Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd. (Municipal law — Taxation — Property assessments)

On appeal from a judgment of the Alberta Court of Appeal (2015 ABCA 85), affirming a decision of Rooke A.C.J. (2013 ABQB 526), which set aside the decision of the Assessment Review Board.

The taxpayer Company owns a shopping centre in Edmonton, Alberta. For the 2011 taxation year, the City of Edmonton assessed the value of the mall at approximately $31 million. The Company disputed this assessment by filing a complaint with the Assessment Review Board. The Company’s position was that the assessed value exceeded the market value of the mall and was inequitable when compared to the assessed value of other properties. It sought a reduction in the assessed value to approximately $22 million.

When reviewing the Company’s submissions and evidence, the City discovered what it determined was an error in its original assessment. The City requested that the Board increase the assessed value of the shopping centre to approximately $45 million. While the Company expressed concern about the City’s change in position, it did not dispute the Board’s power to increase the assessment in this case. Under s. 467(1) of the Municipal Government Act, after hearing a complaint, an assessment review board may “change” the assessment or “decide that no change is required.” The Board ultimately increased the assessment to approximately $41 million. A decision of an assessment review board may be appealed to the Court of Queen’s Bench, with permission, on a question of law or jurisdiction of sufficient importance to merit an appeal. On appeal to the Alberta Court of Queen’s Bench, the chambers judge set aside the Board’s decision and remitted the matter to the Board for a hearing de novo. This order was affirmed on appeal to the Alberta Court of Appeal. This Court must determine what the appropriate standard of review is for the Board’s implicit decision that it could increase the Company’s property assessment and determine if the Board’s decision withstands scrutiny on that standard.

Held (5-4): The appeal should be allowed, the decision of the Court of Appeal set aside and the Board’s decision reinstated.

Per Abella, Cromwell, Karakatsanis, Wagner and Gascon JJ.:

The standard of review in this case is reasonableness. Unless the jurisprudence has already settled the applicable standard of review, the reviewing court should begin by considering whether the issue involves the interpretation by an administrative body of its own statute or statutes closely connected to its function. If so, the standard of review is presumed to be reasonableness. This presumption of deference on judicial review respects the principle of legislative supremacy and the choice made to delegate decision making to a tribunal, rather than the courts. A presumption of deference on judicial review also fosters access to justice to the extent the legislative choice to delegate a matter to a flexible and expert tribunal provides parties with a speedier and less expensive form of decision making.

In this case, the framework from Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, provides a clear answer. The substantive issue here — whether the Board had the power to increase the assessment — turns on the interpretation of s. 467(1) of the Act, the Board’s home statute. The issue does not fall within one of the four categories identified in Dunsmuir as calling for correctness review. Accordingly, the standard of review is presumed to be reasonableness.

A statutory right of appeal is not a new category of correctness and should not be added to the list of correctness categories enumerated in Dunsmuir. Recognizing issues arising on statutory appeals as a new category to which the correctness standard applies would go against strong jurisprudence from this Court.

The presumption of reasonableness is grounded in the legislature’s choice to give a specialized tribunal responsibility for administering the statutory provisions, and the expertise of the tribunal in so doing. Expertise arises from the specialization of functions of administrative tribunals like the Board which have a habitual familiarity with the legislative scheme they administer. Expertise may also arise where legislation requires that members of a given tribunal possess certain qualifications. However, expertise is not a matter of the qualifications or experience of any particular tribunal member. Rather, expertise is something that inheres in a tribunal itself as an institution.

This Court has often applied a reasonableness standard on a statutory appeal from an administrative tribunal, even when the appeal clause contained a leave requirement and limited appeals to questions of law, or to questions of law or jurisdiction. In light of this strong line of jurisprudence — combined with the absence of unusual statutory language — there was no need for the Court of Appeal to engage in a long and detailed contextual analysis. Inevitably, the result would have been the same. The presumption of reasonableness is not rebutted here.

The contextual approach can generate uncertainty and endless litigation concerning the standard of review. As in British Columbia, legislatures can specify the applicable standard of review; unfortunately explicit legislative guidance is not common.

The Board’s decision to increase the Company’s property assessment was reasonable. Given that the Company did not dispute the Board’s power to increase the assessment in this case, it is not surprising the Board did not explain why it was of the view that it could increase the assessment. Accordingly, the Board’s decision should be reviewed in light of the reasons which could be offered in support of it. It was reasonable for the Board to interpret s. 467(1) of the Act to permit it to increase the Company’s property assessment at the City’s request. While s. 460(3) of the Act provides that only assessed persons and taxpayers may make complaints, the scheme of the Act does not require that municipalities be empowered to file a “complaint” against an assessment. The Act provides other mechanisms by which municipalities can change or seek changes to an assessment. The Board’s interpretation of s. 467(1) of the Act is consistent with the ordinary meaning of “change” in s. 467(1) and the overarching policy goal of the Act, to ensure assessments are correct, fair and equitable. The alternative would permit taxpayers to use the complaints process to prevent assessments made in error from being corrected, thereby frustrating the Act’s purpose.

Per McLachlin C.J. and Moldaver, Côté and Brown JJ. (dissenting):

The appropriate standard of review of the Assessment Review Board’s decision is correctness. The legislature of Alberta created a municipal assessment complaints regime that allows certain questions squarely within the expertise of an assessment review board to be reviewed on a deferential standard through the ordinary mechanism of judicial review. The legislature, however, also designated certain questions of law and jurisdiction — for which standardized answers are necessary across the province — to be the subject of an appeal to the Court of Queen’s Bench. The statutory scheme and the Board’s lack of relative expertise in interpreting the law lead to the conclusion that the legislature intended that the Board’s decisions on such questions be reviewed on a correctness standard. As a result, even were the Board’s interpretation presumptively owed deference on the basis that the Board is interpreting its home statute, this presumption of deference has been rebutted by clear signals of legislative intent. Consistency in the understanding and application of these legal questions is necessary, and only courts can provide such consistency.

The existence of a statutory right of appeal can, in combination with other factors, lead to a conclusion that the proper standard of review is correctness. A statutory right of appeal, like a privative clause, is an important indicator of legislative intent and, depending on its wording, it may be at ease with judicial intervention. But a statutory right of appeal is not a new “category” of correctness review. The ostensibly contextual standard of review analysis should not be confined to deciding whether new categories have been established. An approach to the standard of review analysis that relies exclusively on categories and eschews any role for context risks introducing the vice of formalism into the law of judicial review. In every case, a court must determine what the appropriate standard of review is for this question decided by this decision maker. This is not to say that a full contextual standard of review analysis must be conducted in every single case. Where a standard of review analysis is performed and the proper standard of review is determined for a particular question decided by a particular decision maker, that standard of review should apply in the future to similar questions decided by that decision maker. Disregard for the contextual analysis would represent a significant departure from Dunsmuir and from this Court’s post‑Dunsmuir jurisprudence.

The question at issue here is not one which falls within the Board’s expertise. An administrative decision maker is not entitled to blanket deference in all matters simply because it is an expert in some matters. An administrative decision maker is entitled to deference on the basis of expertise only if the question before it falls within the scope of its expertise, whether specific or institutional. Expertise is a relative concept. It is not absolute. While the Board may have familiarity with the application of the assessment provisions of the Act, the legislature has recognized that the Board’s specialized expertise does not necessarily extend to general questions of law and jurisdiction. The Board’s decisions may, instead, be appealed on these questions of law and jurisdiction. The legislature created a tribunal with expertise in matters of valuation and assessment. In light of this lack of relative expertise on questions of law and jurisdiction, it cannot be maintained that a presumption applies that the legislature intended that the Board’s determinations on questions of law and jurisdiction be owed deference.

Applying the proper standard, the Board erred in increasing the Company’s property assessment in this case and the appeal should be dismissed. The Board’s decision to increase the assessed value based on the City’s submissions must be quashed because the Board considered information that it was statutorily prohibited from considering. Assessment review boards have jurisdiction only to adjudicate the issues that are raised in the assessed person’s complaint form. The Board in this case erred by hearing and partially accepting the City’s new and revised assessment based on an entirely new classification, one which was not the subject of the Company’s complaint. The word “change” in s. 467(1) of the Act should be given its ordinary and grammatical meaning. The Board is not precluded from ever increasing an assessment; however, the Board’s decision‑making authority in this case was limited to the specific matters that were raised in the Company’s complaint. The Board had no authority to inquire into the fairness and equity of the assessment generally and to consider or accept elements of the new assessment proposed by the City in increasing the assessment.

Reasons for judgment by Karakatsanis J. (Abella, Cromwell, Wagner and Gascon JJ. concurring)

Joint dissenting reasons by: Côté and Brown JJ. (McLachlin C.J. and Moldaver J. concurring)

Neutral Citation: 2016 SCC 47

Docket Number: 36403

http://scc-csc.lexum.com/scc-csc/scc-csc/en/item/16213/index.do