Boardwalk REIT Properties Holdings Ltd. Appellant v. City of Regina and Saskatchewan, 2022 SKCA 128

Court of Appeal for Saskatchewan Docket: CACV3695 Citation: Boardwalk REIT Properties Holdings Ltd. v Regina (City) , 2022 SKCA 128 Date: 2022-11-04 Between: Boardwalk REIT Properties Holdings Ltd. Appellant And City of Regina and Saskatchewan Assessment Management Agency Respondents Before: Caldwell, Whitmore and Leurer JJ.A.

Disposition: Appeal allowed; matter remitted Written reasons by: The Court On appeal from: 2020 SKMB 36 Appeal heard: April 13, 2022 Counsel: Leonard Andrychuk, K.C. and Allison Graham for the Appellant Jayne Krueger for the City of Regina The Court [ 1 ] Boardwalk REIT Properties Holdings Ltd. [Boardwalk] appeals against the decision of the Saskatchewan Municipal Board Assessment Appeals Committee [Committee] in Various (Altus) v Regina (City) , 2020 SKMB 36 [ Committee Decision ], which upheld the decision of the board of revision for the City of Regina [Regina BOR] in Altus Group Limited v Regina (City) (6 May 2019) [ BOR Decision ]. [ 2 ] Boardwalk received leave to appeal to this Court from the Committee Decision on the following questions: (

a) Did the Committee err in law and/or principle by applying the wrong standard of review to the question of whether the Board committed a reviewable error in finding that it had no authority to order disclosure and production pursuant to s. 203.1 of The Cities Act ? (

b) Did the Committee err in law by affirming the Board’s finding that it had no authority to order disclosure and production pursuant to s. 203.1 of The Cities Act ? (

c) Did the Committee err in law by affirming the Board’s refusal to allow Boardwalk to advance its appeal in relation to 4-unit suite apartments because it: (

i) improperly failed to consider the extent to which Boardwalk had complied in substance with the requirements of The Cities Act ; (ii) improperly failed to consider the extent, if any, to which the City would be prejudice[d] if Boardwalk was entitled to advance its appeal in relation to unit suite apartments; (iii) improperly failed to consider the impact of the Board’s decision on Boardwalk’s ability to pursue its appeal. [ 3 ] The appeal raises issues under The Cities Act , SS 2002, c C-11.1 , regarding (

i) the authority of boards of revision to compel the production of evidence, (ii) limitations on arguments that appellants are permitted to bring before boards of revision; and (iii) the standard of review to be applied by the Committee on questions of procedural fairness and statutory

interpretation. [ 4 ] As background to this appeal, the assessor [Assessor] for the City of Regina [City] estimated the market value of 33 commercial properties in 2019 under the multi-family residential model [Model], including several that are owned by Boardwalk.

The subject property is a 64-unit, multi-residential property comprised of one- and two-bedroom suites. 2019 is the third year of a four-year assessment cycle in which the Assessor has used the Model and the relevant sales data [Sales Data] in each year to estimate the market value of the subject property. [ 5 ] In its appeal against the 2019 assessment of the subject property, Boardwalk alleged that: [A] The Assessor erred in the determination of the Sales GIM [i.e., Gross Income Multiplier] stratification by failing to properly account for an under-valued group (Unit Count) thereby over-stating the GIM for the subject and similar properties resulting in an excessive assessment that fails to achieve the market valuation standard. [B] If the Assessor holds the same position that he took in 2017 regarding the Median-Samples Test, then the Assessor erred by including separate stratification for Study Area 2650 resulting in an inflated Base GIM resulting in an excessive assessment for the subject that fails to achieve the market valuation standard. [C] The Assessor erred by refusing to provide information necessary for a complete review of the subject assessment.

Information that directly relates to the market valuation standard principle that the assessed value of the property is prepared using mass appraisal. Mass appraisal includes statistical testing and the process of preparing assessments that the Assessor relied upon in the determination of the market model and the assessed value for the subject. [ 6 ] In its notice of appeal, Boardwalk identified the following facts as supporting the existence of the alleged errors:

• Small sized properties trade in a distinct market as compared to larger properties.

There is a greater competition as small-unit properties are more readily affordable to a large pool of investors and require less risk to rent or lease. • The Assessor in 2017 argued that the median samples test precluded the use of a group of sale properties to be stratified separately when S.A. [i.e., Study Area] 2650 fails this requirement resulting in an inconsistent consideration of the facts. • Information requests/inquiries were submitted to the Assessor on Nov. 9th whereby receipt and reply from the Assessor on Nov. 13/18 indicated no such information will be provided.

Further correspondence occurred Nov. 27th and 29th. • The City of Regina Assessor uses backwards multiple regression processes in the creation and application of the modelled assessment values. • The Cities Act pursuant to subsection 163 (f.3) states: “mass appraisal” means the process of preparing assessments for a group of properties as of the base date using standard appraisal methods, applying common data and allowing for statistical testing. The process relied upon is multiple regression which the Assessor has refused to provide any of the

summary statistics that illustrate whether the Assessor’s choices are justified by the market evidence. • Mass appraisal as required by The Cities Act demonstrate[s] the model stratifications are over-valuing the subject while undervaluing other properties. [ 7 ] In advance of the hearing before the Regina BOR, Boardwalk sought to obtain the results of the Assessor’s statistical testing of the Model with the Sales Data [Information] but the Assessor did not disclose that information.

At the commencement of the hearing, Boardwalk asked the Regina BOR to issue a subpoena under s. 203.1 of The Cities Act compelling the Assessor to produce the Information.

Also, as a preliminary matter, the City asked the Regina BOR to prohibit Boardwalk from advancing an argument about the overvaluation of 4-unit properties because it said that that issue had not been raised in the notice of appeal. [ 8 ] In its decision, the Regina BOR found that it lacked the authority to compel the Assessor to disclose the Information and held that Boardwalk could not advance its argument that 4-unit properties had been overvalued.

Notably, the Regina BOR’s procedural rulings led Boardwalk to abdicate from orally advancing its substantive arguments of errors in the 2019 assessment of the subject property. The Committee described the circumstances in these terms in the Committee Decision : [8] We shall address each of these arguments [in the appeal to the Committee] in turn. However, we do wish to comment on the position adopted by the property owner’s agent (not Leonard Andrychuk, Q.C.) before the Board.

As a result of the rulings of the Board on disclosure, the agent indicated he would not provide further argument or information other than what was contained in his written submission. He did not cross-examine the Assessor on his evidence, nor did he take the Board through the Appellants’ complex written submission. The Board is entitled to assistance from the parties. The Assessor’s testimony with respect to the methodology he used in arriving at the assessed value stands undisputed.

The Appellants’ choice not to cross-examine the Assessor was the agent’s to make and was done after consultation with his colleagues. In terms of result, the Regina BOR dismissed Boardwalk’s appeal because it had failed to establish error in the 2019 assessment of the subject property. [ 9 ] When Boardwalk appealed from the BOR Decision , it argued that the Regina BOR had erred in four ways that the Committee addressed as follows: (

a) Boardwalk said that the Regina BOR had erroneously found that it had no jurisdiction to order the Assessor to disclose the Information. The Committee held that, because the Regina BOR had examined the jurisprudence and considered The Cities Act , it “was clearly alive to the issue placed before it” and that “the Board’s determination on this point, based on the evidence and arguments before it, was reasonable” ( Committee Decision at paras 20-21). (

b) Boardwalk alleged that the Regina BOR had failed to provide sufficient reasons for dismissing its appeal. The Committee rejected this argument. Having found that Regina BOR had not erred under ground (a), the Committee concluded there was no error under this ground (

b) because the Regina BOR had dismissed the appeal on the basis that “Appellant had not provided sufficient evidence to support the claim of Assessor error” (at para 25). (

c) Boardwalk argued that the Regina BOR had ignored relevant evidence. The Committee observed that the Assessor and a witness for the City had testified that the Model produced a lower effective Gross Income Multiplier [EGIM] for 4-unit properties and a higher EGIM for greater-unit properties. It pointed out that Boardwalk had declined to cross-examine these witnesses. To the Committee, this meant that their testimony was unchallenged as well as being contrary to Boardwalk’s assertions.

Regardless, the Committee noted that demonstrating an alternative way of stratifying properties is “not evidence in and of itself of error” (at para 28). The Committee therefore agreed that Boardwalk had “failed to demonstrate error” (at para 29). (

d) Lastly, Boardwalk asserted that the Regina BOR had failed to fulfil its duty of fairness because it had prohibited Boardwalk from advancing its argument based on the idea that the Model overvalued 4-unit properties. The Committee remarked that Boardwalk had “made no oral argument, nor presented any oral evidence with respect to this ground of appeal” (at para 31).

Substantively, however, the Committee agreed with the Regina BOR’s conclusion that Boardwalk had tried to raise a new ground of appeal, observing that the notice of appeal alleged that smaller properties traded in different marketplaces not that they were overvalued. [ 10 ] This Court has recently answered the first two questions of law for which Boardwalk has been granted leave to appeal.

In SBLP Southland Mall Inc. v Regina (City) , 2022 SKCA 115 [ Southland 2022 ], this Court interpreted The Cities Act , including s. 203.1 , as conferring upon boards of revision the authority to compel parties to produce evidence at appeal hearings in accordance with the parties’ obligations under s. 200 of that Act . In that decision, this Court held that boards have a general duty to ensure that the hearings of assessment appeals are conducted in a procedurally fair manner.

Lastly, this Court affirmed in Southland 2022 that the Committee must review on the standard of correctness all questions as to whether a hearing before a board of revision was fair. Furthermore, this Court in Affinity Holdings Ltd. v Shaunavon (Town) , 2022 SKCA 83 [ Affinity ] at paras 118–121 , directed the Committee to review questions of

law, including as to the

interpretation of municipal legislation such as The Cities Act , on the standard of correctness. [ 11 ] Based on the reasoning in Southland 2022 and Affinity , we answer to the first two questions raised in this appeal by finding that the Committee erred in law when it: (

a) applied the reasonableness standard of review to the question of whether the Regina BOR had erred when it found that it had no authority to order disclosure and production pursuant to s. 203.1 of The Cities Act ; and (

b) affirmed the Regina BOR’s conclusion that it had no authority to order disclosure and production pursuant to s. 203.1 of The Cities Act . [ 12 ] At bottom of the third question raised in this appeal is a general issue about whether specific arguments are impermissible in hearings before boards of revision. We infer that the Committee correctly concluded that an appellant may advance arguments that tend to establish the errors or the factual circumstances that are alleged in appellant’s notice of appeal to the board of revision or that tend to dispel the existence of facts relied upon by the assessor.

We further observe that a question about whether a particular argument tends to do this is a question of mixed fact and law and, therefore, a board of revision’s determination in that regard would be reviewable by the Committee for its reasonableness ( Affinity at paras 126-127 ). [ 13 ] However, the Regina BOR’s erroneous

interpretation of its authority to order disclosure and production under The Cities Act means that relevant evidence may have been improperly omitted from the record before it.

Since a notice of appeal may be amended following the disclosure of evidence by assessors and respondents ( The Cities Act , s. 209 ; Affinity at para 67 ), the Regina BOR’s misinterpretation of its statutory authority to order disclosure of the Information may also have affected the breadth of the arguments that were permissible in the appeal hearing. [ 14 ] In short, we find that our conclusions on the first two questions mean that we are no longer in a position to address the third question for which Boardwalk has been granted leave to appeal.

However, as the Committee remarked, it has before it the full record of the board of revision proceedings ( The Cities Act , s. 220 ). It also has the authority to supplement that record in the circumstances described in s. 223. In our view, The Cities Act allows the Committee to directly address whether the Assessor should be compelled to disclose the Information, to issue a subpoena, if necessary, as well as to decide whether, when the issue is considered in the proper context, Boardwalk’s argument about 4-unit properties tends to establish an error or factual circumstance alleged in its notice of appeal.

That is, the Committee must conduct a de novo review of the 2019 assessment. [ 15 ] For these reasons, the appeal is allowed, the Committee Decision is set aside, and the matter is remitted to the Committee for reconsideration. We make no order as to costs. “Caldwell J.A.” Caldwell J.A. “Whitmore J.A.” Whitmore J.A. “Leurer J.A.” Leurer J.A.