Nova Scotia (Assessment) v. Homco Realty Fund (20) Limited Partnership

Nova Scotia (Assessment) v. Homco Realty Fund (20) Limited Partnership Court Court of Appeal Date 2006-05-26 Citation 2006 NSCA 66 Docket CA 246980 Judge/Registrar/Adjudicator Roscoe, Elizabeth A. (Honourable Justice) (CA); Cromwell, Thomas A. (Honourable Justice); Fichaud, Joel E. (Honourable Justice) (CA) Document Type Decision Relations Library Sheet - Nova Scotia (Assessment) v. Homco Realty Fund (20) Limited Partnership - 2006 NSCA 66 - 2006-05-26 - Library Sheet Decision Content NOVA SCOTIA COURT OF APPEAL Citation: Nova Scotia (Assessment) v. Homco Realty Fund (20) Limited Partnership, 2006 NSCA 66 Date: 20060526 Docket: CA 246980 Registry: Halifax Between: The Director of Assessment holding office as such pursuant to the provisions of the Assessment Act, R.S.N.S. 1989, c. 23 Appellant v. Homco Realty Fund (20) Limited Partnership and the Halifax Regional Municipality Respondents Docket: CA 257467 Between: Homburg L.P. Management Incorporated, as general partner for Homco Realty Fund (20) Limited Partnership Appellant v. The Director of Assessment, under the Assessment Act, R.S.N.S. 1989, c. 23 as amended Respondent Judges: Roscoe, Cromwell and Fichaud, JJ.A. Appeal Heard: May 16, 2006, in Halifax, Nova Scotia Held: Appeals dismissed per reasons for judgment of Cromwell, J.A.; Roscoe and Fichaud, JJ.A. concurring. Counsel: Randall R. Duplak, Q.C. and Kirby Eileen Grant, for the Director of Assessment Michael O’Hara for Homco Realty Fund (20) Limited Respondent, Halifax Regional Municipality, not appearing Reasons for judgment: I. INTRODUCTION: [1] These two appeals result from the Utility and Review Board’s decision to reduce the assessment on an office building in Halifax. The Board’s decision is reported at [2005] N.S.U.R.B.D. No.11 (Q.L.). The Director appeals the Board’s reduction of the assessment and Homco appeals the Board’s refusal to award Homco costs in spite of its success. [2] At the hearing of the appeal in this Court, the panel announced that both appeals were dismissed with reasons to follow. These are the reasons. [3] The Board delivered detailed, careful and cogent reasons for both its disposition of the appeal and with respect to its refusal to order costs. This permits me to state my conclusions very briefly. II. ISSUES: [4] Reorganized and consolidated, the issues on the Director’s appeal are these: 1. Did the Board exceed its jurisdiction or apply the wrong legal tests when it reviewed and amended the list of qualified market sales as a matter of valuation of assessment? 2. Did the Board err in law or fact in continuing to apply the approach to uniformity outlined in Director of Assessment (N.S.) v. Doucette and Halifax (City) (1992), 112 N.S.R. (2d) 326 (C.A.)? 3. Did the Board commit reviewable error in its rulings with respect to an adjournment sought by the Director, in its reception and imposition of certain limits on the expert testimony it received and in reaching patently unreasonable conclusions from the evidence? [5] On Homco’s costs appeal, the issues are whether the Board exceeded its discretion with respect to costs by failing to consider the indemnity principle and whether either its costs rule or the principles which it applied improperly fettered its statutory discretion with respect to costs. III. STANDARD OF REVIEW: [6] The standard of review on appeals from the Board to this Court in assessment matters was thoroughly reviewed by Oland, J.A. writing for the Court in Director of Assessment (N.S.) v. Gatsby’s Bar and Eatery Ltd. (2004), 223 N.S.R. (2d) 70; 2004 NSCA 56. Without repeating all that was said there, I simply incorporate by reference the Court’s analysis of the contextual factors relating to the presence or absence of a privative clause or statutory right of appeal and the purpose of the legislation: see paras. 13 and 18. I will limit my discussion to how the nature of the issues in this case affects the pragmatic and functional analysis of the standard of review. [7] The issues in this case fall into two main categories. In the first are general legal questions about the limits of the Board’s statutory authority and the proper application of decisions of this Court. More specifically, these issues include whether the Board had authority to review and amend the list of qualified sales, whether it erred in its interpretation or application of our decision in Doucette and, on the costs appeal, whether the Board’s costs rule is ultra vires as being inconsistent with its statutory discretion as to costs. These are all legal questions which, respectfully, the Board is no better equipped to resolve than is the Court. I would review the Board’s resolution of these particular legal points on the correctness standard. I emphasize that, as is clear from Gatsby’s, it does not follow that all legal questions are necessarily reviewed on the correctness standard. [8] The second category of issues involves the Board’s exercise of discretion, its rulings on evidence and its findings of fact. As set out by the Court in Gatsby’s, findings of fact should be reviewed for patent unreasonableness. As the Board ought to be afforded latitude in exercising its discretion and in setting its procedure, I would review the other issues raised on the reasonableness standard. IV. ANALYSIS: A. The Director’s Appeal: 1. Did the Board exceed its jurisdiction or apply the wrong legal tests when it reviewed and amended the list of qualified market sales as a matter of valuation of assessment? [9] The Director challenged the Board’s jurisdiction to review and amend the list of qualified sales. The Board fully considered this argument and dismissed it in paras. 16 to 24 of its decision. I agree with the Board’s conclusion for the reasons which it gave. [10] The Director also asserted in this Court that the Board erred, in effect, by failing to afford the Director’s approach to the analysis of qualified sales a measure of deference. This submission was only vaguely developed before the Board. The submission in this Court was, in effect, that the Board ought to afford the Director’s exercise of judgment a measure of deference and intervene only when wrong principles have been used or there has been some “significant” error. [11] Even if I accepted these submissions (and I emphasize that I am simply assuming this, not deciding it), they would not assist the Director here. It is apparent from the Board’s reasons that it considered the Director had erred, fundamentally, by excluding large and expensive commercial properties whose values had been determined by the discounted cash flow method and that this had resulted in “... the actual general level of assessment [being] ... significantly lower than the one asserted by the Director”: Board’s reasons, paras. 46 - 57. This was not the Board second guessing the Director’s judgment or intervening on the basis of an insignificant error. 2. Did the Board err in law or fact in continuing to apply the approach to uniformity outlined in Director of Assessment (N.S.) v. Doucette (1992), 112 N.S.R. (2d) 326 (C.A.)? [12] At the root of the proceedings before the Board and on the Director’s appeal to this Court, is a single question: Did the Director show that the general level of assessment should not be used in the manner proposed by Homco following Director of Assessment (N.S.) v. Doucette, supra and that under the mass appraisal methodology employed by the Director, uniformity is achieved by adjusting assessments to reflect market trends through the use of several statistics or ratio studies? [13] The Board found that the evidence adduced did not support the Director’s contention. As the Board said at para. 44 of its decision, the evidence before it provided “... no foundation” for any departure from the Doucette approach. [14] In my view, the Board did not err in law in its interpretation or application of Doucette in this case or make any patently unreasonable determination of fact on the record before it. The Board did not commit reviewable error by continuing to apply Doucette in this case. [15] The Director asserts that the Board’s reasons, consisting of some 111 pages and 268 paragraphs, are not adequate, particularly with respect to its handling of the facts relevant to the Doucette issue. I do not agree. The Board’s decision is comprehensive and carefully crafted and, in my view, fully explains the reasons for its decision. I refer particularly to paragraphs 39 through 45. 3. Did the Board commit reviewable error in its rulings with respect to an adjournment sought by the Director, in its reception and imposition of certain limits on the expert testimony it received and in reaching patently unreasonable conclusions from the evidence? [16] The Director submits that the Board erred by denying an adjournment. The circumstances in which this adjournment was sought are outlined in paras. 42 and 43 of the Board’s reasons on the merits. I cannot say that the Board exercised its discretion unreasonably in the rather extraordinary circumstances which confronted it. It was reasonable for the Board to conclude that Homco should not be delayed and put to further expense because the Minister had decided not to fund the continued participation of the Director’s main witness. [17] The Director also complains that the Board erred in its handling of the admissibility of expert testimony. Bearing in mind the Board’s Appeal Rules relating to expert reports, the scope of Mr. Musycsyn’s report and the fact that the Gloudemans’ report was struck from the record, these complaints have no merit. [18] The Director also says that the Board erred in its appreciation of some of the evidence. However, there is nothing to show that any of the Board’s critical findings of fact are patently unreasonable. Nor do I read the Board’s decision as attributing any mala fides to the Director, a conclusion which is reinforced by the Board’s refusal to award costs against him. [19] As announced at the hearing, the Director’s appeal is dismissed. B. Homco’s Costs Appeal: [20] As noted earlier, the issues on the cross appeal are whether the Board exceeded its discretion with respect to costs by failing to consider the indemnity principle and whether either its costs rule or the principles which it applied improperly fettered its statutory discretion with respect to costs. [21] The Board did not fail to consider the indemnity principle with respect to costs, but decided that routine awards of costs would not be appropriate in the particular context of assessment appeals. This was an approach within the discretion as to costs conferred on the Board and I see no reason to interfere with it. [22] I do not agree with Homco’s submission that the Board’s costs rules are ultra vires as being inconsistent with s. 28 of the Utility and Review Board Act, S.N.S. 1992, c. 11. The rules, which provide for discretion in certain circumstances, are not inconsistent with the general discretion with respect to costs conferred by the Act. I do not agree with Homco’s suggestion that the Board fettered its discretion by applying a rule that it would never award costs short of some type of misconduct by the other party. The Board carefully considered each of the bases advanced by Homco in support of its request for costs and, having done so, exercised its discretion against making the award. The Board made no reviewable error in doing so. It is not necessary to decide whether, as the Director submits, ss. 87(2) and 82 of the Assessment Act limit the general discretion of the Board to award costs under s. 28 of its Act. [23] As announced at the hearing, the costs appeal is dismissed. C. Costs of This Appeal: [24] As these are both Tribunal appeals and given that success has been divided, I would make no order as to costs with respect to either appeal. V. DISPOSITION: [25] The appeals by both the Director and by Homco are dismissed without costs. Cromwell, J.A. Concurred in: Roscoe, J.A. Fichaud, J.A.