An owner of property (“Price Club”) was unsuccessful in its appeal of a decision of the Assessment Appeals Committee restoring a reassessment of the property by the Assessor which had increased the assessed value of the property by almost $1,000,000. The court held that the Assessor had properly calculated the property’s market adjustment factor and the decision to change the classification of the building for assessment purposes was appropriate and fell within the broad discretion granted to the Assessor.
Administrative law – Municipalities – Property assessment – Appeals – Market adjustment factor
Price Club Canada Real Estate Inc. v. Regina (City),  S.J. No. 80, Saskatchewan Court of Appeal, February 4, 2003, Bayda C.J.S., Tallis and Jackson JJ.A
This appeal concerns a 1999 assessment of Price Club’s property located at 665 University Park Drive in Regina (the “Costco building”). The appeal focuses on the interpretation and application of the market adjustment factor (“MAF”). Prior to 1999, the Costco building was grouped, for MAF purposes, under the retail/office assessment group. In 1999, the Assessor placed the Costco building in the commercial MAF grouping. As a result of the reassessment, the assessed value of the building increased from $2,575,640 to $3,541,500. Price Club appealed to the Regina Board of Revision on the ground that the property had been assigned to the wrong MAF group. This appeal was allowed by the Board of Review. Regina appealed the Board’s decision to the Assessment Appeals Committee, which allowed the appeal and restored the original 1999 reassessment. The Committee concluded that the Board of Review erred in applying the MAF based on a consideration of the type of business carried on and comparable improvements and not on a consideration of the type of building or structure as required by the assessment manual (the “Manual”). Price Club then appealed the decision of the Committee.
The appeal was brought with leave under s. 33.1 of the Municipal Board Act, S.S. 1988-89, c. M-23.2. This Act limits the right of appeal to questions of law or jurisdiction only.
The court considered the issue of whether the Committee erred in law by misinterpreting or failing to apply the distinction, as required by the Manual, between the concept of the MAF and the concept of replacement cost new. The court noted that the Saskatchewan Assessment Manual is prepared under the authority of section 12 of the Assessment Management Agency Act, S.S. 1986, c. A-28.1 and has the force of law.
The court reviewed the material relating to the reassessment of the Costco building in 1999. The court concluded that the Assessor calculated the property’s MAF in accordance with the Manual, including proper neighbourhood identification and proper application of the calculation procedure. The court found that the Assessor did not start the MAF determination with a view to giving a higher MAF to properties with lower costed RCN’s (Replacement Cost New) such as the Costco building.
Price Club also argued that the Committee erred in law by interpreting the Manual as meaning that, when the MAF is determined, the Assessor need not consider the specific classes of present use also enumerated in the Manual. The court reviewed the directions in the Manual which provided that the “fair value of land and improvements is determined in accordance with the present use of the land or improvements. No consideration is given to the highest and best or any potential future use that may be made of the property”. The Manual contained detailed classifications on the present use of land. Regina challenged this submission, arguing that the Assessor properly exercised his discretion in determining which properties were comparable to the Costco building, including those with commercial present use and those of the same building classification. The court cited the decision of the Saskatchewan Court of Appeal in Cadillac Fairview Corp. v. Saskatoon (City),  11 W.W.R. 89, which held that the use of words of such general meaning as “comparable” conferred upon the Assessor a broad discretion in respect of determining how properties should be grouped in similarity. Here, it was found that the decision clearly fell within such broad discretion.
In the result, the appeal of Price Club was dismissed.
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