An operator of a telecommunication system (“GT”) was unsuccessful in its application for judicial review of a decision of a municipal government board (the “Board”) relating to the assessment of GT’s data assets.

Administrative law – Municipal boards – Property assessment – Decisions of administrative tribunals – Judicial review – Standard of review – Patent unreasonableness – Privative clauses

GT Group Telecom Services Corp v. Alberta (Municipal Government Board), [2005] A.J. No. 215, Alberta Court of Queen’s Bench, February 15, 2005, Hawco J.

GT operated a telecommunication system in Alberta. It offered what was referred to as data services (Internet-based services) and voice services (telephone and fax services). The equipment used for data services is referred to as “data assets”. GT was assessed by the Alberta Assessment Services Branch for its data assets for the years 2001 and 2002. GT objected to the assessment because other companies in the province which provided similar services, particularly the cable television companies, were not assessed anything for their data assets.

A hearing took place before the Board in January and February 2003. The Board agreed that cable television companies did not report equipment necessary to permit a data service. Having determined that the cable television providers with data capabilities were not being assessed for the equipment necessary to provide the data service, the Board went on to find that a systemic problem existed. The Board concluded that fairness and equity required that it consider a remedy. The Board found that approximately 2 to 4% of the value of a cable system was not being assessed. It determined that the appropriate remedy would be to reduce the data component of the assessment of GT by an equal amount. GT applied for judicial review of this decision.

In determining the appropriate standard of review of the Board’s decision, the court used the pragmatic and functional approach, noting that the appropriate standard of review is to be determined by consideration of four factors:

  1. the presence or absence of a privative clause;
  2. the expertise of the tribunal relative to that of the reviewing court on the issue in question;
  3. the purpose of the legislation and the provision in particular; and
  4. the nature of the question – law, fact, or mixed law and fact.

In this case, the governing legislation contained a “weak privative clause” which indicated that the legislature intended that decisions of the Board be given moderate deference. With respect to the Board’s expertise, the court found that the Board had significant expertise in the area of property assessment and was much better suited to this determination than the court. This militated in favour of giving the Board’s decision considerable deference. The purpose of the legislation in question was to determine whether municipal taxation was fair or equitable. The court held that the Board’s decision should be afforded greater deference in this situation. In reviewing the nature of the question, the court looked to the Supreme Court of Canada decision in Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, where the court outlined three indicia for the characterization of a problem as a question of mixed fact and law: 

  1. It is a question of mixed fact and law if the question involves the application of general principles of the Act to specific circumstances.
  2. A question of mixed fact and law does not involve easily extracted and discretely framed questions of law.
  3. The decision on a question of mixed fact and law is intricately bound to many factual findings and inferences about the events and the interests of the public.

In this case, the court reviewed the decision of the Board as a whole and determined that the Board’s task involved questions on mixed law and fact arising within a rather specialized area of law and expertise. Based upon this conclusion, the court found that the appropriate standard of review of the Board’s decision in this case was one of patent unreasonableness.

GT’s argument was that the Board should have simply removed its data assets from the assessment roles as the cable companies were not assessed for their data assets. However, the court noted that the Board considered this issue and determined that the nature of the data assets between companies such as GT and the cable companies were significantly different. The evidence before the Board was that once a cable system was in place, it was possible to add to the one-way cable television service a two-way data service by the addition of a limited amount of equipment. The Board had concluded that GT had failed to establish that the different systems required the same or similar equipment. The court indicated that it was not prepared to reconsider the material before the Board and weigh the evidence to see if it agreed with the Board’s decision on this point. In this case, there was a basis for the Board’s decision and the court was not satisfied that the decision was patently unreasonable. GT’s application was dismissed with costs.

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