Melville Place Ltd. v. Halifax (City)

Melville Place Ltd. v. Halifax (City) Court Court of Appeal Date 1996-01-11 Citation 1996 NSCA 27 Docket CA 118602 Judge/Registrar/Adjudicator Freeman, Gerald B. (Honourable Justice) (CA); Hart, Gordon L.S. (Honourable Justice); Hallett, J. Doane (Honourable Justice) (CA) Document Type Decision Decision Content C.A. No. 118602 NOVA SCOTIA COURT OF APPEAL Cite as: Melville Place Ltd. v. City of Halifax, 1996 NSCA 27 Hallett, Hart, and Freeman, JJ.A. BETWEEN: MELVILLE PLACE LIMITED, ) David A. Miller, Q.C. a body corporate ) Meinhard Doelle ) for the Appellant Appellant ) ) - and - ) ) CITY OF HALIFAX, a body corporate, ) Mary Ellen Donovan DIRECTOR OF ASSESSMENT of the ) for the Respondent, Province of Nova Scotia, ) City of Halifax and GREGORY AULD, Chair of the ) Regional Assessment Appeal Court ) Randall R. Duplak Respondents ) for the Respondents, ) Director of Assessment and ) Gregory Auld ) ) ) Appeal Heard: ) January 11, 1996 ) ) ) Judgment Delivered: ) February 6, 1996 ) ) ) ) ) THE COURT: Appeal dismissed without costs per reasons for judgment of Freeman, J.A.; Hallett and Hart, JJ.A., concurring. Freeman, J.A. The issue in this appeal is whether a regional assessment appeal court has jurisdiction under s.76 of the Assessment Act (R.S.N.S. 1989 c. 23) to add properties to the assessment roll or increase valuations of its own motion independently of an appeal process and, if so, the standard of procedural fairness which applies. Through a series of errors traced in the decision appealed from, the value of buildings in a retirement complex completed in 1992 was omitted from the assessment of the respondent, Melville Place Limited, on the 1993 City of Halifax assessment roll. Melville Place was assessed only $62,600 for the land value; taxes based on that amount were paid. No appeal from that assessment was filed. The Director of Assessment informally advised the assessment appeal court of the omission and requested the amendment to the Assessment Roll. On December 21, 1993, the Regional Assessment Appeal Court, by its own motion, increased the assessment to $10,074,800. The owner was notified within three days, as the Act requires. It filed a Notice of Appeal from the assessment and applied to the Supreme Court of Nova Scotia by way of certiorari to quash the amendment and mandamus to restore the previous assessment. That application was dismissed by Justice Jamie Saunders. This appeal from Justice Saunders' judgment alleges that he erred in finding that the Assessment Appeal Court acted within its jurisdiction and that it reached its decision in a procedurally unfair manner. The Assessment Roll The assessment roll is a list of the valuations of all taxable properties in a municipality. It is prepared by the Director of Assessment from updated information gathered by him and his staff prior to December 1st in each year and filed with the clerk of the municipality. It then becomes the basis for municipal property taxation for the following year. To oversimplify, the total valuation of all taxable properties in the municipality disclosed by the Assessment Roll is divided by the municipal budget for the current year to yield that year's tax rate. When a property is undervalued or omitted, the total amount of money collected by the municipality is the same, but the burden falls more heavily on those who have been properly assessed, and the owner of the omitted or underassessed property enjoys an unfair advantage. An accurate Assessment Roll, therefore, ensures that municipal expenses payable from property taxes are equitably shared among all properties in the municipality proportionately to their value. This consideration underlies the concern of the legislature expressed by the various remedial provisions of the Assessment Act discussed below. In general, when provision is made for rectification of errors or omissions, the correction must occur during the year for which the Assessment Roll is in effect, and it always gives rise to a Right of Appeal on the merits in a de novo hearing before the Assessment Appeal Court. Appeals under s. 74 As a first step in the present appeal, it is necessary to see just what it was that the Assessment Appeal Court did in adding the omitted property to the Assessment Roll. If it amended the assessment roll as the result of an adjudication without jurisdiction or observing procedural fairness, certiorari might well lie. If what it did was merely an administrative function carried out in accordance with statutory authority, different considerations apply. Powers of the Assessment Appeal Court on an appeal are set out in s. 74: "74(1) On any appeal, the court may (a) confirm, reduce or increase the valuation of the property that is the subject of the appeal, and confirm, reduce or increase an occupancy assessment notwithstanding that the occupancy assessment was not appealed; (b) dismiss the appeal; (c) add to the roll the name and assessment of any person left off the roll; (d) strike off the roll the name of any person wrongfully entered thereon; (e) transfer the assessment to the proper person when any property has been assessed in the name of a person who is not legally liable to the assessed therefor; (f) when any property has been assessed more than once, strike out the assessment that is improper or illegal; (g) change the classification of all or part of the property that is the subject of the appeal; and (h) correct any clerical errors made by the assessor in the assessment roll." The appeal process leading to the exercise of s. 74, powers by assessment appeal court, must be triggered by a notice of assessment appeal and include a hearing pursuant to s. 72, for which proper notice is required to all interested parties. Section 72(1) provides: "72(1) The court, after hearing the appellant and any witnesses he produces, and the respondent and any witnesses he produces, and the assessors, if necessary, shall determine the matter." The assessors are competent witnesses, not parties, and the hearing is de novo. A full opportunity is provided for scrutinizing the assessment on its merits. The Court, or rather the member of the court who hears the appeal, must provide his or her decision to the recorder or clerk of the court, usually within sixty days of the hearing, and pursuant to s. 75 the recorder must, within three days, give notice of the decision to all interested parties. Any person aggrieved by a decision of the assessment appeal court has a right of appeal to the Nova Scotia Utility and Review Board pursuant to s. 85. Once the appeal procedure is complete and the assessment is either confirmed or amended, the person in whose name the property is assessed is liable to pay municipal tax on the assessed value at the applicable rate for the taxation year to which the assessment roll containing that assessment applies. Section 76 amendments Section 76 of the Assessment Act provides as follows under the heading "Further Powers": "76(1) The court may, of its own motion, (a) add to the roll any property that has been omitted therefrom with the value thereof as determined by it and the name of the person to whom it should be assessed; and (b) increase the amount of the valuation of any property." Notice "(2) In either such case, notice shall within three days thereafter be given by the recorder to the clerk and the person whose name is added or whose assessment is increased, in the manner provided by Section 75." Section 77 provides: "Notice of appeal from Section 76 order 77(1) A person whose name or property or both have been added or whose valuation has been increased by the court under Section 76 may give notice of appeal as provided by Section 63 [21 days] and the assessment appeal court shall sit at such time and place as it shall determine, within fourteen days thereafter, to hear and determine his appeal." Notice to appellant and clerk "(2) The recorder shall give the appellant and the clerk ten days notice of the sitting in the manner provided by Section 70." "Property" means "assessable property" under s. 2(o). "Assessable property" includes, pursuant to s. 2(a)(v), "buildings and structures erected or placed upon, in, over, under or affixed to land, including buildings and structures under construction or partially constructed". The right of the assessment appeal court under s. 76(2) to correct omissions of its own motion is comparable to a similar right given to the Director of Assessment by s. 55, which provides: Omission from roll "55(1) If in any taxation year the Director after the assessment roll has been filed with the clerk discovers that property or occupancy assessment of any person to an amount of not less than one hundred dollars, and which is liable to taxation, has been omitted from the assessment roll, the Director shall at any time before the end of the taxation year in respect of which the assessment roll has been filed assess the person for the property or occupancy assessment, and the rates thereon, at the rate fixed for the current taxation year, shall be levied and collected in the same manner as if the property or occupancy assessment had been on the roll when it was filed." Improper classifications of commercial property may be corrected by the Director in the same manner under s. 56. Section 57 similarly provides for correcting a "gross and manifest error" which results in the overassessment of any owner. As well, when a notice of appeal is filed, the director has power to amend the relevant assessment under s. 68. Notice must be given after each change and persons affected have a right of appeal in every instance. When a tax roll is corrected by whatever method, taxes for the current year may be levied and collected on the property as if it had been on the roll as originally filed. When the Director of Assessment changes an assessment roll after it has been filed, he must give notice to the parties affected. When the change is made by the assessment appeal court either under s. 74 or s. 76, the court recorder must give notice. That is the chief significance of the reference to s. 75 in s. 76(2). Section 76 is not triggered by a notice of appeal and does not require a hearing. The amendment to the roll results from the motion of the court itself, which presumably must act on information provided to it. Section 61 of the Act provides: "61 The Director or a person appointed by him shall assist the regional assessment appeal court in its duties." Therefore, it is perfectly proper that the information on which the court acts should come from the Director, as it did in the present instance. If the omission had been corrected by the Director pursuant to ss. 55, 56 or 57, the appeal would be brought under ss. 62 or 63 of the Act, and the procedure would be the same as for an appeal from an assessment included in the original roll. When the correction is made by the assessment appeal court under s. 76, the right of appeal is limited by s. 77 to the persons whose name or property have been added, or whose valuation has been increased, and the hearing by the assessment appeal court must be held within fourteen days. Whether an appeal is brought to the assessment appeal court under ss. 62 and 63 or under s. 77, the hearing is de novo under s. 72. The essential similarity of the appeal procedure suggests that the legislature considered the powers given the assessment appeal court under s. 76 to be just one more method among several of ensuring that assessment rolls for each year would be fair and complete. In my view, s. 76 contains two distinct powers: to add omitted property under s. 76(1)(a); and to increase the amount of the assessment under s. 76(1)(b). The s. 76(1)(a) power is similar to the right of the Director to add omitted property under s. 55. Under s. 68(2), the Director may increase the valuation of an assessment, as distinct from adding omitted property, but only when a notice of appeal is in effect. A notice of appeal is not a prerequisite to the exercise of the power of the assessment appeal court under s. 76(1)(b). There was discussion in the present appeal as to whether the assessment appeal court was adding property that had been omitted - the buildings - or whether it was simply increasing the amount of the valuation of the property which had been $62,600. Not a great deal turns on this point because the assessment appeal court had the authority to do either; it was not material whether it purported to act under s. 76(1)(a) or s. 76(1(b). However, I incline to the view that omitted property was added, both because buildings are a distinct category of assessable property under s. 2(a)(v) and because of the reasoning of Justice Cooper in Harvard Realty v. Director of Assessment and City of Halifax (1979), 35 N.S.R. (2d) 60. In considering the meaning of the "assessment complained of" in s. 68(2) he stated at p 70: "In my view the whole of the assessment need not be the subject of complaint but it may be directed to one component of the whole assessment only. To interpret the phrase "assessment complained of" as meaning that a valuation of property forming part of the total assessment and not complained of falls within the review power of the Director so as to enable him of his own motion to increase that valuation is to ignore the governing words "complained of"." The component Justice Cooper was referring to was the residential as opposed to commercial assessment but he cited as authority Les Immeubles B.P. Ltee. v. Ville d'Anjou et al. (1978), 4 Municipal and Planning Law Reports 1. In that case, the component at issue was real property not included on the assessment roll; the Quebec Superior Court found that under the relevant legislation, it could not be added during a taxpayer appeal unless the municipality also appealed. The procedure under s. 76 is unique to the Assessment Act, under which practices evolved over a long period of time when property taxes were the dominant form of taxation. There is an inexact analogy with ex parte proceedings, particularly interim injunctions. Justice Saunders cited Dexter and Dexter v. Department of Municipal Affairs (1981), 49 N.S.R. (2d) 169 in which a regional assessment appeal court found it did not need a properly constituted appeal before it in order to increase an assessment of its own motion under s. 91, the present s. 76. Judge OHearn of the County Court found he did not have jurisdiction to consider the jurisdiction of the assessment appeal court but went on to make the following obiter comments at page 174: "In the event that I am wrong in this conclusion [that a certiorari application was more appropriate], I am of the opinion that the history of the legislation in question here justifies the learned chairman of the Assessment Appeal Court in his conclusion that he was entitled to act of his own motion under the Assessment Act s. 91, although no proper appeal was before him. The provision goes back in substance to the Towns and Corporations Act of 1888, S.N.S. 1888, c. 1, s. 112, which was made more explicit by a consolidation Act, S.N.S. 1895, c. 4, s. 124. These provisions were enacted at a time when assessment appeal courts were expected to act to some extent of their own experience and knowledge. It is true that errors in assessment will normally come to the attention of the Assessment Appeal Court in the course of appeals before them, but the language of s. 91 is quite general and unambiguous, and to read it in the sense proposed by the appellants would require the addition of words that are simply not there." This view is supported by the comparison of ss. 74 and 76. The further powers provided by s. 76 are similar to powers provided under s. 74 following the hearing of an appeal. If an appeal process were necessary to activate s. 76 jurisdiction, s. 76 would serve no purpose: the section would be redundant. The expedited right of appeal from the assessment appeal court's order on its own motion, which lies to the same court, is also noteworthy. That also strongly suggests that the power to add to the assessment roll of its own motion was merely intended to be an administrative function exercised independently of the appeal, or adjudicative, process because of the accompanying right to a full and speedy hearing and adjudication on the merits. That interpretation is consistent with the other methods provided by the Act for correcting the assessment roll throughout the year following its preparation. In my view, therefore, the clear language of s. 76 clothes assessment appeal courts with jurisdiction to make specified amendments to the assessment role of their own motion as an administrative, not an adjudicative, function. I would dismiss the appeal with respect to absence of jurisdiction. The rules of natural justice relied on by the appellant must, therefore, be considered in the context of an administrative amendment to the assessment roll. The Second Issue: Fairness and Impartiality McPhee Pontiac Buick (GMC) Limited v. City of Dartmouth was heard concurrently with the present appeal because the issues are identical. The appellant in McPhee cited Cardinal and Oswald v. Kent Institution, Director of (1986), 63 N.R. 353; 24 D.L.R. (4th) 44 (S.C.C.) at p. 51-52 to express the duty of the assessment appeal court: "This Court has affirmed that there is, as a general common law principle, a duty of procedural fairness lying on every public authority making an administrative decision which is not of a legislative nature and which affects the rights, privileges or interests of an individual . . ." Counsel for McPhee next quotes Lord Denning in Kanda v. Malaya (1962), A.C. 322 (P.C.) at p. 337: "The rule against bias is one thing. The right to be heard is another. Those two rules are the essential characteristics of what is often called natural justice. They are the twin pillars supporting it. They have recently been put in the two words, Impartiality and Fairness. But they are separate concepts, and they are governed by separate considerations. If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him; and then he must be given a fair opportunity to correct or contradict them . . ." This, of course, is exactly what happens when the assessment roll is amended under s. 76. The amended roll is an allegation of the value of the property on which the owner is liable to pay municipal taxes. An assessment, whether in the original roll or added by amendment, does not give rise to a liability to actually pay taxes until it is invested with final effectiveness, either as the result of an appeal or acceptance by the acquiescence of a property owner who chooses not to appeal. The assessment is a statement of the case the owner must accept or challenge reduced to a form recognized by the court. An owner's fair opportunity to correct or contradict an assessment amended under s. 76 is provided by the de novo hearing to which he is entitled by ss. 72 and 77. In my view, this amply satisfies the requirement for fairness, and I do not consider that the unfairness issue has been made out. The Apprehension of Bias The next issue is one of partiality, whether the communication to the assessment appeal court of the information upon which it amends the assessment roll of its own motion creates an apprehension of bias. The McPhee appellant continues the quotation from Lord Denning: "It follows, of course, that the judge or whoever has to adjudicate must not hear evidence or receive representations from one side behind the back of the other. The court will not inquire whether the evidence or representations will work to his prejudice. Sufficient that they might do so. The Court will not go into the likelihood of prejudice. The risk of it is enough. No one who has lost a case will believe he has been fairly treated if the other side has had access to the judge without his knowing." Recognizing that bias is not as sharply defined in an administrative setting as an adjudicative one, the McPhee appellant cites Chief Justice Laskin in Nicholson v. Haldimand-Norfolk Regional Board of Com'rs of Police,[1979] 1 S.C.R. 311 at p. 324: "I accept, therefore, for present purposes and as a common law principle what Megarry J. accepted in Bates v. Lord Hailsham, at p. 1378, "that in the sphere of the so-called quasi-judicial the rules of natural justice run, and that in the administrative or executive field there is a general duty of fairness." The Director is not "the other side" referred to by Lord Denning in Kanda v. Malaya (supra). The other side may be the municipality, which has an interest in its tax base, or it may include other property owners who also have an interest because, theoretically, their own share of liability for municipal expenses will increase if the appellant's is reduced. The Director is an officer of the Department of Municipal Affairs, not of the municipality nor the other owners. He has a statutory duty to assist the assessment appeal court under s. 61. He has, theoretically at least, no interest in the outcome. In the present appeal, the Director had reliable information relevant to the assessment roll. He was under a duty to put that information in a form in which it could be dealt with; that is, to make it part of the assessment roll. He might have considered correcting the omission himself under s. 55. It was also perfectly appropriate for him to request that the assessment appeal court make the alteration under s. 76. The legislature clearly intended that the assessment appeal court, acting administratively, could amend the assessment roll of its own motion and then, in a judicial role triggered by the appeal process, consider the merits of the amendment. There is a loose analogy here with an ex parte amendment of pleadings in a court in which an action is to be heard. In my view, a reasonable apprehension of bias does not arise in these circumstances. After considering the evidence, the submissions of counsel and the authorities cited by them, I am in agreement with the conclusion of Justice Saunders: "There is nothing to suggest that the applicant was denied natural justice or procedural fairness in the manner in which its assessment was increased. As already indicated, there was no requirement upon the RAAC to conduct a hearing with respect to the question of whether the building located on the lot should be added to the roll. This was not an appeal whereby the court's convening of a hearing (s. 60) in the exercise of the court's powers on appeal (for example s. 66, s.71, s.72 or s.74) would arise. Rather the action taken by the RAAC here fall within its "Further Powers" pursuant to s.76. As there was no requirement to have a hearing, there was no reason to notify the property owner in advance that a decision to add the building to the roll was being considered. I find that the court acted fairly towards the applicant. Notice of its decision was delivered promptly. Real and substantive relief is provided in a right of appeal. (s.77). The decision was well within the jurisdiction of the RAAC and should be allowed to stand unless disturbed on appeal. The fact that the RAAC proceeded with the recommendation of the Assessment Office, on its own motion, does not make it improper for it to hear the appeal. The applicant's right to a fair hearing is not compromised. Such duality in the appeal procedure is statutorily sanctioned. While I do not agree that any reasonable apprehension of bias arises in these circumstances, it could be easily cured in any event by appearance before a differently constituted court." I would dismiss the appeal but in the present circumstances, without costs. FREEMAN, J.A. Concurred in: HALLETT, J.A. HART, J.A. C.A. No.118602 NOVA SCOTIA COURT OF APPEAL BETWEEN: MELVILLE PLACE LIMITED ) Appellant ) - and - ) REASONS FOR ) JUDGMENT BY: CITY OF HALIFAX, DIRECTOR OF ) ASSESSMENT, and GREGORY AULD ) Freeman, J.A. ) Respondents ) ) ) ) ) ) )