exists to facilitate the assessment process, I am satisfied that the phrase “facts, conditions and circumstances” as used in South Hill in reference to s. 227 has the same meaning as in s. 165(3.1) .

The implication of this is that the phrase refers to aspects or characteristics of the property itself and factors such as use, location and zoning of the land and improvements as was in the past set out in the Assessment Manual pursuant to The Assessment Management Agency Act.

I pause to note that the Assessment Manual no longer has the force of law under s. 165, but the assessment principles and practice as laid down in the Manual are still relevant in determining the propriety of assessments ( Imperial Oil Limited v Regina (City), 2016 SKCA 107 at para 50 , 408 DLR (4th) 46 ). [ 48 ] The other factor that South Hill suggests would govern the application of s. 227 is the constancy of the assessment model. Different assessment models are well documented in the jurisprudence.

For example, a Rent Model was used in Saskatoon (City) v Walmart Canada Corp., 2018 SKCA 2 ; whereas a Retail Non-CBD Assessment Model in Crombie Property Holdings Limited v Saskatoon (City ), 2016 SKCA 47 . [ 49 ] In the case at hand, the assessor used the income model or approach for both 2014 and 2015. City Centre admits that s. 227 assumes that the same assessment model will typically be used for an entire four-year assessment cycle. The years 2014 and 2015 were part of the same cycle.

I agree with the Committee that the assessment model is unaltered where the subsequent assessment is prepared using the same methods and principles as used previously ( North Ridge Development Corporation v Saskatoon (City) , (June 20, 2014) AAC 2011-0089, AAC 2012-0066, [2014] SMBAACD No 4 (QL)). [ 50 ] The last prerequisite in order for the appeal decision to relate (i.e., that the subsequent assessment has not been appealed) has been met in that the 2015 Assessment has not been appealed. [ 51 ]

Section 227 clearly also contemplates the partial application of an appeal decision because it uses the words “to the extent”. Implicit in this phrase is that there will be incongruences between the appeal decision and the subsequent assessment. The mere fact there is such an incongruency is therefore not determinative of applicability. Applicability must be assessed on a case-by-case basis. The

question is whether the appeal decision is sufficiently congruent in regard to the facts, condition and circumstances of the property and the assessment model so that the decision or significant aspects thereof can be said to relate to the subsequent assessment. [ 52 ] With this background, I turn to the arguments of City Centre. It submits the assessor erred by incorporating the effects of the 2014 BOR Decision in the 2015 Assessment, notwithstanding that the City had appealed that decision to the Committee. City Centre points out that the Act does not explicitly allow the City to apply a BOR decision in one year to the subsequent year. City Centre is correct in this. [ 53 ]

Section 211 deals with changes to the assessment roll as a result of a BOR decision. Clearly, this

section mandated a change in the 2014 Assessment to reflect the 2014 BOR Decision. However, its application is limited to the year of that assessment, not assessments for subsequent years. [ 54 ] Likewise, s. 270(2) is not authority for incorporation of the 2014 BOR Decision into the 2015 Assessment.

This is because by the wording “decision on appeal” refers to the decision for the year under appeal and not the subsequent year. [ 55 ] Additionally, s. 72 of The Municipal Board Act is not amenable for this purpose because it speaks to amendment of unconfirmed assessment rolls and tax rolls as a result of a Committee decision.

At the time the 2015 Assessment was prepared, the Committee had not yet heard the appeal of the 2014 BOR Decision and there was no decision to apply. [ 56 ] However, the absence of explicit statutory authority to incorporate the 2014 BOR Decision was not fatal to the preparation of the 2015 Assessment. The assessor, in arriving at the 2015 Assessment, was required to prepare it in accordance with s. 165 of the Act . In doing so, he or she had discretion in the fulfillment of the assessment principles outlined in s. 165.

Taking the 2014 BOR Decision into consideration in the preparation of the 2015 Assessment did not offend that section. The correction made by the BOR to the sales array for the capitalization calculation was a relevant factor which the assessor was entitled but not obliged to consider in the exercise of his or her discretion. [ 57 ] In short, the assessor did not need statutory authorization to reflect the 2014 BOR Decision in the 2015 Assessment.

The net result of the assessor exercising his discretion in that way was that, pending the appeal to the Committee of the 2014 BOR Decision, the 2014 and the 2015 Assessments were identical and the capitalization calculation inherent in both did not include 1800 Hamilton. Both Assessments had been confirmed by SAMA and thereafter were effectively locked, although taxes could be adjusted in accordance with appeal decisions. [ 58 ] To put things in perspective, immediately prior to the issuance of the 2014 Committee Decision , the 2014 Assessment and the 2015 Assessment were identical.

The taxes for 2015 were the same as for 2014. When the 2014 Committee Decision was issued, the City was required by s. 270(2) to adjust the 2014 taxes accordingly. As noted above, however, this

section applied to the assessment and taxes for the year under appeal and could not be used for 2015. [ 59 ] Under those circumstances the City or the assessor was entitled to consider using s. 227 to apply the 2014 Committee Decision to the 2015 Assessment. The City proceeded to amend the tax roll and recalculate the taxes for 2015 pursuant to s. 227 and s. 270 of the Act . [ 60 ] I am satisfied the appeal decision related to the 2015 Assessment within the meaning of s. 227 for a number of reasons. Both the 2014 and 2015 Assessments had been confirmed and were identical.

Both were the product of a capitalization calculation that did not include 1800 Hamilton. The 2014 Committee Decision dealt with the only issue in play common to both assessments: the inclusion of 1800 Hamilton in the capitalization calculation. The 2014 Committee Decision relates to the 2015 Assessment because it determines that issue. [ 61 ] It also relates because the facts, conditions and circumstances of the property for both years remained the same.

It is not disputed by City Centre that, but for the inclusion of 1800 Hamilton in the capitalization rate calculations, the physical and other “facts, conditions and circumstances” ( s. 165(3.1) ) of the Property (i.e., the land and improvements as explained above) were unchanged. [ 62 ] City Centre argues the assessment model used for 2014 and 2015 differed.

However, it accepts in its factum that all office buildings downtown, including the Property, were assessed for 2014 using the income model and also accepts that the 2015 Assessment was the product of the use of the income model, albeit with a different capitalization rate. City Centre surprisingly submits that the assessment model used for the 2015 Assessment changed because the capitalization calculation did not include 1800 Hamilton as did the Original 2014 Assessment before amendment by the BOR.

There is no merit to this argument. [ 63 ] The confirmed Assessments for both years were the product of identical capitalization calculations. Moreover, the initial difference in the capitalization rate that produced the Original 2014 Assessment and the 2015 Assessment is not a difference in the assessment model. Both years’ Assessments were arrived at using the income model or approach. [ 64 ] However, City Centre argues that s. 165(3.2) prevented the application of the 2014 Committee Decision to the 2015 tax roll because that decision had been appealed to this Court. As explained above, this sub

section concerns the preparation of assessments and not changes to the tax roll. This

section requires the assessor to reflect unappealed Committee decisions in the preparation of assessments but also requires the assessor not to incorporate a Committee decision in his or her assessments where an appeal is pending to this Court. Moreover, it could not have had any application in this case because the 2015 Assessment had already been prepared and had been confirmed well before any decision of the Committee that could have been appealed to this Court. [ 65 ]

Section 227 is designed to facilitate the application of a decision on an issue or issues common to assessments respecting the same property in successive years. That is what happened here. Given that the facts, conditions and circumstances of the property and the assessment model for the two years was the same and the common issue was the inclusion of 1800 Hamilton in the capitalization rate

calculation, s. 227 was appropriately invoked. [ 66 ] I conclude that s. 227 could be used by the City to apply the 2014 Committee Decision to the 2015 Assessment and adjust the taxes accordingly. That said, in view of City Centre 2018 , it is obvious that a further adjustment must be made to the taxes to reflect that determination. [ 67 ] The remaining argument is City Centre’s assertion that it is deprived of its right of appeal by the use of s. 227 . I disagree.

As a first point, the application of the 2014 Committee Decision to the 2015 Assessment pursuant to s. 227 came long after City Centre’s right to appeal had expired. That application therefore had nothing to do with City Centre’s inability to appeal. Likewise, neither did the preparation of the 2015 Assessment to accord with the 2014 BOR Decision. City Centre is the author of its own misfortune. It knew that the 2015 Assessment had incorporated the 2014 BOR Decision. It was aware five months before the 2015 Assessment was prepared that the 2014 BOR Decision was being appealed by the City.

It should have been aware there was the possibility that the Committee might allow the appeal. [ 68 ] Admittedly, City Centre was getting the benefits of the 2014 BOR Decision in the 2015 Assessment and there was no need to appeal that Assessment at that time. However, nothing prevented City Centre from bringing a protective appeal for the 2015 Assessment.

This is exactly what the property owner did in Strand Theatre Ltd. v Prince Albert (City), [2005] SMBAACD No 11 (QL) [ Strand Theatre ]. [ 69 ] In a variation of its argument that it has lost its right of appeal, City Centre submits that having appealed the 2014 Assessment and having the 2014 Committee Decision applied to the 2015 Assessment it pays higher taxes. It submits that would offend the requirement found in ss. 165(1) and (3) for equity to be the dominant and controlling factor in assessments. This argument as well has no merit.

As was observed in Prince Albert (City) v Prince Albert Co-op Association Ltd. , 2017 SKCA 53 : [26] … Not all assessments will be consistent in every year. This is so because not all taxpayers appeal their assessments. Those who do appeal have their assessments adjusted in accordance with the appeal decision. Those decisions, however, are not given universal application to all properties in the same category. Any differential in assessments therefore arises not because of the application of s. 227 but because of a failure to appeal in 2015 as discussed above. [ 70 ] In conclusion, this ground of appeal fails. B.

Did the Committee err when it found the assessor could apply s. 227(1) of the Act without the agreement of the parties or a ruling by the Committee? [ 71 ] City Centre argues ss. 227(1) and (2) read together do not allow the City to unilaterally apply an appeal decision to a subsequent year’s assessment.

It submits the parties must agree on whether and the extent to which it applies or the Committee must rule on those questions. [ 72 ] The City submits an assessor is entitled to determine if an appeal decision applies to a subsequent assessment and there is no requirement in the Act for the City to obtain an agreement from property owners or a ruling from the Committee before setting an assessed value for a property which reflects that decision.

The City notes that s. 227(2) does not say “must apply” but says “may apply”. [ 73 ] The Committee interpreted its decisions in Gordstone Enterprises Ltd. v Regina (City) , [2004] SMBAACD No 19 (QL) [ Gordstone ], and Strand Theatre , and concluded that neither the consent of the taxpayer nor direction from the Committee was required to invoke s. 227 ( 2017 Committee Decision at paras 35–40).

The Committee found that if the parties could not agree that s. 227 applied, whoever took the position that it should not apply was to be the applicant for a ruling. [ 74 ] The Committee in this case summarized its previous rulings on the issue of the

interpretation of s. 227 as follows: [38] The Applicant also uses 2005 SMBAACD No. 11 [ Strand Theatre ] as further support for the position that an agreement is required before

section 227 can apply. The City disagrees and so do we. [39] Strand Theatre does not say property owners must give permission before

section 227 can apply- the decision states: The Act states that any party to the appeal may make an application to the Committee for a ruling on whether the decision should apply to subsequent years. The parties to this appeal have obviously not come to any agreement to carry forward the decision from 2003 to 2004. In this case the Committee finds it is the assessor who must make the application as it is the appellant who is not in agreement on carrying the decision forward ( Strand Theatre, para 28). [40] The Committee’s finding in Strand Theatre means whoever has the position

section 227 should not apply is the applicant. We find in the current case, the property owner is the Applicant because their position is

section 227 should not apply. [ 75 ] The City points out that neither s. 270 of the Act relating to adjustment of the taxes to reflect appeal decisions nor s. 72 of The Municipal Board Act , which requires the assessor to amend unconfirmed assessment rolls and property tax rolls to reflect decisions of the Committee, require SAMA or the City to obtain a property owner’s consent before doing so. [ 76 ] I am satisfied that s. 227(2) of the Act does not condition the application of an appeal decision.

I will explain. [ 77 ] The text of s. 227(1) states unambiguously that an appeal decision applies insofar as it relates to the subsequent year’s assessment. It does not speak of agreement. If it did, the Legislature would have added words to the effect of “subject to subsection 2”. Similar provisions allow the assessor or the City to rely on appeal or tribunal decisions to adjust assessments or taxes as part of the assessment process without the consent of the taxpayer. Admittedly, those provisions do not have an analog to s. 227(2) . However, it

would be unusual for the Legislature to condition what I have found to be an aid in the assessment process by imposing a requirement of agreement by the taxpayer. What then is to be made of s. 227(2) ? [ 78 ] In my view s. 227(2) and the words referring to agreement provide a process to challenge the application of the appeal decision to the subsequent year’s assessment. Its purpose is a narrow one. I say this because s. 227 cannot be invoked to apply an appeal decision if there is already an appeal with respect to the subsequent year’s assessment. This was made clear in South Hill (at paras 28–29 ). If the

section can only be used where there is no appeal, then s. 227(2) comes into focus as a method of giving the parties something akin to a review of whether the

section has been properly applied rather than as a provision which imposes a requirement of prior agreement. In that sense, although it does not purport to be a right of appeal of an assessment to the Committee, it is effectively that. [ 79 ] City Centre argues the City will invoke s. 227 only if it is to its benefit and contrary to the views of the taxpayer. It submits the taxpayer will therefore always have to make the application to the Committee. City Centre argues that such an

interpretation flies in the face of s. 227(2), which implies there must be situations where the City may apply. I disagree that it will always be the taxpayer who applies. [ 80 ] If the City refuses to apply an appeal decision that the taxpayer believes should be applied, the taxpayer can notify the City that it disagrees with the City’s refusal. I agree with the Committee that whoever is not in agreement with the appeal decision being carried forward must apply for a determination under s. 227 ( 2017 Committee Decision at para 39).

In the case of a refusal by the City, the City would be required to apply. [ 81 ] This ground of appeal fails. C. Did the Committee err when it found the assessor could apply s. 227(1) on an interim basis while the Committee’s 2014 decision was still before the courts? [ 82 ] City Centre submits that neither s. 270 nor s. 227 allow the adjustment of taxes on an interim basis before all appeals on an assessment are concluded. It points out that s. 165(3.2) prohibits the assessor from applying a Committee decision to subsequent assessments while the decision is under appeal to the Court of Appeal.

It argues requiring adjustment of taxes at every level of appeal with cheques going back and forth and potential penalties for payment of taxes that may not actually be due is illogical. [ 83 ] The City submits that it is not required to wait until all appeals are exhausted before taxes are adjusted. It argues taxes can be adjusted at every step of the process in accordance with the last appeal decision. [ 84 ] The Committee determined that s. 270(2) applied at each level of appeal. It concluded that an

interpretation of s. 270 as referring only to adjustment after the final level of appeal would interfere with the City’s ability to assess property and collect taxes and result in the undue delay of the collection of taxes ( 2017 Committee Decision at paras 32–34). [ 85 ] I am satisfied that the assessment provisions of the Act looked at as a whole, and particularly s. 227 and s. 270 , require adjustments to taxes to be made while appeals are ongoing.

If taxes could not be adjusted on an interim basis, this would effectively stay the decisions of a BOR or the Committee while the next level of appeal is being pursued. The Act does not explicitly provide for such a stay and most provisions of the Act express the contrary intention. [ 86 ] For example, the assessment roll must be modified in accordance with a BOR decision (s. 211) regardless of whether there is an appeal. Similarly, s. 226(5) states that the assessor shall make changes to an unconfirmed roll to reflect the decisions of the Committee.

Likewise, s. 72(2) of The Municipal Board Act makes it mandatory for SAMA and the City to amend unconfirmed assessment rolls and tax rolls respectively to reflect the decisions of the Committee. Likewise, s. 165(3.2) of the Act makes it mandatory that, in the preparation of assessments, the decisions of the Committee are reflected. [ 87 ] The language of the Act with respect to adjustment of the assessment roll , taken as a whole, suggests that adjustments must be made at each level of appeal.

It is therefore logical that the taxation resulting from an assessment must be adjusted by the impacts of any appeal decision pertaining to the assessment. [ 88 ] Section 270(2) provides authority to do that. Its wording throughout is mandatory. It is instructive to again set out the relevant portions of s. 270 : ( 2) If a decision on appeal would result in a change or alteration in the assessment of property on the roll if the roll had not been confirmed: (

a) the city shall adjust the taxes on the property in accordance with the appeal decision; and (

b) if: (

i) the appeal decision cancels or reduces the assessment on the property: (

A) the city shall refund all or part of the taxes paid in excess of those required to be paid as a result of the appeal decision; and (

B) the other taxing authority shall refund the city all or part of the taxes paid by the city on behalf of the other taxing authority in excess of those required to be paid as a result of the appeal decision; or (ii) the appeal decision confirms or increases the assessment on the property, the property is liable for and the city shall collect the amount of taxes that would be payable as if the original assessment were that set by the appeal decision.

(3) Any taxes and penalties required to be paid as a result of an appeal decision are recoverable pursuant to this Act and The Tax Enforcement Act .

[ 89 ] City Centre claims that the words “on appeal” referenced in s. 270(2) must be read as referring to only the final decision. In Corman Park , this Court explained that “on appeal” means decisions from the board, the Committee or this Court (at para 27). Section 270(2) requires adjustment in accordance with the “decision on appeal” which means the decision at each and every level of appeal. There is no exception in s. 270 for the last level of appeal as in s. 165(3.2).

Section 270(2) therefore mandates interim adjustments of the taxes owing even while the decision remains on appeal to this Court. [ 90 ] Additionally, City Centre’s argument makes no sense because it would effectively nullify s. 270(3) which allows for the enforcement of the taxes and penalties required to be paid as the result of an appeal decision. [ 91 ] In short, the property owner’s obligation to pay property tax in accordance with the last decision pertaining to the assessment is not stayed simply because the assessment is being appealed. [ 92 ] If s. 227 is applicable with respect to the following year, there is no reason why s. 270 would not operate to adjust the taxes for that following year in the same way as for the year under appeal.

The net result is that if the conditions of s. 227 are met, then the tax adjustment mandated for the prior year is applicable to the subsequent year. [ 93 ] Turning last to the submission that it is illogical that cheques for tax adjustments go back and forth, I cannot agree. In South Hill , Ryan-Froslie J.A. specifically recognized the effect of s. 270 when she wrote: [22]

Section 270 of the Act sets out the effect an appeal decision has on assessments. Pursuant to s. 270(1), if the assessment roll is confirmed before an appeal has been disposed of “no amendment or alteration to the roll may be made except as provided for in

section 178 or 179.” (Those sections have no application to the case under appeal.) However, the City must adjust the taxes in accordance with an appeal decision and refund or collect taxes as the case may be in accordance with that decision.

Where the assessment roll has not been confirmed, the assessment is to be adjusted in accordance with the appeal decision (s. 270(2)). … [24] It is clear from the process set out in the Act that property owners have an annual right of appeal and that decisions resulting from such appeals will affect the assessment of that property for the year under appeal. (Emphasis in original) VI. Conclusion [ 94 ] The appeal of City Centre is dismissed with costs to the City. “Ottenbreit J.A.” Ottenbreit J.A. I concur. “Caldwell J.A.” Caldwell J.A. I concur. “Ottenbreit J.A.” For Whitmore J.A.