855 Park Street Properties GP Ltd. c/o Hungerford Properties (SK) Appellant (Appellant) v. City of Regina, 2023 SKCA 134

Court of Appeal for Saskatchewan Docket: CACV3849 Citation: 855 Park Street Properties GP Ltd. v Regina (City) , 2023 SKCA 134 Date: 2023-12-08 Between: 855 Park Street Properties GP Ltd. c/o Hungerford Properties (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 27 , 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 ] 855 Park Street Properties GP Ltd., c/o Hungerford Properties (SK) [Hungerford] is the owner of vacant land located in Regina [Land]. It is unhappy with the municipal taxes assessed against the Land for 2020. [ 2 ] Hungerford first appealed the 2020 tax assessment to the Regina Board of Revision [Board].

It was unsuccessful in that appeal: 855 Park Street Properties GP Ltd. v Regina (City) (31 July 2020) Regina, Appeal No 2020-28785 (Regina Board of Revision) [ Board Decision ]. [ 3 ] Dissatisfied with this result, Hungerford took the matter to the Assessment Appeals Committee of the Saskatchewan Municipal Board [Committee]. That appeal was also dismissed: 855 Park Street Properties GP Ltd. v Regina (City) , 2021 SKMB 27 [ Committee Decision ]. [ 4 ] Hungerford has been granted leave to appeal from the Committee Decision to this Court.

I have concluded that its appeal must be allowed, the Committee Decision be set aside and the matter remitted to the Committee. My reasons follow. II. BACKGROUND [ 5 ] The Land is a 956,380.99 square foot (21.954 acre) parcel located in the Ross Industrial Park area of Regina, an area also known as “Study Area 5203”. The assessor valued the Land at $8,973,600 for taxation purposes, by applying the sales comparison approach.

This approach involves the 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.

In this appeal, Hungerford’s overarching complaint is that the assessor inadequately accounted for the size of this parcel in the determination of its assessed value. [ 6 ] In the assessment, the assessor purported to follow SAMA’s 2015 Cost Guide , ver 1.3 (1 January 2020) (Regina: Saskatchewan Assessment Management Agency, 2015) [ Cost Guide ], published by the Saskatchewan Assessment Management Agency [SAMA]. The assessment calculation involved many variables, including a “base land rate”, a “standard parcel size” and “land size multiplier”, sometimes shortened as BLR, SPS and LSM, respectively.

These acronyms are used in some of the documents that are quoted in this judgment. The base land rate is the expected sale price per unit of comparison that a standard parcel size 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.

In short, it is intended to reflect the law of diminishing returns, or economies of scale, that is, the notion that when measured on a per unit of area basis, larger parcels of land may, at least in some contexts, be worth less than smaller parcels. [ 7 ] In this case, the assessor determined that the standard parcel size was 43,560 square feet (1.0 acres). Crucially to the issues in this appeal, the assessor derived the standard parcel size from the inventory of land located in Study Area 5203, not from land sales .

The assessor calculated the base land rate to be $10.95 per square foot based upon an analysis of sales of property that were close to the standard parcel size. Finally, using some of the same sales as were used to determine the base land rate, the assessor determined that a land size multiplier curve of 105% should be applied for parcels over the standard parcel size. [ 8 ] The effect of the assessor’s calculations was to make some adjustment to the assessed value of the land based on its size.

However, Hungerford was of the view that this adjustment was insufficient to account for the Land’s large size relative to other parcels

used in the assessment calculation so it appealed to the Board. [ 9 ] Pertinent to the issues in this appeal, Hungerford argued before the Board that the assessor had erred in “not following accepted appraisal practices, principles and statistical methodologies” to determine the assessed value of the Land. More particularly, Hungerford submitted that the assessor (

a) should have calculated the standard parcel size using land sales, not inventory, (

b) should not have used data from the same sales to calculate both the base land rate and the land size multiplier, (

c) should have calculated the base land rate using typical parcels and based on a central tendency measure or minimum or maximum value instead of on 12 land sales near the chosen standard parcel size. Hungerford based its submissions on

section 2 of the Cost Guide and several previous decisions of the Committee and of this Court. [ 10 ] The Board wrote in its decision that it “could not find evidence of err[or] with the Assessor’s application of the guidelines provided in the 2015 SAMA Cost Guide, including those requirements found in sections 2.2 – Base Land Rate, 2.3 – Site Adjustments, and 2.5 – Size Adjustment” ( Board Decision at para 58).

It also stated that it had considered the case law relied upon by Hungerford but it “could not find evidence of any misapplication or misinterpretation in the Assessor’s compliance with the directions provided in the [Committee] and Court of Appeal cases cited by [Hungerford] as showing errors by the Assessor” (at para 61).

Finally, the Board concluded on this point that it “could not find evidence that the Assessor erred in following the proper assessment practices and principles while carrying out his duties in the assessment of the subject property, either in the case law articulated by [Hungerford] or in the application of the 2015 SAMA Cost Guide” (at para 63). In the result, Hungerford’s arguments were dismissed by the Board. [ 11 ] Hungerford appealed against the Board Decision to the Committee.

One of its arguments was that the Board had erred “by finding the Assessor followed standard appraisal practice and the methodology/process outlined by the SAMA Cost Guide”. Another of Hungerford’s arguments was that the Board had “erred by misapplying or finding case law not relevant to the subject appeal”. The Committee rejected these and several other submissions offered by Hungerford and dismissed its appeal. III. ISSUES [ 12 ] Hungerford has been granted leave to appeal to this Court on a single question of law.

The decision granting leave to appeal restated this question as a ground of appeal, as follows: 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. IV. ANALYSIS [ 13 ] Hungerford’s appeals to the Board and the Committee proceeded in large measure in tandem with appeals taken by several other taxpayers who were dissatisfied with their 2020 assessments.

One of the other dissatisfied ratepayers was Consumers’ Co-operative Refineries Limited [CCRL], the owner of a refinery located on a large parcel of land in Study Area 5203. Before both the Board and the Committee, CCRL was represented by the same agent as was Hungerford, and the arguments made against the assessments of Hungerford’s land and CCRL’s land were largely the same. [ 14 ] Specifically, both Hungerford and CCRL complained that the City of Regina tax assessor had failed to adequately account for the size of the land that each owned.

In the case of both assessments, the assessor had used some of the same sales to calculate both the base land rate and the land size multiplier. The assessor also calculated the standard parcel size based on inventory. In both cases, the taxpayer also argued that the assessor should have grounded the standard parcel size on sales data, not inventory, and that the standard parcel size should be set with reference to the point at which land values per square foot begin to decline as parcel size increases.

These, and several other arguments, were brought forward to the Board by both taxpayers and both appeals were dismissed. [ 15 ] Hungerford’s appeal to the Committee was argued on the same day as CCRL’s. The Committee released its decision in CCRL’s appeal 12 days before the Committee Decision at issue in Hungerford’s appeal: Consumers Co-operative Refineries Limited v Regina (City) , 2021 SKMB 23 [ CCRL Committee Decision ]. The Board Decision in Hungerford’s appeal from its assessment was, in some respects, more robust than the Board’s decision in CCRL’s appeal.

However, ultimately, on these key questions of the calculation of the base land rate, the standard parcel size and the land size multiplier, the Committee’s reasoning for dismissing both appeals was substantively the same. [ 16 ] In this case, as in CCRL’s appeal against the CCRL Committee Decision , the Committee applied a standard of reasonableness to questions that demanded a correctness review.

More specifically, rather than determining whether the Board had correctly applied assessment law and principles, in both cases the Committee concluded that the “review and analysis provided by the Board was reasonable based on the evidence” ( Committee Decision at para 31, CCRL Committee Decision at para 19, emphasis added). [ 17 ] In addition, in both decisions, on the critical question of whether the Board had erred “by misapplying or finding case law submitted by [Hungerford] not relevant to the subject appeal” ( Committee Decision at para 8(d), CCRL Committee Decision at para 8 (d)), the Committee offered identical analysis of two key decisions, 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.

The Committee Decision also did not grapple with other decisions which Hungerford referred to in its appeal to it. [ 18 ] In a judgment that is being issued concurrently with these reasons, the Court has allowed the appeal against the CCRL Committee Decision : see Consumers Co-operative Refineries Limited v Regina (City) , 2023 SKCA 133 [ 2023 CCRL ]. The decision of this Court to allow CCRL’s appeal is based on the finding that the Committee had erred: (

a) in its

interpretation and application of the Cost Guide , a number of decisions of the Committee and this Court in relation to the determination of the base land rate, standard parcel size and land size multiplier curve; and (

b) by failing to consider or address CCRL’s arguments or by failing to consider relevant matters by

misconstruing CCRL’s arguments or both. [ 19 ] In this case, Hungerford has been granted leave to appeal in connection with the first of the two grounds that were at issue in 2023 CCRL . However, as explained in that decision, the two are related. More specifically, as in 2023 CCRL , the core problem with the Committee Decision in this case is that it fails to grapple with the requirements of assessment law and practice except through the misfocused application of the incorrect standard of review. It therefore can be said that the Committee erred in its

interpretation and application of the Cost Guide and a number of decisions of the Committee and this Court in relation to the determination of the base land rate, standard parcel size and land size multiplier curve. This, of course, is the question on which leave to appeal to this Court was granted in this case. [ 20 ] I am satisfied that the essential reasons that led this Court to allow CCRL’s appeal against the CCRL Committee Decision apply equally to Hungerford’s appeal. Thus, I would allow Hungerford’s appeal and remit this matter back to the Committee. V.

CONCLUSION [ 21 ] For the reasons I have given, I would allow Hungerford’s appeal and remit the matter to the Committee. Hungerford 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.