Consumers Co-operative Refineries Limited c/o Federated Co-operatives Limited (SK) Appellant (Appellant) v. City of Regina, 2023 SKCA 133

Court of Appeal for Saskatchewan Docket: CACV3845 Citation: Consumers Co-operative Refineries Limited v Regina (City) , 2023 SKCA 133 Date: 2023-12-08 Between: Consumers Co-operative Refineries Limited c/o Federated Co-operatives Limited (SK) Appellant (Appellant) And City of Regina Respondent (Respondent) Before: Leurer C.J.S., Barrington-Foote and Tholl JJ.A. Disposition: Appeal allowed Written reasons by: The Honourable Chief Justice Leurer In concurrence: The Honourable Mr. Justice Barrington-Foote The Honourable Mr.

Justice Tholl On appeal from: 2021 SKMB 23 , Regina Appeal heard: May 18, 2023 Counsel: Leonard Andrychuk, K.C. and Allison Graham for the Appellant Steven Dribnenki for the Respondent Leurer C.J.S. I. INTRODUCTION [ 1 ] Consumers Co-operative Refineries Limited c/o Federated Co-operatives Limited (SK) [CCRL] is the owner of a refinery complex located in Regina. It is dissatisfied with the municipal tax assessment for this property for 2020. [ 2 ] CCRL first appealed the 2020 tax assessment to the Regina Board of Revision [Board].

It was substantially unsuccessful in that appeal: Consumer’s Co-operative Refineries Limited v Regina (City) (31 July 2020) Regina, Appeal No 2020-28790 (Regina Board of Revision) [ Board Decision ]. [ 3 ] Unhappy with this result, CCRL took the matter to the Assessment Appeals Committee of the Saskatchewan Municipal Board [Committee]. That appeal was also dismissed: Consumers Co-operative Refineries Limited v Regina (City) , 2021 SKMB 23 [ Committee Decision ]. [ 4 ] CCRL has been granted leave to appeal against the Committee Decision to this Court on two questions of law.

At their root, both reduce to a consideration of whether the Committee fulfilled its mandate in its review of the Board Decision . I have concluded that the Committee erred by failing to consider the arguments made to it by CCRL, which resulted in a failure to determine whether the Board had erred in its identification and

interpretation of the governing assessment law and practice. For these reasons, the Committee Decision must be set aside, and the matter must be remitted to the Committee. II. BACKGROUND A. CCRL’s concern with the assessment [ 5 ] The focus of CCRL’s concern about its tax bill is with the assessed value of the land on which the refinery is situated. It sits on 550.23 acres, which is very large relative to other parcels located in the city. CCRL’s overarching concern is that the assessor inadequately accounted for the extraordinary size of this parcel in the determination of the land’s assessed value.

In short, CCRL says that the law of diminishing returns, or economies of scale, means that when measured on a per unit of area basis, its land is worth less than the assessor calculated it to be. [ 6 ] The refinery land is zoned as heavy industrial and is categorized as non-primary industrial land. The Saskatchewan Assessment Manual (2015 Base Year) (Regina: Saskatchewan Assessment Management Agency, 2015) [ Manual ], adopted by the Saskatchewan Assessment Management Agency [SAMA] directs that the “assessed value for non-primary industrial land shall be determined using the market valuation standard”.

In this case, the assessor used the sales comparison approach to valuation. This approach involves a comparison of the property being appraised with similar properties that have recently sold, with appropriate adjustments to account for any relevant differences between the sold properties and the subject property. [ 7 ] The assessor purported to follow SAMA’s 2015 Cost Guide , ver 1.2 (Regina: Saskatchewan Assessment Management Agency, 2015) [ Cost Guide ], to assess the land.

As I will explain, the assessment calculation involved many variables, including a “base land rate”, a “standard parcel size” and “land size multiplier”, sometimes abbreviated as BLR, SPS and LSM . These acronyms are used in some of the documents that are quoted in this judgment. [ 8 ] Before the Board, the assessor explained that “the base land rate is the expected sale price per unit of comparison that a

standard size parcel would be expected to achieve in the marketplace”. The land size multiplier is used to account for the difference in area between the standard parcel size and the land in question. A key issue in the appeals to the Board and the Committee was whether the assessor erred in the way that these three variables were accounted for in the calculation of the assessed value. B. The Board Decision [ 9 ] CCRL argued to the Board that the assessor had erred in the determination of the base land rate, standard parcel size and land size multiplier.

The assessor admitted that there was an error in his calculation of the base land rate only, but not of the character alleged by CCRL, and suggested a slight revision to the assessed value of the land. [ 10 ] The Board held that it was “unable to find an error in the assessment, other than that identified by the Assessor that comes along with a recommendation for change”.

It further found that the assessor had “employed mass appraisal techniques, he [had] properly exercised his discretion in determining comparability, and applied the assessment to comparable properties throughout the relevant neighbourhoods” and, as such, “equity has been achieved” ( Board Decision at 6). I will review the Board Decision in more detail later in these reasons. In short, the result of it was a small revision to the assessment, but not of the magnitude sought by CCRL. C.

The Committee Decision [ 11 ] CCRL’s notice of appeal to the Committee and the submissions it made to the Committee largely amounted to an assertion that the Board had erred by failing to give effect to the arguments it had made to the Board. Several of its submissions were framed with reference to prior decisions by the Committee in other assessment appeals and prior decisions of this Court.

In this regard, in its written submission CCRL wrote that the Board “made further errors by ignoring relevant and consequential precedent by refusing to address rulings pertaining directly to the issues; those being the calculation of the base land rate, standard parcel size and land size multiplier”. [ 12 ] The Committee distilled CCRL’s grounds of appeal to it into six questions ( Committee Decision at para 8). The Committee found that one of the questions had not been raised before the Board by CCRL and, as such, that question was “not a proper ground” before it (at para 11).

It went on to analyze the five questions it found to be properly before it. I will have more to say about its consideration of several of these questions later in these reasons. Ultimately, the Committee found that “the Board did not make a mistake when it upheld the property valuation” (at para 9). III. ISSUES [ 13 ] CCRL has been granted leave to appeal on two questions of law: Consumers Co-operative Refineries Limited c/o Federated Co-operatives Limited (SK) v Regina (City), 2021 SKCA 166 [ Leave Decision ]. The Leave Decision restated these two questions as grounds of appeal, as follows (at para 69): (

a) The Committee erred in its

interpretation and application of the Cost Guide , a number of the Committee’s decisions, and this Court’s decisions in C onsumers Co-operative Refineries Limited v Regina (City) , 2020 SKCA 111 , and GMRI Canada Inc. v Saskatoon (City) , 2009 SKCA 145 , in relation to the determination of the Base Land Rate, Standard Parcel Size and Land Size Multiplier curve. (

b) The Committee erred in law or exceeded its jurisdiction by failing to consider or address [CCRL’s] arguments or by failing to consider relevant matters by misconstruing [CCRL’s] arguments or both. [ 14 ] I am satisfied that both grounds of appeal have merit. For this reason, the Committee Decision must be set aside, and the matter must be remitted to the Committee for consideration in accordance with the law. I will explain this conclusion by first discussing the way that the assessor accounted for the refinery’s land size.

I will then consider the arguments made by CCRL to the Board and the Committee and each body’s treatment of these submissions. Finally, I will describe why, although this Court is not positioned to express a definitive conclusion with respect to assessment principles applicable on these facts, it is evident that the Committee did not fulfil its mandate to interpret and apply the Cost Guide and relevant precedent. The Committee can therefore be said to have erred in the ways identified in the two grounds of appeal. IV. ANALYSIS A.

The assessment [ 15 ] As I have noted, the Manual directs that the assessed value for non-primary industrial land shall be determined using the market valuation standard and that the assessor did this by employing the sales comparison approach to valuation.

Section 163 (f.1) of The Cities Act , SS 2002, c C-11.1 [ Cities Act ], defines the market valuation standard as follows: “ market valuation standard ” means the standard achieved when the assessed value of property: (

i) is prepared using mass appraisal; (ii) is an estimate of the market value of the estate in fee simple in the property; (iii) reflects typical market conditions for similar properties; and (iv) meets quality assurance standards established by order of the agency[.]

[ 16 ] As described by Caldwell J.A. in an earlier case involving the same land, an assessment made using the sales comparison approach to valuation “is a principled approximation of what a property would sell for based on the actual sale prices of comparable properties adjusted for the specific characteristics of the subject property” ( Consumers Co-operative Refineries Limited v Regina (City) , 2020 SKCA 111 at para 12 [ CCRL 2020 ] .

This approach was further explained by t he International Association of Assessing Officers in its publication, Property Assessment Valuation , 3d ed (Kansas City: IAAO, 2010) at 69–70, as follows: Based on the concept of value in exchange, the sales comparison approach to value compares the property being appraised with similar properties that have recently sold. The characteristics of the sold properties are analyzed for their similarity to those of the subject of appraisal.

Because no two parcels are exactly alike, the prices of the sold properties must be adjusted for any differences between the sold properties and the subject property. Value indications derived from the sales comparison approach are usually considered particularly significant, because they express the reactions of buyers and sellers in the real estate market. The sales comparison approach can be used to value any property, whether improved or vacant, as long as that type of property is being exchanged periodically in the market.

The steps in the sales comparison approach are as follows: • Data collection and verification • Analysis of market data to develop units of comparison and select attributes for adjustment • Development of reasonable adjustments • Application of adjustments to comparable sales. … This passage was quoted with approval by this Court in Affinity Holdings Ltd. v Shaunavon (Town) , 2022 SKCA 83 at para 226 , 474 DLR (4th) 71 [ Affinity ]. [ 17 ] The starting point for the assessment calculation using the sales comparison approach is the determination of a base land rate .

This was explained by Caldwell J.A. in CCRL 2020 as follows: [12] … This approach requires an assessor to examine information about the properties that have sold in the neighbourhood of the subject property (or, where there are an insufficient number of such sales, in a comparable neighbourhood) and to calculate a price per unit of comparison (where a unit of comparison may be land area, land frontage, land unit, building unit or condominium unit). The price per unit of comparison is known as a base land rate or BLR.

For property used for industrial purposes, the unit of comparison is land area as measured in square feet or acres ( Cost Guide , s. 2.2). [ 18 ]

Section 2.2 of the Cost Guide , referred to in this passage, describes the valuation procedures for determining the base land rate of urban land using the sales comparison method or the allocation method. That provision states that “[w]here there are insufficient land sales in the neighbourhood to determine a reliable base land rate, the number of sales may be supplemented” by other sources including “sales from a comparable neighbourhood”.

It then states as follows with respect to the calculation of the base land rate: The base land rate by the sales comparison method may be determined by application of the following calculation procedure: 1. Identify land sales, which are representative of the typical parcel in the neighbourhood. 2. Determine the units of comparison. 3. Determine the sale price per unit of comparison for each land sale: i. Determine the land sale price. ii. Determine the number of units of comparison. iii. Calculate the sale price per unit of comparison by dividing the land sale price by the number of units of comparison. 4.

Calculate the base land rate for the neighbourhood by selecting the most probable sale price per unit of comparison. [ 19 ] The refinery is in Ross Industrial Park, the largest industrial area in Regina. The assessor used data from the sale of land in two different areas in the implementation of the sales comparison approach to value. One area was that in and around the refinery itself, an area described in the assessment documents as “Study Area 5203”. The sales in Study Area 5203 all involved parcels smaller than 39 acres. The second area was around the Global Transportation Hub, called “Study Area 5208”.

The inclusion of data from around the Global Transportation Hub allowed for an examination of the sales of properties of 40 acres and larger. [ 20 ] In this case, the assessor initially determined the base land rate using data from the sales of land in Study Area 5208. The assessor selected transactions that he determined to be close to what he also thought was the standard parcel size in that area.

The assessor identified the standard parcel size from his review of the land inventory in Study Area 5208 and, based on a graphical analysis, determined that the standard parcel size for that neighbourhood was 500,000 square feet (11.48 acres). One of CCRL’s points of criticism is that the assessor mixed up the assessment steps when he selected the land sales used to determine the base land rate. More pointedly, CCRL argues that the assessor was required to determine the base land rate from sales of typical parcels, not from the sales of parcels of a pre- determined standard size. [ 21 ]

Section 2.3 of the Cost Guide “contains the valuation procedures for determining site adjustments specific to individual land parcels”. Site adjustments are “used to account for variations in the value of individual land parcels that are attributable to characteristics

specific to the individual parcel”. Non-exhaustively, adjustments may be made for characteristics such as depth, irregular shape, corner influence, location and, central to this appeal, size. In this case, the assessor determined that it was appropriate to adjust the assessment to account for the extraordinary size of the refinery lands. [ 22 ]

Section 2.5 of the Cost Guide is applicable when land is to be valued on a square foot or acreage basis, and an assessor determines that “the sale price of a larger parcel in a neighbourhood is less per unit than the sale price of [a] smaller parcel”. In that case, the Cost Guide provides that “a land size multiplier is applied to land parcels that are other than the standard size parcel”. The remainder of s. 2.5 sets out a six-step calculation procedure, as follows: The standard size parcel may be a specific size or a size range.

Where there are sufficient land sales in an neighbourhood to establish a reliable land size multiplier, the size adjustments are determined by the sales comparison method. Where there are insufficient land sales in the neighbourhood, and there are sufficient land sales in a comparable neighbourhood to establish a reliable land size multiplier, the land size multiplier curve from the comparable neighbourhood is used. Sales Comparison Method Apply the following calculation procedure to determine the land size multiplier: 1.

Determine: • the standard size parcel for the neighbourhood, and; • the standard size parcel sale price per unit in accordance with No. 2.2 – Base Land Rate, Sales Comparison Method. 2. Calculate the sale price per unit for all comparable land sales in the neighbourhood. 3. Calculate a comparable sale price to standard sale price ratio for the land sales in the neighbourhood by dividing the sale price per unit for each land sale by the sale price per unit of the standard parcel. 4. Graph the comparable sale price to standard sale price ratio, ( v -axis) versus parcel size ( x -axis). 5.

Determine the Land Size Multiplier Curve that best fits the comparable sale price to standard sale price ratio, using the following formula with different values for u : Y = A u STD /u/A STD A u COMP /u/A STD where: Y = comparable sale price to standard sale price ratio for each land sale A STD = area of the standard parcel A COMP = area of the comparable land sales u = land size multiplier curve 6.

Determine the land size multiplier for the subject parcel using the formula: LSM = A u STD /u’/A STD A u SUB /u’/A SUB where: LSM = land size multiplier A STD = area of the standard parcel A SUB = area of the subject u’ = best fit land size multiplier curve [ 23 ] As noted earlier, CCRL has several complaints with how the assessor conducted this analysis. I will examine the treatment by the Board and the Committee of these arguments to explain why I have determined that this matter must be remitted to the Committee. B.

Use of overlapping data to calculate both the base land rate and the land size multiplier [ 24 ] One of CCRL’s complaints before the Board was that the assessor had used some of the same sales to calculate both the base land rate and the land size multiplier. As has been explained, the base land rate is intended to be a calculation of the price per unit of a typical parcel, while the land size multiplier is intended as an adjustment when the property being assessed has characteristics that are not typical.

In its five-day submission to the Board, CCRL referred to Various (Altus) v Moose Jaw (City) , 2020 SKMB 19 at para 27 [ Moose

Jaw ], in which the Committee stated, with reference to several of its other decisions, that “it would be an error to use the same sales to establish the BLR and also the LSM”. CCRL further argued as follows: … The SMB’s decision [in Moose Jaw ] makes logical sense because the BLR is calculated using typical parcels selling at consistent rates. The LSM accounts for atypical parcels which sell at lower per unit prices to account for diminishing returns. There is sound logical underscoring [ sic ] why the same sales cannot be used to calculate both the base land rate and land size multiplier.

In other words, CCRL said the sales comparison method of assessment requires the use of sales data and the sale of a single sold property cannot simultaneously involve both a typical and an atypical property. [ 25 ] This argument was not addressed at all in the Board Decision . Indeed, the Board did not discuss either Moose Jaw , or the principle it espouses. Instead, the Board identified two different decisions on different points, being Various (Altus) v Prince Albert (City) , 2019 SKMB 48 [ Prince Albert 2019 ] and GMRI Canada Inc. v Saskatoon (City) , 2009 SKCA 145 , [2010] 6 WWR 229 [ GMRI ].

Apart from referring to several other arguments made by CCRL, the Board simply concluded that the assessor had “employed mass appraisal techniques, he [had] properly exercised his discretion in determining comparability, and applied the assessment to comparable properties throughout the relevant neighbourhoods” and, as such, “equity has been achieved” ( Board Decision at 6). [ 26 ] CCRL appealed to the Committee on grounds that included that the Board “erred by misapplying or finding case law not relevant to the subject appeal” and that “BLR and LSM cannot over-lap pursuant to” Moose Jaw .

However, much like the Board before it, the Committee in its decision failed to directly address the issue of the use of overlapping data to calculate both the base land rate and the land size multiplier. [ 27 ] The Committee did ask itself, as one of the five questions it identified as requiring its answer, “Did the Board err by misapplying or finding case law submitted by [CCRL] not relevant to the subject appeal?”. However, in its analysis of this question, the Committee did not refer to Moose Jaw or any of the other decisions that make the same point as CCRL derives from that case.

To the contrary, the Committee stated that, before the Board, CCRL had “remarked on” Prince Albert 2019 and GMRI , when in point of fact, CCRL had referred to many other cases, including Moose Jaw and several other decisions of the Committee that I will mention later in these reasons.

This fact led CCRL to question in its argument in this Court if the Committee had read all of the submissions it had made to the Board. [ 28 ] While I am unable to conclude that the Committee did not read the record completely, I am satisfied about two things, based on my review of the Committee Decision and the submissions made to it. The first is that CCRL brought before the Committee its complaint about the Board’s failure to address its argument about the alleged impropriety of using the same sales to calculate both the base land rate and the land size multiplier.

The second is that CCRL’s submission to the Board on this point was not addressed in the Committee Decision . Based on these two observations, I am satisfied that the Committee erred in law in the way identified in the second ground of appeal as set out in the Leave Decision . For this reason alone, it is necessary to remit the question of the use of overlapping data to calculate both the base land rate and the land size multiplier to the Committee. C.

Deriving standard parcel size from inventory [ 29 ] Several of CCRL’s other arguments to the Board were based on the determination made by the assessor about the standard parcel size to be used in the assessment calculation. The assessor assessed the refinery land based on a standard parcel size of 500,000 square feet which was determined to be typical of the inventory of land in Study Area 5208. Before the Board, CCRL took the position that, for assessment purposes, the standard parcel size was much larger than this.

It maintained that data showed that the unit price of land was still increasing at sizes greater than 500,000 square feet. CCRL then made two related arguments to the Board as to why the assessor’s approach was in error. [ 30 ] CCRL’s position in this Court is that the Committee erred in its review of the Board Decision ’s treatment of these two submissions. As I will explain, CCRL’s argument on this point has merit. 1.

The Board’s consideration of arguments relating to standard parcel size [ 31 ] First, CCRL submitted that the market valuation standard required the use of sales data to determine standard parcel size . On this point, it referred to the following passages from Prince Albert 2019 : [50] The City then determined a SPS from the commercial land size inventory (importantly, not vacant property sales) within the neighbourhood each subject property is located.

The “inventory SPS” (i.e., the median parcel size for the land inventory in each neighbourhood) was then used along with the BLR and LSM curve determined from sales data in comparable neighbourhoods to calculate land assessed values for the subject properties. … [54] The City argued that

section 2.5 of the Cost Guide does not require the SPS to be calculated from sales data. We disagree for reasons that follow. [55] First,

section 2.5 (and

section 2.2) of the Cost Guide are describing a sales comparison method in determining land assessed values. Sales (emphasized above) is the key word and relates to the Act ’s requirement that assessments be representative of market value [see subsections 163(f.1)(ii) and (iii), the MVS]. [56] Last,

section 2.5 of the Cost Guide refers the user back to

section 2.2 in this way: Determine: the standard parcel sale price per unit in accordance with No. 2.2 – Base Land Rate, Sales Comparison Method”. In describing the sales comparison method, the Cost Guide consistently refers to land sales throughout, including Step No. 1: “ Identify land sales, which

are representative of the typical parcel in the neighbourhood. [57] We find that assessment practice in Saskatchewan, using the Sales Comparison Method, requires the SPS to be determined from sales data used to calculate the LSM curve. Both the LSM curve and SPS are representative of size adjustments, which is the adjustment the Cost Guide speaks to at

section 2.5. Whether or not the SPS and LSM curve are determined within a property’s neighbourhood, or the Assessor chooses a comparable neighbourhood, a relationship must be maintained for both size adjustments.

The market value system in Saskatchewan dictates related sales data be used in both determinations. (Emphasis added by CCRL) Based on this, CCRL argued in its written submission to the Board that the “Assessor’s determination of the BLR and SPS does not follow the process detailed in the Cost Guide or reflect case law”. [ 32 ] CCRL’s second argument was that, as a matter of principle, standard parcel size is the point, or size, at which the price per unit of land begins to decline.

In advancing this submission, it relied on several authorities, including North Prairie Developments Ltd. v Martensville (City) , 2019 SKMB 78 [ North Prairie ], which states in part as follows: [17] The SPS is the point at which values per square foot begin to decline as parcel size increases . This is evident from SAMA’s 2015 Cost Guide , Version 1.1 (Saskatchewan: Saskatchewan Assessment Management Agency, 2017) c 2 .5 at 1 [ Cost Guide ], which provides: When: (

a) land is valued on a square foot or acreage basis; and (

b) it is determined that the sale price of a larger parcel in a neighbourhood is less per unit than the sale price of smaller parcel; then a land size multiplier is applied to land parcels that are other than the standard size parcel. The standard size parcel may be a specific size or a size range. (Emphasis added) [ 33 ] Nowhere in its reasons did the Board address Prince Albert 2019 , North Prairie or GMRI .

It did not discuss at all the proposition that the standard parcel size must be linked to sales data or the proposition that it is, in principle, the point when the unit price of land begins to decline. [ 34 ] To the extent that the Board considered this submission, it was tied to its rejection of an argument made by CCRL that the assessor could use Study Area 5208 for the base land rate and standard parcel size and then use a land multiplier curve from another neighbourhood.

After pointing out that all the larger parcels in Study Area 5203 were assessed using data from Study Area 5208, the Board Decision continued as follows: … The Assessor’s analysis indicates that using principles of mass appraisal, an LSM curve should be applied after parcels reach a size of 500,000 square feet, as he has sales to establish that curve. In mass appraisal the Assessor looks to the curve of closest fit. It would be inaccurate to attempt to force a curve to “hit” the largest sale in a data set.

To apply a mixture and variety of models does not fit the terms of mass appraisal. [ 35 ] However, neither this passage, nor any other part of the Board Decision , grappled with the arguments that the market valuation standard required the use of sales data, and not inventory, to determine standard parcel size and that, as a matter of principle, standard parcel size must be set at the point at which the value of property begins to decline on a per unit of measurement basis. 2.

The Committee’s consideration of arguments relating to standard parcel size [ 36 ] Before the Committee, CCRL raised the Board’s failure to address all of its arguments relating to the choice of standard parcel size.

The Committee Decision might be read as addressing CCRL’s submissions on this point in the context of the Committee’s consideration of two of the five questions it identified as requiring its attention. [ 37 ] First, the Committee asked itself if the Board had erred “by finding the Assessor followed standard appraisal practice and the methodology/process outlined by the SAMA 2015 Cost Guide ?” In connection with this question, the Committee concluded that the Board’s decision “that the Assessor followed standard appraisal practice is reasonable and one which was available to the Board on the evidence before it” ( Committee Decision at para 19).

However, there were several issues before the Board, and I am not satisfied that this conclusion captured CCRL’s complaints with respect to the use of inventory, and not sales data, to determine standard parcel size or the question of whether standard parcel size must be tied to the point of diminishing returns. [ 38 ] CCRL’s complaint under this head relates to the alleged failure by the assessor to follow the direction given in the Cost Guide . As explained in the Preface to that document, the Cost Guide “provides direction for the valuation of property by the cost approach; it does not have the force of law”.

Nonetheless, as pointed out in Affinity , the principles set out in the Cost Guide amount to assessment practice: [82] Assessment practice refers to the principles of property assessment that do not have the status of being recognised as assessment law but nevertheless direct the practice of assessors in the preparation of assessments. This includes (without limitation) the directing principles set forth in: (

a) decisions of the Committee, other than those in respect of the property in question; (

b) decisions of boards of revision;

(

c) the Handbook; (

d) the Cost Guide and other SAMA Guidelines; (

e) publications of the International Association of Assessing Officers [IAAO], including Assessment Administration (Chicago: IAAO,2003), Property Assessment Valuation (Chicago: IAAO, 2010), Fundamentals of Mass Appraisal (Chicago: IAAO, 2011), and Glossaryfor Property Appraisal and Assessment (Chicago: IAAO, 1997); (

f) the Marshall & Swift Valuation Service (CoreLogic Inc.); and (

g) the Marshall & Swift Residential Cost Handbook (CoreLogic Inc.). [83] Questions of assessment practice are, therefore, those that involve the identification and

interpretation of the principles of propertyassessment that do not have the status of being assessment law but are nevertheless authoritative and govern the practice of assessors inthe preparation of the assessment in question. [39] In this case, CCRL’s argument was that the Cost Guide and the Committee’s own precedents required that standard parcel sizebe derived from sales, not inventory, and be tied to the point of diminishing returns. At its heart, CCRL’s submission was, therefore, thatthe assessor had failed to follow the required assessment practice.

As this Court has held, questions of “assessment practice are determinedby boards of revision on the standard of correctness” (Affinity at para 81, emphasis added). It is therefore difficult to accept that thegeneral statement to the effect that the assessor followed standard appraisal practice was “reasonable and one which was available to theBoard on the evidence” amounts to a consideration of this question (Committee Decision at para 19, emphasis added).

If this statementwas intended to be a consideration of this part of CCRL’s argument, it was a task that the Committee undertook by applying the wrongstandard of review. [40] I acknowledge that questions of “mixed fact and assessment practice are determined by boards of revision on the standard ofreasonableness” (Affinity at para 87). However, in this case, the Board was required to determine if assessment practice required thatstandard parcel size be derived from sales, not inventory, and be set at the point of diminishing returns.

Neither proposition raises aquestion of mixed fact and assessment practice that could be reviewed on the standard of reasonableness. [41] Likewise, a “question of law will arise where an appellant asserts that a board of revision has erred in its identification orinterpretation of the governing assessment law and practice” (Affinity at para 146).

The Committee is required to review questions of lawon the standard of correctness (per Affinity at para 145). [42] Brought into the specifics of this case, the Committee’s responsibility was to determine if the Board had correctly answered thequestion as to whether assessment practice required that standard parcel size be derived from sales, not inventory, and be fixed to the pointof diminishing returns.

In other words, if the Committee intended to address CCRL’s argument that the Board erred in consideration of theargument that standard parcel size must be derived from sales and not inventory, it did so by misapplying the standard of review applicableto its own review of the Board Decision.

In making this statement, I recognize that Affinity was decided after the Committee Decision wasrendered and therefore could not have been referred to or considered by the Committee. [43] The Committee came closer to addressing CCRL’s argument under this heading when discussing the question “Did the Boarderr by misapplying or finding case law submitted by [CCRL] not relevant to the subject appeal?”. It was in this context that the Committeeidentified that CCRL had “remarked on” Prince Albert 2019 and GMRI before the Board (Committee Decision at para 24).

TheCommittee then stated as follows: [24] We first note that based on the Appellant’s submission before the Board, it appears that Altus remarked on two cases. The firstwas Various (Altus) v Prince Albert (City), 2019 SKMB 48 [Prince Albert] (our decision for AAC 2017-0489 (Lead)) and thesecond was GMRI Canada Inc. v Saskatoon (City), 2009 SKCA 145 [GMRI]. [25] In Prince Albert, the facts differed from the present case. The Prince Albert Assessor had no sales in the subject NBHDs and useda comparable NBHD to establish the BLR and LSM.

The Assessor then looked to the median parcel size of the land inventory within thesubject NBHDs to decide on the SPS. The differing SPS amounts did not bear a relationship to the land sales used to derive the BLR andLSM, and contradicted the sales evidence (see Prince Albert at paragraph [51]). In the appeal currently before us, the City Assessor used acomparable NBHD and employed an SPS that is within the range of the sizes of the sales. The 500,000 square foot SPS is the point on thegraph of the seven sales that is also used to determine the LSM.

Therefore, there is a relationship between the sales and the BLR, SPS andLSM. The Prince Albert Assessor’s error has not been made by the Assessor in this appeal. We see no error in the Board’s decision on thispoint. [26] GMRI was not mentioned by the Board in its analysis, nor is it listed as one of the cases that the Board “misapplied or found notrelevant.” All assessment cases are factually specific and reliance on case law must be grounded in substantially the same factual matrix asthe case proffered as relevant or determinative of an issue.

In this instance, GMRI was decided under the previous fully regulatedassessment system. The subject property’s land assessment was derived under the current unregulated regime. It is our view that the Boardproperly considered the case law presented to it and did not misapply or ignore any relevant case law. [44] I would offer three observations about these paragraphs. [45] First, as I have already noted, the Committee was clearly in error when it in effect stated that CCRL’s agent, Altus, had onlyremarked on two cases.

CCRL had relied on many authorities in addition to the two that are mentioned in paragraph 24, not the leastsignificant of which in this context was North Prairie and the principle it appears to establish. Although a decision-maker need not refer toevery case cited by a party, a failure to refer to case law may signal a failure to address the issues before it that arise from that case law.

Ifind that to be so in this case. [46] Second, contrary to the implication of paragraph 25 of the Committee Decision, the statement in Prince Albert 2019 that“assessment practice in Saskatchewan, using the Sales Comparison Method, requires the SPS to be determined from sales data used to

calculate the LSM curve”, was not limited to the facts of that case. Likewise, in North Prairie the Committee stated as follows: [25] This passage reveals the Assessor’s reason for choosing an SPS of 66,646 was not based on sales evidence but instead on the Assessor’s view of what size was a “typical” size in that area as shown by a map. Failing to base the SPS and the LSM on sales evidence violates the MVS required by the legislation, which directs that assessments are an estimate of market value and reflect market conditions for similar properties.

Market value and market conditions are revealed by sales prices, not estimates of what values should be based on an Assessor believes is “typical” after looking at a map of lot sizes. Failing to rely on sales to determine market conditions also results in a violation of equity. In unregulated assessments, equity is achieved by applying the MVS so that the assessments bear a fair and just proportion to the market value of similar properties as of the applicable base date [s. 165(4) of the Act ].

See also Various (Altus) v Corman Park (Rural Municipality) , 2015 SKMB 14 at para 45 . [ 47 ] None of these authorities contemplate that it is sufficient that there simply be a “relationship between the sales and the BLR, SPS and LSM”, as the Committee Decision contemplates (at para 25). Respectfully, it was not enough for the Committee to simply conclude, as it did, that “[a]ll assessment cases are factually specific and reliance on case law must be grounded in substantially the same factual matrix as the case proffered as relevant or determinative of an issue” (at para 26).

As stated in the passage from paragraph 82 of Affinity , there are various sources of assessment practice. One of these sources are the decisions of the Committee that establish general principles. [ 48 ] Third, the distinction of GMRI offered by in paragraph 26 of the Committee Decision assists CCRL in this part of its argument, as it was one made in North Prairie itself.

As explained in North Prairie , in GMRI this “Court found the Committee had not erred by supporting the Assessor’s determination of an SPS with reference to the ‘typical parcel’ instead of with reference to the size at which prices start to drop” ( North Prairie at para 18 ). However, the Committee in North Prairie found that this Court’s conclusion on this point was not relevant because its “interpretation turned on the

interpretation of the Saskatchewan Assessment Manual, which governed regulated assessments (see paras [32] to [34])” ( North Prairie at para 18 ). [ 49 ] Considering all of this, I am satisfied that the Committee erred by failing to adequately consider the argument that came before it, that being the shortfalls in the Board’s consideration of the submissions made to it as to the selection of the standard parcel size.

For this additional reason, the matter must be remitted to the Committee. [ 50 ] As was the case in connection with CCRL’s complaint with the assessor’s use of overlapping sales data to calculate the base land rate, CCRL goes further in its submission. It argues that the assessor was required to determine the standard parcel size based on sales, not inventory, and that standard parcel size is the point of diminishing returns. I will address this submission in the next part of this judgment. D.

This Court should not determine what the assessment principles require in this case without having heard from the Committee [ 51 ] Both parties presented argument on the basis that a failure by the Committee to consider or address CCRL’s arguments or a failure to consider relevant matters by misconstruing CCRL’s arguments or both – which I have found to have occurred – amounts to an error of law or jurisdiction.

The conclusion that the two grounds of appeal have merit means that the issues must be remitted to the Committee for a determination in accordance with the law. [ 52 ] However, as I have already observed, CCRL invites this Court to go further and define the requirements of assessment law and practice on the facts of this case . More specifically, CCRL invites this Court to conclude, in answer to the questions that had come before the Board and Committee for determination, that, as a matter of assessment law or practice, (

a) it was impermissible for the assessor to have used overlapping data to determine both the base land rate and the land size multiplier, and (

b) the standard parcel size is the point at which the value of land on a per unit of measurement basis begins to decline as determined from sales data. As I will next explain, in my view, these issues should not be answered by this Court in this appeal. The reasons for this are tied to the respective roles of the Committee and this Court and the evolution in the law that occurred after the rendering of the Committee Decision and the grant of leave to appeal against it. [ 53 ] As I have noted, the Committee said it would answer five questions.

Before it proceeded to do this, it stated as follows about the standard of review it would apply to its consideration of these questions (at para 13): … we review the Board’s findings of fact, and of mixed fact and law on a reasonableness standard. If the findings of fact are supported by the evidence or are not otherwise unreasonable, this Committee will not interfere with the Board’s factual conclusions. [ 54 ] A review of the Committee Decision discloses that, in its consideration of at least four of the five questions it identified as being before it, the Committee applied a reasonableness standard.

In this regard, the Committee: (

a) determined that the “Board found no error in the methodology employed by the Assessor in determining the BLR, SPS and LSM” and stated that the “ decision of the Board that the Assessor followed standard appraisal practice is reasonable and one which was available to the Board on the evidence before it” (at para 19, emphasis added); (

b) found that the Board’s decision that the assessor’s exercise of discretion in determining comparable sales to establish the property’s valuation was “ reasonable based on the evidence before the Board” (at para 21, emphasis added); (

c) concluded that the “Board properly considered the case law presented to it and did not misapply or ignore any relevant case law” (at para 26); (

d) found that the “Board clearly explained its findings with respect to the comparable [neighbourhood] method and how the LSM curve was derived in this case” (at para 30); and

(

e) determined that the Board’s finding that equity had been achieved was a “ reasonable conclusion based on the record” (at para 32, emphasis added). [ 55 ] I am satisfied that, except for the third issue – that is (

c) above – the Committee applied the standard of reasonableness in its review of the Board Decision . As I have explained, in connection with the latter issue, the Committee erred in its determination that the Board had properly considered the case law presented to it. [ 56 ] In Affinity , which was decided after the grant of leave to appeal against the Committee Decision , this Court clarified the standard of review to be applied by boards of revision in their review of assessment decisions, and by the Committee in its review of decisions of boards of revision.

As I have explained, one part of the direction given in Affinity is that the Committee’s responsibility is to determine if the board of revision correctly answered the question as to what assessment law and practice required in the circumstances of the case before it. The Committee did not do so in this case. [ 57 ] This is significant in the context of this case where the requirements of assessment law and practice are contentious and are at the heart of all of CCRL’s arguments. Key parts of CCRL’s arguments against the assessment are tied to the direction given in the Cost Guide and in precedent.

Again, as I have already noted, the Cost Guide “provides direction for the valuation of property by the cost approach; it does not have the force of law”.

Nonetheless, as pointed out in Affinity , it and decisions of the Committee may amount to assessment practice that must be followed in the assessment procedure. [ 58 ] It bears emphasizing that while the Committee must follow its own precedents, Affinity makes the point that, much like that of a court, the Committee’s jurisprudence may evolve: [120] In addition, although administrative decision-makers are not usually bound by their own prior decisions ([ Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 , [2019] 4 SCR 653 ] at para 20), the nature of the assessment regime under the municipal Acts and the attendant process for appealing against those decisions (see [ E.Z.

Automotive Ltd. v Regina (City) , 2021 SKCA 109 , [2022] 4 WWR 55 ] and [ City Centre Equities Inc. v Regina (City) , 2018 SKCA 43 ) means that boards of revision must, in the absence of distinguishing features, have court-like regard for the consistency of their own decisions and the consistency of their decisions with decisions of the Committee. Whether a particular board decision is consistent with its own past decisions, or with those of the Committee, is a question of law. In this regard, the Committee may resolve issues of stare decisis and settle differences in the

interpretation of assessment law and practice arising as between the decisions of different boards of revision. [ 59 ] Moreover, CCRL has presented the directions given in the Cost Guide as if they compel a particular method of calculation. By way of example, it states in its factum that “Section 2.5 of the Cost Guide establishes both when a site adjustment for size must be applied, and how the Assessor must calculate that adjustment” (emphasis added).

However, the language used in the Cost Guide leave open the possibility of the existence of assessor discretion in relation to aspects of the assessment calculation. Nonetheless, as is the case in all areas of law, there are limits to any exercise of discretion. This point was made by this Court in Affinity , as follows: [104] This means that certain language relating to the scope of an assessor’s authority or discretion may support more than one

interpretation of it, while other language may support only one

interpretation. What matters to a board of revision is whether the exercise of discretion or the application of an assessment principle results from an internally coherent and rational chain of analysis and is justified in the light of the surrounding context , which is framed by the assessment field sheet and the written explanation of how the assessment was determined as well as the other evidence adduced in the appeal hearing. It will, of course, be impossible for an assessor (or a respondent) to justify a decision that has strayed beyond the limits set by the assessment law or practice that was applied .

For example, an assessor cannot ignore assessment principles and assess the value of a property based on an arbitrarily created and fictitious theory of assessment. Assessors must interpret assessment law and practice in a manner consistent with its text, context and purpose, applying the assessor’s expertise and experience with the institutional framework of the assessment scheme. An assessor cannot adopt, however, a plausible

interpretation they know to be inferior merely because it appears to be available and is expedient. Lastly, and it should go without saying, assessors must not reverse-engineer an assessment.

This means, as a general rule, that assessors (and respondents) cannot ex post facto preserve a decision rendered unreasonable by serious shortcomings in the assessor’s reasoning process through argument that the outcome or decision would have been reasonable if the assessor had applied different assessment law and practice . (Italicized emphasis in original, underlining added) [ 60 ] In this appeal, much of what the City of Regina argued was rooted in the existence of assessor discretion. However, the issue is not so much whether the assessor had discretion.

Rather, it is whether that discretion was circumscribed in some way by assessment practice as it is defined by the Cost Guide and precedent. The core problem that I see in the Committee Decision is that it failed to grapple with this in the context of the determination of the base land rate, the standard parcel size and, ultimately, the land size multiplier.

Simply put, the Committee did not address, in a meaningful way, the key provisions of the Cost Guide that bore on the issues argued before it by CCRL nor did it wrestle with the key decisions that have interpreted these provisions except through the misfocused application of the incorrect standard of review. [ 61 ] Ultimately, CCRL’s suggestion that this Court should answer the questions as to the requirements of assessment practice in this case amounts to an invitation that this Court determine the boundaries of assessor discretion without having the decision of the Committee on that very point.

This would be contrary to this Court’s role in the assessment regime. [ 62 ] In SBLP Town N Country Mall Inc. v Moose Jaw (City), 2022 SKCA 10 , 465 DLR (4th) 675, Richards C.J.S. reviewed the respective roles of boards of revision, the Committee and this Court in the assessment regime. He stated that “there can be little doubt that the Legislature envisioned an assessment appeal system where the Committee, not the Court, is the appellate workhorse”. This Court’s role is “supervisory in nature and limited to only one dimension – the legal and jurisdictional one – of the Committee’s decision-making” (at para 25).

It is consistent with this that, at least on the facts of this case, with the benefit of the guidance provided in Affinity and these reasons, the Committee be afforded the opportunity to determine the requirements of assessment law and practice before this Court is asked to weigh in with respect to the more limited question of whether the Committee itself has erred in law in its own determinations on these substantive issues.

V. CONCLUSION [ 63 ] For the reasons I have given, I am satisfied that the two grounds of appeal on which leave have been granted have merit. For this reason, I would remit the matter to the Committee. [ 64 ] CCRL is entitled to its costs, calculated in the usual way. “Leurer C.J.S.” Leurer C.J.S. I concur. “Barrington-Foote J.A.” Barrington-Foote J.A. I concur. “Tholl J.A.” Tholl J.A.