Court of Queen's Bench of Alberta

Document Sample
Court of Queen's Bench of Alberta Powered By Docstoc
					                    Court of Queen’s Bench of Alberta
Citation: Edmonton (City) v. Assessment Review Board of the City of Edmonton,
2010 ABQB 634

                                                                           Docket: 1003 16052
                                                                           Registry: Edmonton


                                    The City of Edmonton

                                            - and -

 The City of Edmonton Assessment Review Board and Eco-Industrial Business Park Inc.



                              Oral Reasons for Judgment
                                        of the
                         Honourable Mr. Justice A.W. Germain

1.     Introduction

[1]     Eco-Industrial Business Park Inc. [the “Owner”] was disappointed with its 2010 tax
assessments by the City of Edmonton [the “City”], and therefore appealed those assessments to
the City of Edmonton Assessment Review Board [the “ARB”]. On September 8, 2010 the ARB
refused to give the City an adjournment of the hearing date. The City appeals that decision
pursuant to section 470(1) of the Municipal Government Act, R.S.A. 2000, c. M-26 and
alternatively applies for judicial review of the ARB’s decision.

[2]     This has become an emergency application, argued on Thursday, September 30, 2010,
with the fate of a hearing scheduled for Monday, October 4, 2010 hanging in the balance. For
this reason the court’s decision is delivered orally.
                                            Page: 2

2.     The Facts

[3]    On March 4, 2010 the Owner filed a complaint about the 2010 assessment notices for six
properties located within the city of Edmonton. The Owner’s complaint was that the assessment
incorrectly reflected market value, as the properties were contaminated.

[4]    The merit hearing of this matter before the ARB was scheduled for June 21, 2010,
however on May 6, 2010 the Owner requested the merit hearing be rescheduled. The City
consented. The ARB granted that adjournment on May 14, 2010. The new merit hearing date
was set for October 4, 2010.

[5]     On August 23, 2010 the Owner filed extensive background materials, plus one or more
expert reports, in support of their complaint. The internal rules of practice before the ARB
required the City respond to that material by September 20, 2010. The City hired a responding
expert who informed the city that it was not possible to fully respond to these materials by
September 20, 2010. The court was informed that the expert has still not completed his work.

[6]    The City applied for an adjournment of the October 4, 2010 merit hearing, which was
denied, despite the Owner’s consent and the fact that the Owner had previously been given an
adjournment to prepare for what was then described as a complex case.

[7]    The September 8, 2010 decision of the ARB to deny the City’s application is short; the
key portions of the decision may be set out in their entirety:


       The decision of the board is not to grant the postponement request.


       The board does not consider an exceptional circumstance exists to warrant the
       rescheduling of the hearing. The Assessment Review Board administration has
       advised additional time exists the week of the scheduled hearing to allow for extra
       hearing days.

[8]     By contrast, the ARB member who dealt with the Owner’s earlier adjournment request
had this to say [ARB return, Tab 7]:

       The complainant requested a postponement for rescheduling well in advance of
       the hearing, it is a first-time request, the respondent is amenable to the
       postponement and given the complexities of the situation including the fact that a
       postponement would enhance a more thorough disclosure based on additional
       information, this Board has determined that the circumstances giving rise to the
       request are exceptional. [Emphasis mine.]
                                              Page: 3

3.     Analysis

[9]     A number of questions arise in relation to the City’s challenge to the ARB’s decision.
The first is just what kind of proceeding has come before the Court of Queen’s Bench, an appeal
under Municipal Government Act, s. 470(1), or a judicial review?

       A.      Statutory Appeal or Judicial Review

[10] It is a first principle of administrative law that where an alternative mechanism exists that
provides an adequate remedy that judicial review is not the preferred remedy: Harelkin v.
University of Regina, [1979] 2 S.C.R. 561. Here, a statutory appeal is provided by Municipal
Government Act, s. 470(1):

       470 (1) An appeal lies to the Court of Queen’s Bench on a question of law or
       jurisdiction with respect to a decision of an assessment review board.

[11] However, this apparent absolute right of appeal has to be interpreted together with
section 470(3) which obliges an appellant to obtain leave to advance the appeal described by
section 470(1):

       470(3) An application for leave to appeal must be filed with the Court of Queen’s
       Bench within 30 days after the persons notified of the hearing receive the decision
       under section 469, and notice of the application for leave to appeal must be given

               (a) the assessment review board, and

               (b)   any other persons as the judge directs.

       [Emphasis added.]

[12] Experienced legal counsel will occasionally plead (in the alternative) both a statutory
appeal and a judicial review remedy where there is uncertainty how the court might construe the
grounds of appeal or review. In addition, despite the courts often ruling that where an appeal
right exists that should be the preferred route, there is no prohibition against learned counsel
joining these remedies. This approach is particularly wise when, as here, the appeal process itself
requires an initial leave application.

[13]   Here, the error alleged by the City can be described in one of two ways:

       1.      the ARB breached its obligation as a administrative body to adhere to the
               principles of procedural fairness - a subject for judicial review; or

       2.      the ARB made an error of law when it interpreted the Matters Relating to
               Assessment Complaints Regulation, Alta. Reg. 310/2009, s. 15(1) [the
                                              Page: 4

               “Regulation”], to indicate the City’s application to adjourn the hearing
               until the City had an opportunity to respond in full to the Owner’s
               evidence was not an “exceptional circumstance”, as specified in the
               Regulation, s. 15 - a subject for an appeal under s. 470(1).

[14] I conclude these questions both involve the same standard of review, correctness, and
therefore the exact character of this proceeding is irrelevant. However even had I concluded that
the review standard is that of reasonableness, it matters not, in the final outcome.

[15] It is well established that on appeal the conclusion of a lower body is owed no deference
when the appellate court reviews a question of law: Housen v. Nikolaisen, 2002 SCC 33 at para.
33, [2002] 2 S.C.R. 235.

[16] Recently, Binnie J. in Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12 at
para. 43, [2009] 1 S.C.R. 339 explained where an administrative body “… failed to observe a
principle of natural justice, procedural fairness or other procedure that it was required by law to
observe …” then during judicial review the question is addressed on a correctness standard:

       Dunsmuir says that procedural issues (subject to competent legislative override)
       are to be determined by a court on the basis of a correctness standard of review.
       Relief in such cases is governed by common law principles, including the
       withholding of relief when the procedural error is purely technical and occasions
       no substantial wrong or miscarriage of justice (Pal, at para. 9).

[17] There is no question that the ARB’s decision to not grant an adjournment involves “a
principle of natural justice” and “procedural fairness”. In Dunsmuir v. New Brunswick, 2008
SCC 9 at para. 77, [2008] 1 S.C.R. 190, Basterache J. explained:

       [77] Procedural fairness has many faces. It is at issue where an administrative
       body may have prescribed rules of procedure that have been breached. It is also
       concerned with general principles involving the right to answer and defence
       where one’s rights are affected. [Emphasis added.]

[18]   Justice Basterache continued at paras. 79, 90:

       [79] Procedural fairness is a cornerstone of modern Canadian administrative law.
       Public decision makers are required to act fairly in coming to decisions that affect
       the rights, privileges or interests of an individual.


       [90] From these foundational cases, procedural fairness has grown to become a central
       principle of Canadian administrative law. Its overarching purpose is not difficult to
       discern: administrative decision makers, in the exercise of public powers, should act
                                               Page: 5

       fairly in coming to decisions that affect the interests of individuals. In other words, “[t]he
       observance of fair procedures is central to the notion of the ‘just’ exercise of power”

[19] The ARB’s decision not to grant the City the adjournment requested flows from the
recently enacted Matters Relating to Assessment Complaints Regulation, Alta. Reg. 310/2009,
and specifically s. 15(1):

       15(1) Except in exceptional circumstances as determined by an assessment review
       board, an assessment review board may not grant a postponement or adjournment
       of a hearing.

This legislation is quite new, and at the present does not seem to have been the subject of judicial

       A.      The City’s Position

[20] The City’s position may be summed up succinctly. It asserts that it has both a statutory
right of appeal and grounds for a judicial review. It indicates that the standard of review is to the
level of correctness, but that in any event the ARB acted unreasonably by failing to grant an
adjournment without articulating sufficient reasons.

       B.      The ARB’s Position

[21] The ARB advances a number of arguments. The ARB argues it adhered to the
requirement from the Regulation, s. 15(1) that it can only adjourn an assessment review under
“exceptional circumstances”. The ARB argues its deliberation and response to the City’s
application should be split into two steps:

       1.      determination of whether exceptional circumstances exist, and

       2.      whether those exceptional circumstances warrant a delay in the proceeding.

[22] Succinctly, the most basic point the ARB argues is that the City’s application was not an
“exceptional circumstance”, despite the Owner’s earlier analogous application to assemble
evidence being considered exceptional.

[23] To interpret the meaning of “exceptional circumstance” the ARB argues the scheme of
the relevant legislation should be considered, and that a consistent theme emerges in the
Municipal Governance Act and the Regulation; that municipal tax assessment complaint review
should be conducted expeditiously. Though not stated in so many words, the ARB is arguing that
timeliness is the overriding principle that drives procedural choices during a tax assessment

[24] The ARB characterizes the question before the court as a question of mixed fact and law,
the law being Regulation, s. 15. The relevant facts are not detailed, but presumably are the
                                             Page: 6

events in this proceeding to the current date. If this is indeed the case then the City would be
unable to make an appeal under s. 470(1), which only allows appeals on questions of law and
jurisdiction. Another consequence would be that in a judicial review proceeding the ARB may
be owed deference: Dunsmuir v. New Brunswick.

[25] Further, the ARB argues this is an interlocutory matter, and that courts do not generally
review procedural issues that arise in administrative matters: Kellogg Brown and Root Canada
v. Alberta (Information and Privacy Commissioner), 2007 ABQB 499 at paras. 27-29, 434 A.R.
311. There is a well-established exception to that rule and that is where a “procedural” decision
may be the subject of court scrutiny if that decision has a “manifestly unjust result”, and that
“injustice cannot be adequately redressed if the trial is allowed to continue”: Paterson v.
Hamilton (1996), 181 A.R. 382 at para. 13, 39 Alta. L.R. (3d) 37 (Alta. C.A.), see also the recent
review on that issue by Verville J. in Alberta (Minister of Employment and Immigration) v.
Alberta Federation of Labour, 2009 ABQB 344, 473 A.R. 49.

       C.      The Owner’s Position

[26] The Owner attended the September 30, 2010 hearing, but did not file any materials, and
took no position in this appeal and/or judicial review hearing. The Owner’s sole concern was to
preserve its opportunity to apply for costs if the result of the City’s application is that the
October 4, 2010 hearing did not proceed.

       D.      The Right to Answer

[27]    I have concluded that a remedy advanced as a judicial review would have succeeded
here, and so would a leave application to appeal on an error of law. They are, essentially, the
same question. Putting the court’s concern succinctly, the failure to grant the City an
adjournment under the circumstances of this case was inappropriate even taking into account the
language used by the Legislature in Regulation, s. 15(1). The City has been unable to make a full
answer and reply to the evidence of the Owner, and that right to answer and defence is a basic
principle of procedural fairness. The Saskatchewan Court of Appeal in Preston Crossing
Properties Inc. v. Saskatoon (City), 2006 SKCA 63 at para. 46, 279 Sask.R. 117 emphasized
that while a tribunal that evaluates municipal taxes has broad authority to conduct its
proceedings in a less formal manner and control its own procedures, that does not remove its
obligations to adhere to the principles of natural justice:

       46 Thus, boards of revision are freed from conducting their hearings along the
       formal lines reserved for the courts and are given a considerable measure of
       comparative latitude in the interests of accessible, speedy, and efficient decision
       making. This is especially so in light of the fact these are lay tribunals, drawn
       from the community and expected to bring their intelligence, knowledge, and
       experience, along with their judgment and sense of fairness, to the commonplace
       business of municipal taxation and municipal tax disputes. What is required of
       them, from the standpoint of procedural fairness, is to give each of the parties to
       the proceeding the opportunity to fairly develop and state their respective
                                               Page: 7

       positions: To adduce their evidence and advance their arguments for and against,
       bearing in mind that it is for the boards to say what is irrelevant or redundant in
       the proper exercise of their duties, as it is for them to say how best to receive the
       evidence. [Emphasis added.]

[28] That is the fundamental underlying legal question in both possible avenues available to
the City, and involves the same standard of review - correctness.

[29] This conclusion also addresses the ARB’s argument that this court should not intrude in
an interlocutory matter. A breach of procedural justice is, by definition, a “manifestly unjust
result”, and clearly the City believes it has substantial interests in play in the present matter. To
deny the City the opportunity to respond to the Owner’s submissions therefore is a valid reason
for the court to intervene at this point: Paterson v. Hamilton; Alberta (Minister of Employment
and Immigration) v. Alberta Federation of Labour.

       E.      Different Treatment of the Parties

[30] What makes the ARB’s failure to adhere to well-established universal guidelines for
administrative bodies (and courts) that much more obvious is the very different treatment of the
two parties. The Owner’s application to get evidence led to the assessment review being delayed,
yet when the City attempted to respond in kind, the ARB denied its application. It goes without
saying that procedural fairness requires all parties must be treated in the same manner. Here, that
did not happen. That too is a basis on which to quash the ARB’s decision.

       F.      Adequate Reasons

[31] Last, there is the issue of the brevity of the reasons provided by the ARB. This is a
particular concern when legislation requires the administrative body provide reasons: Municipal
Government Act, s. 468(1). There is an obvious appearance that the rules of natural justice have
not been followed; the response by the ARB to the City’s application does not explain the result
of its deliberations. Therefore the City does not really know on what basis the adjournment
request was denied.

[32] The City raised four reasons for the adjournment but only one was dealt with specifically
in the denial reasons. Although I accept that reasons do not have to be lengthy, even for boards
that are obliged to issue reasons, those reasons still must allow the disappointed party to know
why they were disappointed. Without that degree of explanation the unsuccessful party cannot
determine whether an appeal has merit. Although the ARB urges me to conclude that I should
infer that the ARB properly considered all four grounds advanced from the City’s letter that
articulated the City’s reasons for requesting the adjournment, that argument loses strength when
one observes that the board only commented on one ground for adjournment but not the other
three. The sole issue the ARB appeared to address was the fact that additional time could be
made available following October 4, 2010 to expand the time frame within which to conduct the
merit hearing.
                                             Page: 8

[33] However, that fails to address the heart of the application for adjournment: that the City
could not be ready because their expert was not ready. The ARB makes no explanation of why
that consideration is irrelevant, and again the ARB’s conclusion clearly requires further
explanation due to the apparently different treatment of the two parties. Our Court of Appeal has
on several occasions emphasized the context of a proceeding provides guidance as to when
reasons are adequate, which includes “the representations made at the hearing, the nature of the
issues under appeal, the record of the proceedings and any applicable statutes or statutory plan”:
Lor-al Springs Ltd. v. Ponoka (County) Subdivision and Development Appeal Board, 2000
ABCA 299 at para. 13, 271 A.R. 149; Keephills Aggregate Co. Ltd. v. Parkland (County of)
Subdivision and Appeal Board, 2003 ABCA 242, at para. 22, 348 A.R. 41; McCauley
Community League v. Edmonton (City), 2010 ABCA 215, at para. 24.

[34] Here, the ARB seems to have come to opposite conclusions when confronted by two
analogous applications - and makes no explanation as to why. That too is a reason that requires I
quash the decision.

       G.      “Exceptional Circumstances”

[35] However, because the Regulation upon which the ARB made their decision is new, and
has not been interpreted in the courts, I offer some non-binding guidance on what might be
considered “exceptional circumstances”. I qualify my remarks by noting that the results for all
cases are highly dependent on circumstance, and my remarks should be considered against that

[36] It is clear that the ARB has been affected in their approach to adjudicative fairness by
section 15(1) of the Regulation. Absent a legislative definition, the ordinary meaning of those
words “exceptional circumstance” defaults the ARB into a position where they cannot routinely
grant adjournments, even where it may be reasonable to do so, when considering the broader,
strategic context.

[37]   Section 15(1) is set out here:

       15(1) Except in exceptional circumstances as determined by an assessment review
       board, an assessment review board may not grant a postponement or adjournment
       of a hearing.

[38] The legislation also provides guidance to the ARB by including a potentially absolute
hearing deadline requirement - all appeals from the current year’s assessments must be heard by
the end of that assessment year: Municipal Government Act, s. 468(1). As such, the ARB would
have been powerless to adjourn this merit hearing beyond December 31, 2010. In September,
when this adjournment application was dismissed, there was still effectively four months to
comply with the absolute deadline so time, although critical, was not pressing.

[39] Most tribunals that are entrusted with something as serious as the subject matter of this
case are generally expected to act wisely and grant adjournments when circumstances are
                                               Page: 9

appropriate. In this regulation, adjournments may not be granted except in exceptional

[40] The Regulation however must be interpreted contextually, as it is ancillary to the
overarching authority given to the ARB to deal with the serious matters of municipal tax
assessment. ARB decisions often have significant economic consequence. A property owner
may by virtue of an erroneous assessment pay more than they should, or alternatively the City
may receive less than it should. For this reason the board must both have the power, as well
exercise the power appropriately, to ensure that the parties have a fair, complete, and
comprehensive hearing. By inference, this must include sufficient time to prepare.

[41]    If the ARB is not given the opportunity to adjourn cases from time to time then they will
have to, in a case such as this (where one adjournment is granted to obtain expert reports, and
that implies similar reports in reply), ensure that the hearing is set so far into the future that the
respondent will always have sufficient time to respond.

[42] A ‘generous preparation time’ approach does not make common sense nor is it good
public policy, as in many cases this scheme will result in inherent and unnecessary delays.
Factually, in this case the City asserts that when it consented to the Owner’s application it did
not envisage that the Owner’s submissions would include expert reports that would oblige the
City to respond in kind. This illustrates how difficult it would be for the ARB to attempt to guess
just how long the time requirements would be for any given municipal tax assessment appeal.

[43] The Regulation must therefore be interpreted in such a way that the definition of
exceptional circumstance cannot be so narrow and restrictive as to prevent hearings that are fair
to both litigants. I have concluded that the phrase “in exceptional circumstances” must usually
include a circumstance where an adjournment is needed to respond to an expert report. That such
an adjournment is appropriate is emphasized by the fact that learned counsel for the Owner also
recognized the necessity for a full response by the City, and consented to the adjournment.
Stating the obvious, when the merit hearing was set for October 4, not enough time was allowed
for the proper pursuit of the necessary expertise and that must constitute an exceptional
circumstance. Had that issue been considered, and properly developed in the reasons, the
outcome of this case may have been different.

[44] Although this legislation is new, it would be inappropriate to set out a definitive list of
what constitutes an exceptional circumstance, as exceptional circumstances are fact specific.
However, as here, if the currently scheduled hearing date does not allow a party sufficient time
to prepare, that must be an exceptional circumstance as the failure to grant an adjournment could
result in a miscarriage of justice.

[45] The ARB is not required to grant adjournments simply because one litigant consents to
the adjournment sought by its opponent. In fact, any such assumption would be contrary to the
Regulation, and also the long-standing adjudicative principle that it is the tribunal, not the
litigants, that control the tribunal’s process. However, where two responsible litigants have
concluded that more time is necessary and express that opinion by consenting to an adjournment,
                                              Page: 10

such consent should be given some deference and not lightly ignored in the absence of
compelling reasons. Here, the ARB decision suffers from the lack of reasons, let alone
compelling ones. In this case, the ARB gave no reason for ignoring the consent of the other
litigant as possibly supplying confirming evidence of an “unusual circumstance”.

[46] Finally, one of the reasons given for the adjournment request here was that the parties
were in useful discussions concerning resolution. Again, the ARB has no obligation to grant
adjournments solely to give the parties more time to resolve their dispute, however it is good
public policy on the part of all boards and tribunals to allow parties to resolve their own disputes,
and therefore the fact that parties are engaged in fruitful negotiations that may resolve a case
might in some instances constitute an exceptional circumstance.

4.     Ruling

[47] The decision to not grant an adjournment under these circumstances appears
unreasonable and is not explained. The City’s application for judicial review requesting an order
prohibiting the ARB to commence the merit hearing on October 4 is hereby granted. This
prohibition remains in effect until the procedural shortcomings created by the September 8
decision have been resolved. From a pragmatic point of view (although not part of this ruling)
when the ARB was approached in September for the adjournment, counsel for the Owner and
City had suggested alternate days in November of 2010 that were suitable. Assuming that these
days remain available, a reasonable approach might be to convene the October 4 hearing as
scheduled for the sole purpose of procedurally adopting the November dates.

[48] Alternatively, the City is granted leave to appeal and their appeal is allowed. The merit
hearing, currently scheduled for October 4, 2010, is hereby stayed. The matter is returned to the
ARB, for a hearing on October 4, 2010 to set new hearing dates.
                                             Page: 11

[49] Finally, although the Owner did not participate in this application or appeal process, it
did address the court requesting that if the hearing did not proceed on October 4, 2010 the
Owner’s entitlement to apply either to the ARB or to this Court to consider the issue of their
thrown away costs would be preserved. The ARB and the City agreed that this was a reasonable
approach and that becomes part of this order as well.

Heard on the 30th day of September, 2010 delivered orally October 1, 2010
Dated at the City of Edmonton, Alberta this 1st day of October, 2010.

                                                    A.W. Germain


Cameron J. Ashmore and Rebecca Ratti
Solicitor for the City of Edmonton
        for the Applicant

Dick Haldane
Solicitor for Eco-Industrial Business Park
        for the Respondent

Kate Hurlburt
Solicitor for The Assessment Review Board
        for the Respondent