The Saskatchewan Court of Appeal dismissed the appeal by Preston Crossing Properties (“Preston”) of an assessment decision by the Municipal Board Committee upholding an assessor’s application of a 72% market adjustment factor to the buildings, based on a notable traffic increase to the buildings rendering them more valuable than other nearby buildings. The Committee did not err in concluding that Preston was given full opportunity to develop and state its case before the Board of Revision and in upholding the market adjustment factor of .72 (as opposed to .61 in valuing buildings Preston regarded as comparable to its own) for the purposes of the assessment.

Administrative law – Municipalities – Property assessment – Market adjustment factor – Decisions of administrative tribunals – Assessment Appeal Board – Hearings – Conduct of hearings – Fairness – Judicial review – Evidence – Admissibility – Procedural requirements and fairness – Natural justice

Preston Cross Properties Inc. v. Saskatoon (City), [2006] S.J. No. 335, Saskatchewan Court of Appeal, May 31, 2006, Cameron, Lane, and Smith J.J.A

In 2004, the City Assessor assessed commercial buildings owned by Preston Crossing Properties (“Preston”) using a market adjustment factor of .72 (acting on the premise that comparable buildings had sold on average for 72% of their depreciated replacement cost the relevant time). Preston appealed the assessment to the Board of Revision for the City of Saskatoon, arguing that a .61 market adjustment factor should have been used. The Board dismissed the appeal. Preston then appealed to the Assessment Appeals Committee of the Saskatchewan Municipal Board on the grounds that the Board of Revision had deprived it of a fair hearing and had erred in upholding the market adjustment factor used by the Assessor. The Committee disagreed and dismissed the appeal. Leave to appeal to the Court of Appeal was granted in relation to two questions: Whether the Board of Revision deprived the owner of a fair hearing and whether it erred in upholding the use of a market adjustment factor of .72 for the purpose of the assessment.

During the hearing before the Board, Preston made it clear that despite an earlier decision of the Board to apply a .72 market adjustment factor (MAF) and the fact that Preston was advancing essentially the same grounds of appeal, it proposed to demonstrate the .72 MAF was inappropriate through adducing new evidence in the form of traffic counts and maps. The Board agreed to accept the new evidence but suggested that Preston “focus its presentation on the new evidence except for what would be required as background information to support the grounds of appeal”. Preston argued that this severely prejudiced its right to both develop and state its position, and it was necessary for the board of revision to remain open to take a fresh look at an assessment in the face of materially different evidence from year to year.

While boards of revisions are adjudicative bodies and bound by the principles of natural justice, they 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. The suggestion by the Board at the outset of the hearing that Preston “focus” its presentation on the new evidence, while allowing for the presentation of “background information” is not tantamount to what happened and the Assessment Appeals Committee did not err in law in finding that Preston had been denied a fair hearing by being denied the opportunity to fairly develop and state its case.

Nor did the Committee err in law in accepting the Board of Revision’s decision endorsing the use of a MAF of .72. As noted in Cadillac Fairview Corporation v. Saskatoon (City), [2002] 11 W.W.R. 89 (Sask.C.A), the judgment of an assessor in making such an assessment (based on a comparison of similar buildings)should not be interfered with on appeal unless it is founded on material error of fact, or law, or assessment principles and practices. In the present case, neither the Board of Revision nor the Assessment Appeals Committee could find any tenable basis in fact, or in law, or in assessment principle and practice, for interfering with the judgment of the City Assessor nor could the Court find any basis in law to interfere with the decision of the Assessment Appeals Committee. In the circumstances, the appeal was dismissed.

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