Brandt Properties Ltd. Appellant (Appellant) v. Rural Municipality of Sherwood No. 159 and Saskatchewan Assessment, 2023 SKCA 5

Court of Appeal for Saskatchewan Docket: CACV3982 Citation: Brandt Properties Ltd. v Sherwood (Rural Municipality) , 2023 SKCA 5 Date: 2023-01-06 Between: Brandt Properties Ltd. Appellant (Appellant) And Rural Municipality of Sherwood No. 159 and Saskatchewan Assessment Management Agency Respondents (Respondents) Before: Richards C.J.S., Whitmore and Tholl JJ.A. Disposition: Appeal allowed Written reasons by: The Honourable Chief Justice Richards In concurrence: The Honourable Mr. Justice Whitmore The Honourable Mr.

Justice Tholl On appeal from: 2022 SKMB 7 , Regina Appeal heard: June 14, 2022 Counsel: Leonard Andrychuk, K.C., and Allison Graham for the Appellant Kim Bodnarchuk for the Respondents Richards C.J.S. I. INTRODUCTION [ 1 ] This appeal addresses the property tax assessments for a number of commercial properties in the Rural Municipality of Sherwood [RM]. It parallels Brandt Properties Ltd. v Sherwood (Rural Municipality) , 2023 SKCA 4 [ Brandt 2019 ]. Brandt 2019 dealt with the 2019 assessments of all of the properties presently in issue.

This appeal concerns the 2020 assessments. [ 2 ] In this case, the property owners appealed their assessments to the Board of Revision [Board] as they had in previous years. They put forward various arguments about errors allegedly made by the Saskatchewan Assessment Management Agency [SAMA] in its work. The Board dismissed the appeal. [ 3 ] The owners then appealed to the Assessment Appeals Committee of the Saskatchewan Municipal Board [Committee]. It also dismissed their appeals. [ 4 ] As in Brandt 2019 , I conclude that the Committee made material errors of law in its decision.

This matter must be remitted to it for reconsideration. II. BACKGROUND A. The properties and the parties [ 5 ] The properties in issue here are located in the area surrounding the City of Regina. They include a variety of commercial and other developments. The same tax agent represented the owners of all of these properties in their appeals to the Board and advanced identical arguments on their behalf.

It was therefore agreed that the evidence and argument presented in a lead appeal, one advanced by Brandt, would apply to all of the properties in issue and that the result in the lead appeal would be binding on all of the owners represented by the tax agent. B. SAMA’s approach [ 6 ] As in previous years, SAMA used a cost approach assessment model for 2020. It developed one model to assess the land [Land Model] and another to assess improvements [Improvement Model]. In doing this, SAMA divided the RM into several neighbourhoods.

It determined the base land rate separately for each of neighbourhoods 101, 301, 302, 303, 304 and 305.

In broad terms, those neighbourhoods can be described as follows: 101 – the majority of the RM except the areas found in the other neighbourhoods; 301 – all front row parcels in the Sherwood industrial subdivision; 302 – all back row parcels in the Sherwood industrial subdivision and front row highway commercial properties on the north side of Highway #1 east of Regina and east of Tower Road; 303 – all back row commercial parcels along Highway #1 east of Regina and east of Tower Road; 304 – all commercial parcels along Highway #6 south of Regina and some parcels along Highway #1; and 305 – industrial zoned land with some exceptions.

But, to determine whether sale prices needed to be adjusted for time, SAMA grouped all of these neighbourhoods together, using the 29 sales that had occurred in them. Six of those sales involved properties located in neighbourhood 101. Based on its consideration of these 29 sales, SAMA decided not to apply a time adjustment.

C. The Board decision [ 7 ] Brandt’s basic submissions to the Board tracked the main argument that it had made to the Board in 2019. It argued that neighbourhood 101 was different than other neighbourhoods covered by the Land Model and that, once neighbourhood 101 sales were taken off the table, it was apparent that a time adjustment to the remaining sales was required. [ 8 ] The Board dismissed Brandt’s appeal with brief reasons. It began its decision by describing the standard of review to be applied.

In that regard, it used precisely the same language as it had used in its 2019 decision, including the notion that it was required to adopt the “perspective and measurement of a ‘reasonable person’” (at para 3). [ 9 ] In a three-paragraph “Analysis” section, the Board found that no “significant” new evidence or compelling reasons to reverse its decisions from previous years had been advanced and that Brandt had not provided sufficient evidence to establish an error on the part of SAMA.

With respect to the evidence called by Brandt, the Board remarked that “statistics are not the trump card to prove an error” (at para 31). It concluded by saying that Brandt’s tax agent had developed an analysis that would benefit its clients but that it had not demonstrated “how this would impact the population as a whole” (at para 32). D. The Committee decision [ 10 ] Brandt appealed the Board’s decision to the Committee.

It advanced a number of arguments including that the Board had ignored evidence pertaining to comparability, had failed to recognize that Brandt had provided evidence that was new as compared to previous assessment years, had failed to provide adequate reasons and had rendered an unreasonable decision. [ 11 ] The Committee dismissed Brandt’s appeal. It found that Brandt had not put forward significant new evidence that would warrant a reversal of its decisions for previous assessment years and concluded that the Board’s decision was reasonable. This is the decision from which Brandt now appeals. III.

THE ISSUES [ 12 ] Brandt was granted leave to appeal on the following questions: (

a) Did the Committee incorrectly find that the Board of Revision had selected and applied the correct standard of review to the assessment? (

b) Did the Committee err in law by failing to apply the reasonableness standard of review established in Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 , including when it concluded that the Board’s findings were reasonable: (

i) without conducting an analysis of the substance of the evidence before the Board; or (ii) without considering whether the Board had misunderstood, mischaracterized, ignored or failed to consider the totality of relevant evidence, including the expert evidence? (

c) Did the Committee err in law by depriving the Appellant of its right of appeal by failing to remedy errors of law it found in the Board Decision or by failing to address a ground of appeal before it, including by failing to find that the Board: (

i) had improperly relied on the decisions in the prior appeals; or (ii) had improperly placed the onus on the Appellant to put forward “significant new evidence or compelling new reason such that it would reverse its decisions from previous years”? (

d) Did the Committee err in law by failing to find that the Board had improperly required the Appellant to demonstrate how the alleged errors and/or proposed remedy “would impact the population as a whole”? IV. ANALYSIS [ 13 ] I will address each of the points on which leave was granted. A. The standard of review applied by the Board [ 14 ] As noted above, the Board used the same language in this case to describe its approach to reviewing SAMA’s assessment work as it had employed in relation to the assessments considered in Brandt 2019 .

Brandt argues that the Committee erred in law by failing to correct this error. [ 15 ] For its part, SAMA suggests that Brandt did not raise the standard of review issue with the Committee and, therefore, that it is not a proper basis for an appeal to this Court. More specifically, SAMA submits that Brandt appealed to the Committee on the ground that the Board had provided insufficient reasons for its decision, not because the Board had failed to apply the correct standard of review. I am unable to accept this argument.

The Committee itself wrote, at paragraph 11 of its decision, that [a]s a result of case management and agreement of the parties, the grounds before the Committee are: …

3. The Board of Revision erred by failing to provide sufficient reasons and for failing to follow the direction outlined in Canada (Minister of Citizenship and Immigration) v. Vavilov ; 2019 SCC 65 which requires a rational chained based [ sic ] analysis in its reasons based upon the evidence before it when the standard of review is the reasonableness standard. (Emphasis added) [ 16 ] In its decision, the Committee somehow failed to address or come to grips with the question of whether the Board had applied an improper standard of review.

As a result, it committed effectively the same error here as it did in the decision addressed in Brandt 2019 , i.e., it deferred to, or endorsed, the Board’s use of an incorrect standard of review. This was a material error of law. [ 17 ] In closing on this point, I note that, in its factum, SAMA advances a detailed argument explaining that, in her testimony before the Board, the assessment appraiser offered to provide an adjustment of the neighbourhood 101 sales and that the Board made an order requesting such information.

SAMA suggests the response to the Board order revealed statistical results showing that, as a bottom line, the assessments of the properties in issue should be increased . SAMA then outlines some of the points made by Brandt in response to this analysis before concluding the Board made no end-of-the-day error in finding that SAMA’s assessment of comparability was reasonable. [ 18 ] This line of argument, even if it might be valid, cannot be given effect in the context of this appeal.

The issue here – the question of law on which leave was granted – is whether the Committee erred by not finding that the Board had failed to select and apply the proper standard of review. Just as in Brandt 2019 , it would not be appropriate for the Court to be drawn into the complicated statistical detail of a submission to the effect that there are ways around the arguments advanced by Brandt before the Board. B.

The standard of review applied by the Committee [ 19 ] This Court has recently confirmed the standards of review to be applied by the Committee in the course of entertaining appeals from board of revision decisions.

It provided as follows in Affinity Holdings Ltd. v Shaunavon (Town) , 2022 SKCA 83 [ Affinity ]: (a) “The Committee will review questions of jurisdiction on the standard of correctness” (at para 115). (b) “The Committee will review questions of law on the standard of correctness” (at para 118). (c) “The Committee will review all questions of fact on the standard of reasonableness” (at para 122). (d) “The Committee will review how a board of revision has handled questions of mixed fact and assessment law and practice on the standard of reasonableness” (at para 126). [ 20 ] In Affinity , the Court also confirmed that the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 , [2019] 4 SCR 653 [ Vavilov ], is applicable when the Committee reviews a board of revision decision for reasonableness: [94] A reasonable decision has two aspects in this context.

It is a decision that is (

a) based on an internally coherent and rational chain of analysis; and (

b) justified in relation to the facts, circumstances and conditions affecting the property in question as well as the assessment law and practice that constrains the assessor (see Laing at para 28). The reasonableness standard requires that a board of revision defer to a decision that has those characteristics. To be clear, the assessor’s decision must be justified by the assessor’s reasoning process as disclosed pursuant to MA , s. 230(4), CA , s. 200(4) or NMA , s. 251(5), on the record, or through testimony, as the case may be.

Even though a decision may seem reasonable on the assessor’s explanation of it, it may not be so once the other evidence adduced before the board is taken into account. (Emphasis in original) [ 21 ] Brandt argues that, while the Committee properly identified that the reasonableness standard of review was central to its decision, it failed to apply that standard as it has been explained in Vavilov . [ 22 ] I see considerable merit in Brandt’s submission on this point.

It argued before the Committee that the Board had ignored or misapprehended evidence concerning the comparability of neighbourhood 101 sales and other sales, that the Board had misapprehended or failed to come to grips with its arguments, and that the Board had ignored relevant precedents. All of these points went to the reasonableness of the Board’s decision and yet the Committee did not engage with them.

It made no reference to Vavilov and instead deferred to the Board, apparently on the basis that the Board had been “alive to the issues” and because the decision of the Board had been available to it given the record at the hearing. [ 23 ] As explained in Affinity at paragraph 94 , quoted above, Vavilov demands something more than and different from what the Committee did here. A reasonable decision has two aspects: (

a) it is based on an internally coherent and rational chain of analysis; and (

b) it is justified in relation to, among other things, the facts, circumstances and conditions affecting the property. In the context of this case, an inquiry as to the reasonableness of the Board’s decision should have involved consideration of whether that decision “added up”, whether the Board had misapprehended evidence, and whether the Board had ignored or failed to come to grips with Brandt’s arguments. See: Vavilov at para 126 . [ 24 ] None of this is to say, of course, that the Committee should have undertaken a de novo analysis of the case put to it by Brandt and SAMA.

My point is only that the Committee’s assessment of the Board’s decision – at least as that assessment is revealed in its written decision – was too superficial and incomplete to stand as a Vavilov -compliant inquiry into reasonableness. C. Reliance on previous decisions [ 25 ] Brandt also submits that the Board erred in law by approaching the appeal before it as turning on the question of whether it

could overcome the decisions made by the Board and the Committee in prior assessment years. Brandt says this effectively deprived it of its right of appeal and that the Committee compounded this error by adopting the same approach. [ 26 ] As explained in Brandt 2019 at paragraphs 47–48, every annual assessment is a distinct decision made by the assessor and every such assessment gives rise to a freestanding right of appeal.

With some statutory qualifications not relevant here, decisions made with respect to an assessment for any particular year do not determine the result of an appeal in a subsequent year. [ 27 ] The Board made a number of comments in its decision that, according to Brandt, indicate that it did not approach the proceedings for 2020 as involving a fresh and freestanding right of appeal but that it saw the appeal as an exercise wherein Brandt was obliged to displace previous decisions made by it and the Committee.

In this regard, Brandt notes the following passages from the Board’s decision: [11] This appeal is, in large part, a repeat of the appeals received and heard by this Board in two previous years. … … [17] The Appellant mostly restates the issues and arguments heard by this Board in 2017, 2018 and 2019. … … [19] The Appellant called Mr. Volodin as a witness. … Mr. Volodin was sworn by the Chair and effectively repeated his testimony from 2019. … … [21] Mr.

Levis mostly re-stated his opinion with respect to SAMA’s analysis versus [Brandt’s] proposed analysis as he had done in previous years. … [29] The Board finds no significant [emphasis added] new evidence or compelling new reason such that it would reverse its decisions from previous years, all of which have been upheld by the Committee. … … [33] For the simple reason stated above, and given the history of this appeal, it will be dismissed once again in 2020.

The Board can find no compelling reason to change its previous decision and/or attempt to overturn previous decisions of the Committee. (Emphasis in original) [ 28 ] As suggested by Brandt, the Committee effectively endorsed the Board’s approach. At paragraph 19 of its decision, the Committee said, “[t]he Board found no significant new evidence or compelling new reason such that it would reverse its decision from previous years. … Based on the record before us, the findings of the Board are reasonable based on the evidence and we will not interfere”. [ 29 ] The Committee’s reasoning reveals an error of law.

As noted, the assessment appeal for each year is independent of appeals in other years. As a practical matter, it can of course be expected that, if the assessor takes the same approach in years 1 and 2, and the property owner, on appeal, advances the same evidence and argument in years 1 and 2, the results in both years will be the same. But, for year 2, the issue will always be whether the evidence and argument advanced in relation to that year’s assessment establish assessor error.

It will never be appropriate to approach a year 2 appeal as if the property owner has the burden of overcoming the Board’s or the Committee’s year 1 decision. [ 30 ] In this case, the Committee noted, at paragraph 16 of its decision, that “[b]oth parties to the appeal before us agreed that there was new or different evidence submitted in the 2020 appeal before the Board”.

As a result, the Committee should have considered this evidence, along with the evidence that was apparently the same as what had been advanced in previous years, and asked itself whether that body of evidence, as a whole, established an error in the assessment. The Committee improperly diluted Brandt’s right of appeal by requiring that it present “significant” new evidence that would warrant the reversal of its previous decisions. D.

Impact on the population as a whole [ 31 ] The final question raised by Brandt is grounded in paragraph 32 of the Board’s reasons where, under the heading “Decision”, it wrote as follows: [ 32 ] To the Board, this is a clear example where Assessor’s discretion must be respected. [Brandt] appears to have developed an analysis that would benefit their clients however they have not demonstrated how this would impact the population as a whole .

In the result, the Board must respect SAMA’s consideration of the entire population. (Emphasis added) [32] The Committee appears to have affirmed this approach by endorsing the Board’s bottom line after saying this: [20] Lastly, the Board found this to be a clear case of assessor discretion. The Board found that [Brandt] had developed an analysis, which would benefit its clients but had not demonstrated how this would affect the population as a whole. The Board found it must respect SAMA’s consideration of the entire population.

While appreciating that assessor discretion is not unfettered, the Board found that the model and values had not changed between 2019 and 2020.

[ 33 ] Brandt takes exception to all of this, saying that the Board and the Committee put it to the task of proving the correct assessments for the entire property population as a pre-condition to succeeding on its appeal. [ 34 ] It is perhaps somewhat unclear what the Board intended by its reference to “how this would impact the population as a whole” but there is no doubt that Brandt is correct in asserting that it had no obligation to prove what the correct assessment should have been, either for its property or for other properties, in order to obtain relief from the Board.

It needed only to show an error in its assessment. See: Estevan Coal Corporation v Estevan (Rural Municipality No. 5) , 2000 SKCA 82 at paras 47–48 , [2000] 8 WWR 474. [ 35 ] Given that this matter will be remitted to the Committee for reconsideration, it is unnecessary to parse the decisions of the Board and the Committee any further to determine whether, in fact, they reasoned that Brandt had an obligation to demonstrate how its approach would affect other properties.

It will be sufficient to note that, on its reconsideration of this matter, the Committee must proceed on the basis that Brandt’s only end-of-day obligation is to establish an error in the assessment of its property. V. CONCLUSION [ 36 ] Brandt’s appeal must be allowed and the Committee’s decision set aside. It made errors of law that directly affected the bottom line of its analysis. [ 37 ] This matter is remitted to the Committee for reconsideration against the background of this decision. Brandt is entitled to costs in the usual way. “Richards C.J.S.” Richards C.J.S. I concur. “Whitmore J.A.” Whitmore J.A.

I concur. “Tholl J.A.” Tholl J.A.