MORGUARD INVESTMENTS LIMITED AND COQUITLAM CENTRE ASSESSOR OF AREA 12 - COQUITLAM. SUPREME COURT OF BRITISH COLUMBIA (L040092) Vancouver Registry

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1 The following version is for informational purposes only, for the official version see: for Stated Cases see also: for PAAB Decisions SC 479 Morguard Investments Limited et al v. AA12 Link to Property Assessment Appeal Board Order Quick Link to Stated Case #479 (BCCA) MORGUARD INVESTMENTS LIMITED AND COQUITLAM CENTRE v. ASSESSOR OF AREA 12 - COQUITLAM SUPREME COURT OF BRITISH COLUMBIA (L040092) Vancouver Registry Before the HONOURABLE MR. JUSTICE SCARTH (in chambers) Date and Place of Hearing: September 8-9, 2004, Vancouver, BC Peter W. Klassen for the Assessor of Area 12 - Coquitlam James D. Fraser for Hudson's Bay Company and Zellers Inc. Leah Greathead for the Property Assessment Appeal Board "Person(s) Affected" by a Decision of the Board This appeal was filed by Hudson's Bay Company and Zellers Inc., the two "anchor" tenants of a shopping mall known as the Coquitlam Centre. Two questions were asked of this court: 1. Was the Property Assessment Appeal Board required to determine as a prerequisite to filing this Stated Case with the court registry of the Supreme Court pursuant to section 65(4) of the Assessment Act the threshold question of whether the Hudson's Bay Company and Zellers Inc. are, in the circumstances of this Stated Case, "person(s) affected by a decision of the board on appeal" within the meaning of s. 65(1) of the Act and therefore entitled to "require the board to refer the decision to the Supreme Court for appeal on a question of law alone in the form of a stated case"? 2. Whether or not the Board was required to decide the threshold question before filing this stated case with the court registry, are the Hudson's Bay Company and Zeller Inc. in the opinion of the Court "person(s) affected" within the meaning of s. 65(1) of the Act? HELD: Appeal Allowed. This court found that insofar as the Coquitlam Centre is concerned, the municipality in which it is situate, the City of Coquitlam, imposes taxes against the lands and improvements of the Centre. The assessed value of those lands and improvements, as determined pursuant to the Assessment Act, is a factor in establishing the amount of those taxes. Clearly, the owner of the lands and improvements, here Morguard Investments Limited, is a person affected by a change in the assessed value of the lands and improvements and hence by a decision of the Board on appeal. The owner must, of course, pay the property taxes imposed against its lands and improvements or run the risk of losing its property. The Hudson's Bay Company and Zellers Inc., in this court's view, are not in a significantly different position. If they fail to pay the property taxes as part of their rent under their leases with the owner they run the risk of losing their leasehold interests in the lands and improvements. They too are affected by a change in the assessed value of those lands and improvements and hence by a decision of the Board on appeal. page 1

2 The chambers judge found that in the circumstances of this Stated Case, Hudson's Bay Company and Zellers Inc. are "person(s) affected by the decision of the board on appeal" within the meaning of s. 65(1) of the Assessment Act. Reasons for Judgment September 30, 2004 [1] This proceeding is an appeal by way of Stated Case under s. 65 of the Assessment Act, R.S.B.C. 1996, Chap. 20, by Hudson's Bay Company and Zellers Inc., the two "anchor" tenants of a shopping mall known as the Coquitlam Centre, from certain decisions of the Property Assessment Appeal Board relating to the 2001, 2002 and 2003 property assessments for the Centre. [2] At this stage of the proceedings two preliminary issues require determination by the Court: 1. Was the Property Assessment Appeal Board required to determine as a prerequisite to filing this Stated Case with the court registry of the Supreme Court pursuant to s. 65(4) of the Assessment Act the threshold question of whether the Hudson's Bay Company and Zellers Inc. are, in the circumstances of this Stated Case, "person(s) affected by a decision of the board on appeal" within the meaning of s. 65(1) of the Act and therefore entitled to "require the board to refer the decision to the Supreme Court for appeal on a question of law alone in the form of a stated case". 2. Whether or not the Board was required to decide the threshold question before filing this Stated Case with the court registry, are the Hudson's Bay Company and Zellers Inc. in the opinion of the Court "person(s) affected" within the meaning of s. 65(1) of the Act. [3] Under the statutory scheme of the Assessment Act the Assessor, by December 31 st of each year, for the geographic area of the province assigned to him by the Assessment Commissioner, must complete a new assessment roll in respect of each property liable to assessment for the purpose of taxation during the following calendar year and mail a notice of assessment to each person named in the assessment roll. Complaints by a person with respect to the assessment roll which are not otherwise resolved under the Act are dealt with in accordance with Part 4 of the Act by a Property Assessment Review Panel. A person dissatisfied with a decision of a review panel may appeal the decision under Part 6 of the Act to the Property Assessment Appeal Board. An appeal from a decision of the Board on a question of law alone lies to this Court at the instance of "a person affected by a decision of the board on appeal", amongst others, under s. 65 of the Act. Section 65 is fundamental to the issues presently before the Court. It reads: 65. (1) Subject to subsection (2), a person affected by a decision of the board on appeal, including a local government, the government, the commissioner or an assessor acting with the consent of the commissioner, may require the board to refer the decision to the Supreme Court for appeal on a question of law alone in the form of a stated case. (2) Within 21 days after receiving the decision referred to in subsection (1), the person must deliver to the board a written request to refer the decision to the Supreme Court, and include in the request the question of law to be referred. (3) On receipt of the request under subsection (2), the board must promptly provide written notice of the request to (a) the parties to the appeal from which the reference is requested and any intervenors, and (b) the commissioner, if the commissioner was not a party. page 2

3 (4) Within 21 days after receiving the request under subsection (2), the board must file the stated case with the court registry, including the decision on appeal, a statement of the facts and all evidence material to the stated case. (5) The stated case must be brought on for hearing within one month from the date on which it is filed under subsection (4). (6) Subject to subsection (7), the court must hear and determine the stated case and within 2 months give its decision. (7) The court may send the stated case back to the board for amendment and the board must promptly amend and return the stated case for the opinion of the court. (8) The costs of, and incidental to, a stated case under this section are at the discretion of the court. (9) An appeal on a question of law lies from a decision of the Supreme Court to the Court of Appeal with leave of a justice of the Court of Appeal. (10) The board must direct the assessor to make any amendment to the assessment roll necessary to give effect to a decision made by the Supreme Court or the Court of Appeal under this section. I have added emphasis to the words in subsection (1) which are particularly germane to the present issues. 1. Was the Property Assessment Appeal Board required to determine whether the Hudson's Bay Company and Zellers Inc. are "person(s) affected" by the Board's decisions within the meaning of s. 65(1) of the Act before filing this Stated Case with the Court Registry? [4] The Board declined to decide whether the Hudson's Bay Company and Zellers Inc. are "person(s) affected" or not. The Board ruled that this is a matter for the Court to decide. [5] The position of the Assessor of Area 12 - Coquitlam at the hearing before me is that it is the Board's duty, and not the Court's, to determine as a threshold issue whether a proposed Appellant seeking to require the Board to file a Stated Case pursuant to s. 65 of the Act is a "person affected" within the meaning of the section. The Assessor says that if the Board determines that the proposed Appellant is not a "person affected", the Board is without jurisdiction to state the case and the proposed Appellant may seek judicial review of the Board's decision on the question of whether the proposed Appellant is a "person affected". [6] The position of the Hudson's Bay Company and Zellers Inc. before the Court is that the Board was correct in its interpretation of s. 65 as intending to provide a statutory appeal from a Board decision to this Court, and that it lies with the Court, not the Board, to determine the question of whether a proposed Appellant is a "person affected by a decision of the board on appeal", and any other question of compliance with s. 65. [7] The Property Assessment Appeal Board was represented by counsel, Ms. Greathead, at the hearing before the Court on the two preliminary issues but, quite properly in my view, took no position on either of the issues before the Court. It is helpful, however, to set out the reasons for the Board's decision dated January 13, 2004 on the question of whether the Board or the Court ought to decide the jurisdictional issue of whether the Hudson's Bay Company and Zellers Inc. are "persons affected". The Board's reasons are as follows: The Board has received a Requirement to State a Case from its decisions in these appeals from Hudson's Bay Company and Zellers Inc. (the Bay and Zellers). Mr. Houston submits the page 3

4 Board does not have jurisdiction to state the case because the Bay and Zellers are not "a person affected" within the meaning of section 65 of the Assessment Act. Mr. Fraser submits this is an issue for the Court's jurisdiction, not the Board's, and in any event that the Bay and Zellers are "persons affected". Section 65(1) of the Assessment Act provides that "... a person affected by a decision of the board on appeal,... may require the board to refer the decision to the Supreme Court for appeal on a question of law alone in the form of a stated case." The Act then goes on to prescribe timelines for the board to state the case and for the Court to hear it. Mr. Houston submits the Board only has jurisdiction to state the case if the person requiring it is a "person affected". If this is so, the Board would be required to determine, when it is in dispute, whether an applicant is a "person affected". While section 65 is worded in such a way so as to suggest that it is for the Board to make this determination, in my view its intent is really to provide a right of appeal to the Supreme Court, on a question of law, from a decision of the Board to "a person affected". Whether someone is a "person affected" is, therefore, a matter affecting the Supreme Court's jurisdiction to hear the appeal. The jurisdiction of the Supreme Court to entertain the appeal is an issue for the Court's determination. Even if the question of whether someone is a "person affected" entitling them to require the Board to state a case is a matter within the Board's jurisdiction, the Board's decision on this point would, of course, be reviewable, on a standard of correctness, by the Supreme Court in any event. Further, in order to make this determination, the Board may require, as it would in this case, evidence from the parties as to how the applicant is alleged to be affected by the Board's decision. It simply makes more sense, that when the standing of an applicant to require an appeal is disputed, that issue be determined by Court who must ultimately determine the appeal, and not the Board. I further rely on the Court's decision in GDP Investments Ltd. v. Assessor of Area 05 - Port Alberni, 1998 Stated Case 417, in concluding that issues of compliance with section 65 are not within the Board's jurisdiction but are matters for the Court. I find, therefore that the Board must state the case, and the issue of whether the Bay and Zellers are persons affected is a matter for the Court's jurisdiction. I make no finding in that regard. [8] The facts relevant to this issue are as follows. [9] Hudson's Bay Company and Zellers Inc. are anchor tenants in the shopping centre known as The Coquitlam Centre under separate leases in writing. These leases amongst other things oblige Hudson's Bay Company and Zellers Inc. to pay the landlord the realty taxes attributable to the premises respectively leased to each of them. Although the parties to the leases are required to attempt to obtain separate notices of assessment for each of the demised premises from the British Columbia Assessment Authority, Mim Quigley, of the Assessment Authority, deposes in her affidavit that The Coquitlam Centre is assessed under one assessment notice for the entirety of the land and improvements and that the Assessment Authority does not, and cannot, issue separate assessment notices for the premises respectively occupied by Hudson's Bay Company and Zellers Inc. Although the Assessment Authority does not send notices of assessment to tenants such as Hudson's Bay Company and Zellers Inc., but instead sends the notices to the owner(s) of the property, the assessed values are publicly available online from January 1 st each year. According to Ms. Quigley, "... to the extent that the Notices of Assessment may obligate tenants to pay taxes, that is a private matter between the landlord and tenant". page 4

5 [10] The owners of The Coquitlam Centre, Morguard Investments Limited and Coquitlam Centre, appealed their real property assessments for the assessment years 2001 to 2003 to the Property Assessment Appeal Board. [11] Neither Hudson's Bay Company nor Zellers Inc. filed its own appeal of the assessments or appeared as a party in the proceedings before the Board. As Frank S. Zinner, Senior Manager of Real Estate Assessments for the Hudson's Bay Company and Zellers Inc., deposes in his affidavit: Normally Hudson's Bay and Zellers do not appeal the original Notices of Assessment of shopping centres in which they are tenants unless they are made aware of a significant change in the assessment from the previous year that could result in increased property taxes for their premises. [12] According to Mr. Zinner, Hudson's Bay Company and Zellers Inc. were not provided by the landlord or the British Columbia Assessment Authority with copies of the original notices of assessment for The Coquitlam Centre in 2001 through 2003 prior to the January 31 st deadline for appealing the assessment to the Property Assessment Review Panel or with the decision of the review panel prior to the April 30 th deadline for appealing the decision to the Property Assessment Appeal Board. Neither Hudson's Bay Company nor Zellers Inc. appealed the 2001 through 2003 assessments to a review panel or the Board or appeared as a party in the proceedings before either tribunal. [13] Between October 16, 2001 and February 11, 2003 the Board conducted appeal management conferences with respect to the owners' appeals from the decision of the Property Assessment Review Panel in respect of the 2001 through 2003 assessments. As a result the owners and the Assessor of Area 12 - Coquitlam resolved the assessment appeals by way of joint recommendations to the Board dated July 16, 2003 for the amendment of the 2001 through 2003 assessment rolls for Coquitlam Centre. The Board accepted the recommendations and issued its decision and order in respect of the 2001 assessment roll on July 22, 2003 and in respect of the 2002 and 2003 assessment rolls on July 24, [14] Under date of November 7, 2003 Hudson's Bay Company and Zellers Inc. were informed by Katie Takacs, Retail Manager of Coquitlam Centre for Morguard Investments Limited, that settlements of the 2001 through 2003 appeals of Coquitlam Centre had resulted in a total increase in property taxes attributable to Hudson's Bay Company for the three year period of $35,651 plus GST and in a total increase in property taxes attributable to Zellers Inc. for the same period of $30,310 plus GST. [15] Through their solicitors Hudson's Bay Company and Zellers Inc. requested from the Property Assessment Appeal Board copies of its decisions and orders relating to the settlement of the 2001 through 2003 appeals. On December 23, 2003 Hudson's Bay Company and Zellers Inc. forwarded to the Board a requirement to state a case pursuant to s. 65 of the Assessment Act. [16] The Assessor of Area 12 - Coquitlam took the position the Board did not have the jurisdiction to state the case on the ground Hudson's Bay Company and Zellers Inc. were not "person(s) affected" within the meaning of s. 65(1) of the Act. Hudson's Bay Company and Zellers Inc. took the opposite position. The Board, for the reasons set out in its decision of January 13, 2004, quoted infra, stated that it was for the Court and not the Board to decide whether Hudson's Bay Company and Zellers Inc. were "person(s) affected" within the meaning of s. 65(1) of the Act and thus whether the Court has the requisite jurisdiction to entertain the appeal. In the result the Board stated the case in which it submitted the following question for each of the 2001, 2002 and 2003 assessments: 1. Did the Board err in law by acting without any evidence, or on a view of the facts that cannot reasonably be entertained, in accepting the recommendation of the Appellants page 5

6 and Respondent as the basis of the actual value of the subject property for the 2001 assessment? [17] On behalf of the Assessor of Area 12 - Coquitlam Mr. Klassen submits that apart from a local government, the government, the commissioner or an assessor acting with the consent of the commissioner, s. 65 of the Assessment Act gives only a "person affected by a decision of the board on appeal" the right to require the Board to state a case. It is a condition precedent to the stating of a case that the applicant is a "person affected". This requirement is jurisdictional, and unless the applicant is a "person affected" the Board is neither compelled nor permitted to state the case requested. In essence, it is argued, unless the applicant is a "person affected" the Board would lack jurisdiction to state a case. [18] Mr. Klassen refers to Rex v. Moroz (1945), 83 C.C.C. 239 (Man. C.A.), in which Mr. Justice Bergman, at p. 258, wrote: Conditions precedent to right of appeal by stated case. It is, perhaps, unnecessary to point out that the right of appeal by way of stated case is entirely a creature of statute. Strict compliance by the appellant with the provisions of s. 761 of the Criminal Code and the Rules of Court is, therefore, a condition precedent to the right of appeal and cannot be waived by the parties or justices:... Mr. Justice Bergman then set out the procedure to be followed in an appeal by way of Stated Case at p. 258 of his reasons in these words and noted that the requirements go to the jurisdiction of the court to entertain the appeal: The first step in an appeal by way of stated case is a written application to the Magistrate to state a case. The procedure to be observed on the application for a stated case is clearly and explicitly set out in s. 761 of the Criminal Code and in Rule 1 of our Rules of Court, and is as follows: The aggrieved party must apply to the Magistrate whose proceedings are complained of (1) to state and sign a case setting forth the facts of the case and the grounds on which the proceeding is questioned; (2) the application must be in writing; (3) it must be delivered to the Magistrate within seven clear days after the making of the conviction or other proceeding questioned; and (4) it must state the grounds on which the proceeding is questioned. These requirements are jurisdictional; and, unless they are complied with, there is no jurisdiction to entertain the appeal, even though the Magistrate may have acted on the application and stated a case which is sufficient both in form and substance:... [19] Mr. Klassen submits that the application for a Stated Case here was made to the Board under s. 65 of the Assessment Act. It is the Board that was required to state the case if it had the jurisdiction to do so. The Board, it is argued, can only state the case if it has jurisdiction, and that jurisdiction is lacking if the request to state the case is made by someone other than a "person affected by a decision of the board on appeal". Mr. Klassen refers to R. v. Dominik [1979] B.C.J. No. 433 (S.C.) as authority for the proposition that the Board has jurisdiction to enquire as to whether or not an applicant is a "person affected" and hence whether the Board has jurisdiction to state a case. In Dominik McEachern C.J.S.C. (as he then was) ruled that a Provincial Court Judge could refuse to state a case where the applicant had failed to enter into a recognizance as required by s. 86(1) of the Summary Convictions Act until the recognizance was perfected. [20] Mr. Klassen also cites Canadian Union of Public Employees, Local 30 v. Alberta (Public Health Advisory and Appeal Board), [1996] A.J. No. 48 (Alta. C.A.) as an instance in which the Public Health Advisory and Appeal Board was held to have correctly decided that the Appellants were not directly affected by the decision of the Edmonton Local Board of Health and thus had no right of appeal. page 6

7 [21] Mr. Klassen submits that the Assessment Act provides a right of appeal only to those who are "person(s) affected". This, it is said, is a condition precedent to the engagement of the Board's power under s. 65 of the Act to state the case to the Supreme Court. [22] Mr. Klassen further submits that the Board's conclusion that s. 65 of the Assessment Act requires that the Court make the determination as to whether a person is a "person affected" within the meaning of s. 65 after the Board has stated the case demonstrates an apparent misunderstanding of the nature of the process of an appeal by way of Stated Case. It is fundamental, Mr. Klassen argues, that an appeal by way of Stated Case is not commenced in the Supreme Court but rather with the Board. As McEachern C.J.S.C. (as he then was) observed in Genstar Ltd. v. Mission (District), [1981] B.C.J. No. 493 (S.C.) at para. 15: Earlier I quoted some of the provisions of Section 74 [Assessment Act, R.S.B.C. 1979, Ch. 21]. Those provisions make it clear that proceedings directed towards an appeal against a decision of the Assessment Appeal Board is not commenced in this Court. There must first be a written request to the Board to state a case. Thereafter the Board shall (must) submit the case in writing to the Court, and it is that case together with a certified copy of the evidence, which is filed with the Court. [my emphasis] [23] Mr. Klassen argues that because an appeal by way of Stated Case commences with the Board and not the Court it is the Board's duty to determine whether in the circumstances before it the proposed Appellant is a "person affected" or not. If the proposed Appellant is not a person affected then the Stated Case is not brought in accordance with the provisions of the Act. The question, Mr. Klassen submits, is not whether the Court has the jurisdiction to hear the Stated Case, but rather whether the Board had the jurisdiction to accept the request and state the case in the first instance. [24] Mr. Klassen, in his oral submissions, told the Court that it is not the position of the Assessor of Area 12 - Coquitlam that the Board has the sole jurisdiction to decide if an applicant is a "person affected". The Assessor's position, Mr. Klassen stated, is that both the Board and the Court have such jurisdiction. Nonetheless, it is more efficacious to have the Board make the determination. The Board is closer to the evidence in the first instance. If the Board refuses to state a case on the basis the Applicant is not a person affected there can be a judicial review of that decision by the Court. If a case is stated for a person who is not affected by a decision of the Board on appeal then the entire appeal process and case stated are a nullity and the Court will so rule. [25] In short, Mr. Klassen submits that there is a duty on the Board to make the determination in the first instance as to whether the applicant for a Stated Case is a "person affected" and not just leave that issue for determination by the Supreme Court. [26] On behalf of the Hudson's Bay Company and Zellers Inc. Mr. Fraser submits that the Board is a creature of statute and has only the powers conferred by the Assessment Act and any other enabling legislation. [27] Under s. 65 of the Act, Mr. Fraser says, the Board must state a case to the Supreme Court from a final order of the Board where required under that section to do so. It is not, as contended by the Assessor of Area 12 - Coquitlam, implicit in s. 65 that the Board has jurisdiction to determine if an applicant is "a person affected by a decision of the board on appeal". To the contrary, it is argued, s. 65 prescribes in plain terms the administrative jurisdiction of the Board over a Stated Case. Other than the duties to prepare and file the Stated Case with the Court, to amend the Stated Case under s. 65(7) when required by the Court to do so, and to give effect to the decision of the Court pursuant to s. 65(10), s. 65 confers on the Board no jurisdiction, express or implied, over the appeal process. page 7

8 [28] Mr. Fraser submits that "the Board can no more pronounce on the validity of the requirement to state a case under s. 65 of the Act (and thus the jurisdiction of the Supreme Court to entertain that appeal) than can the Supreme Court pronounce on the validity of an appeal from its Order to the Court of Appeal". Although, it is argued, the requirement to state a case originates with the Board, the intent of s. 65 is to create a statutory appeal on a question of law alone to the Court from the decision of the Board on appeal. The jurisdiction to determine compliance with the legislative provisions relating to an appeal by way of Stated Case, and the jurisdiction of the appellate court to hear such an appeal, lie exclusively with the appellate court, it is said. [29] Referring to George E. Mellor v. Harbour Park Developments et al (1970), Stated Case 67 (B.C.C.A.), Anchor Ventures Inc. v. Assessor of Area 04 - Nanaimo/Cowichan (1987) Stated Case 263 (B.C.C.A.), and GDP Investments Ltd. v. Assessor of Area 05 - Port Alberni (1998) Stated Case 417 (S.C.B.C.), Mr. Fraser states that the Court, and not the Board, has invariably determined its jurisdiction to entertain a Stated Case where compliance with s. 65 of the Act is in issue. In GDP Investments Madam Justice Gill, in delivering reasons for judgment on November 18, 1998, referred to s. 63(3) of the Assessment Act, which provides that a "person affected" may require the Board to submit a case by delivering to the Board within 21 days of receiving the decision a written request to state a case, and said this at p of her reasons:... Section 63 of the Act sets out the procedure to be followed in respect of appeals to this court and it is not for the Board to decide whether there has been compliance with s. 63(3). The court is surely able to consider and decide whether there has been a failure to comply with s. 63(3) and whether jurisdiction is therefore lacking without the necessity of a specific question being included in the Stated Case. [30] In GDP Investments the Respondent Assessor sought to have the Court remit the Stated Case to the Board for amendment so that amongst other things the Stated Case would include the following question: Does the Supreme Court have jurisdiction to hear the Stated Case when the Appellant has failed to comply with the requirements of s. 63(3) of the Assessment Act. [31] Mr. Fraser submits that the decisions relied upon by the Assessor of Area 12 - Coquitlam in support of the Assessor's interpretation of s. 65 are not of assistance. [32] Rex v. Moroz speaks not of the Magistrate's jurisdiction to state a case (the issue here), but rather of the "jurisdiction [of the court] to entertain the appeal, even though the Magistrate may have acted on the application and stated a case which is sufficient both in form and substance". Although not in issue in the Moroz case, the governing legislation (s. 763 of the Criminal Code) permitted a magistrate to refuse to state a case and issue a certificate of this refusal. No comparable provision exists in s. 65 of the Assessment Act, it is said, and none ought to be read into the statute. [33] So too in R. v. Dominik, the decision was premised on the specific statutory provisions of s. 86(1) of the Summary Convictions Act which conferred jurisdiction on the Provincial Court Judge to determine if the recognizance required by that section had been perfected before stating the case. No equivalent jurisdiction has been conferred on the Board by s. 65 of the Assessment Act, it is said, and none can be implied. [34] Nor, it is submitted, does the Genstar decision assist the Court in the interpretation of s. 65 of the Assessment Act. The issue in Genstar was not the issue in the case at bar: which of the Board or the Court must determine if the preconditions to filing a Stated Case have been met. [35] In practical terms, Mr. Fraser suggests, the Board is not in a better position than the Court to deal with the threshold issue of whether the applicant for a Stated Case is a person affected given that the applicant may be a stranger to the appeal before the Board. Moreover, the 21 day period under s. 65(4) of the Act for the Board to file the Stated Case with the Court after receiving page 8

9 a requirement to do so may be difficult if not impossible for the Board to comply with if it is necessary to receive evidence and/or hold a hearing with respect to the threshold issue. [36] In short, Mr. Fraser submits, the Board's decision in stating the case without deciding whether Hudson's Bay Company and Zellers Inc. are "person(s) affected by a decision of the board on appeal" should be affirmed by the Court. [37] The Board, it is said, was correct in its interpretation of s. 65 as intending to provide a statutory appeal from a Board decision to the Supreme Court, and that it lies with the Court, and not the Board, to determine the question of whether an applicant is "a person affected by the decision of the board on appeal" and any other questions of compliance with s. 65. The Board, it is submitted, correctly applied GDP Investments Ltd. v. Assessor of Area 05 - Port Alberni, supra, which is consistent with the practice of appellate courts to determine their jurisdiction. [38] In my judgment the Board was required to decide whether the applicants for the Stated Case, Hudson's Bay Company and Zellers Inc., were "persons affected by the decision of the board on appeal" prior to filing the Stated Case with the court registry. [39] In reaching this conclusion it is necessary to keep in mind the principle that the Board, being a creature of statute, has only those powers specifically conferred upon it by the legislature and which are reasonably incidental to the exercise of those powers. Thus, it is fundamental to identify what it is the Board is empowered to do by the legislation creating it. One such power is to refer the decision of the Board on appeal from a decision of a review panel to the Supreme Court for appeal on a question of law alone in the form of a Stated Case when required by, amongst others, a person affected by the Board's decision. [40] Unlike an appeal from a decision of this Court to the Court of Appeal, an appeal from a decision of the Board is commenced by delivering to the board a written request to refer the decision to the Supreme Court: s. 65(2) of the Assessment Act. Plainly, only the Board, and not the Court, has the jurisdiction to state a case. Moreover, the Board has jurisdiction to state a case under s. 65 of the Act only if required to do so by a person affected by its decision or by one of the other entities mentioned in s. 65(1). In determining if the applicant for a Stated Case falls within the group entitled to require the Board to state a case under s. 65 the Board is not usurping this Court's role of deciding whether it has jurisdiction to hear the Stated Case; it is determining whether the Board is required, and hence has the jurisdiction, under the Act to state the case; albeit the Board and the Court, in performing their respective functions, may be required to address the same issue, namely, is the applicant for the Stated Case a person affected by the Board's decision. [41] It follows that I respectfully disagree with the conclusion of the Board that it must state the case and leave the issue of whether the Hudson's Bay Company and Zellers Inc. are persons affected for the Court's determination as a matter of the Court's jurisdiction. 2. Are the Hudson's Bay Company and Zellers Inc. "person(s) affected" within the meaning of s. 65(1) of the Act? [42] The Board declined to make a finding with respect to this issue. [43] The Respondent Assessor of Area 12 - Coquitlam submits that in the circumstances of this Stated Case Hudson's Bay Company and Zellers Inc. are not "person(s) affected" as contemplated by s. 65(1) of the Assessment Act. [44] On the other hand Hudson's Bay Company and Zellers Inc. submit that they fall squarely within the scope of those intended to have a right of appeal under s. 65 of the Act. page 9

10 [45] The facts relating to this issue are sufficiently set out in the section of these reasons dealing with the first issue. [46] For the sake of convenience I again set out s. 65(1) of the Assessment Act: 65 (1) Subject to subsection (2), a person affected by a decision of the board on appeal, including a local government, the government, the commissioner or an assessor acting with the consent of the commissioner, may require the board to refer the decision to the Supreme Court for appeal on a question of law alone in the form of a stated case. [47] The words "person affected" found in s. 65(1) are not defined in the Act. Nor is a tenant, or for that matter the owner of the land and improvements, specifically mentioned in s. 65(1) as one of those entitled under s. 65 to require the Board to state a case. [48] I am told by counsel that the question of whether a tenant in the position of Hudson's Bay Company or Zellers Inc. is a "person affected" within the meaning of s. 65(1) has not been squarely dealt with by the courts. [49] Mr. Fraser has drawn my attention to the judgment of Mr. Justice Seaton, at the time a judge of this Court, in George E. Mellor v. Harbour Park Developments Ltd., (1970) Stated Cases No. 67 (S.C.B.C.). In that case the Appellant, who did not claim any interest in the land but was merely a resident of Vancouver and presumably a taxpayer, purported to appeal a decision of the Board under s. 51(2) of the Assessment Equalization Act, R.S.B.C. 1960, chap. 18 which provided as follows: any person affected by the decision of the Board may appeal. In concluding that an appeal was not open to the Appellant, Mr. Justice Seaton said this at p. 327 of his reasons: This is essentially a question of statutory interpretation. Considering the purpose of the Statute, the words used, and the context in which they are used, I would conclude that the appellant is not a person affected by the decision, as it does not subject him to actual or threatened injury or benefit, and does not alter or change his rights or his property. [50] Mr. Klassen has invited the Court's attention to the decision of Mr. Justice Lowry, at the time a judge of this Court and now of the Court of Appeal, in Assessor of Area 08 - North Shore/Squamish Valley v. Joan Anne Wedley et al, 2000 BCSC The issue in that case was whether GST paid on newly constructed homes was to be included in estimating the actual value of a new residential property for assessment purposes given that GST is not payable when such homes are resold. On an appeal from the Property Assessment Appeal Board under the Assessment Act, R.S.B.C. 1996, c. 20, the Assessor raised a preliminary objection to the participation of the Respondents other than the Wedleys on the basis that they were not persons affected and thus had no standing. At pp. 2-3 of his reasons Mr. Justice Lowry said this: [6] At the outset of the hearing, the Assessor took objection to the participation of several property owners, other than the Wedleys who are named as respondents, on the ground that they are without status. Some of them have outstanding challenges to their own assessments, but none had any involvement in this matter before the Board. I ruled that they were without status and could not be heard. [7] The proceedings are governed by the Assessment Act, R.S.B.C. 1996, c. 20. Section 32 provides that "a person" may make a complaint to what is now a Property Assessment Review Panel (formerly a Court of Revision) against an individual entry in an assessment roll on any of five stipulated grounds, one of which is that land and improvements, or both, are not assessed at actual value. Section 56(1) provides that "a person" may appeal to the page 10

11 Board if that person is dissatisfied with a decision of a review panel. By contrast, s. 63(3) provides that "[a] person affected by a decision of the Board" may require the Board to refer the decision to the Supreme Court on a question of law alone in the form of a stated case. [8] In my view, while the statute provides for complaints to a review panel and appeals to the Board being taken by others, it is only the Wedleys, the owners of the subject property, who can be said to be affected by the decision of the Board, and only they who can appeal to this court. To be a person affected by the decision one must have a personal interest in the subject-matter, not a mere public interest. His or her rights in respect of the property assessed must be affected by the decision: Mellor v. Harbour Park Developments Ltd. et al., [1970] B.C. Stated Case No. 67 (S.C.) affm'd and GDP Investments Ltd. v. Assessor of Area 05 - Port Alberni, (21 May 1999), Vancouver A (S.C.). It is then only the Wedleys who have standing to be heard on this appeal. [51] In Yorke v. Vancouver Assessor, Area No. 9 (1992), 70 B.C.L.R. (2d) 135 (S.C.), Mr. Justice Parrett considered the meaning of the phrase "any other person affected by the appeal" in s. 68(6)(b) of the Assessment Act, R.S.B.C. 1979, c. 21. Parrett J. described the legislation at p. 140 in these words: Part 7 of the Act deals with the conduct of appeals to the Assessment Appeal Board from the Court of Revision. In order to be a party to the appeal a person must be one of the persons specified in s. 68(4), "(a) the owners of the property; (b) the assessor; (c) the municipality, if any, in which the property is located; (d) the commissioner; (e) the complainant at the Court of Revision, if that person is not a person referred to in paragraphs (a) to (d)" or come within the provisions of s. 68(6)(b) which reads: (b) any other person affected by the appeal who is accepted as a party by the board or the panel or member conducting the appeal. At p. 142 Mr. Justice Parrett wrote the following concerning s. 68(6)(b):... When viewed in the context of the legislative scheme as a whole it is intended that such persons be individuals, organizations or representatives not enumerated in s. 68(4) who are subject to actual or threatened injury or benefit arising from alterations or possible alterations to their rights or property. To come within the section it is not sufficient to demonstrate merely a public interest which that person holds in common with the general public.... [52] In Musqueam Holdings Ltd et al v. Assessor of Area 09 - Vancouver (1996) Stated Case No. 391 the majority of a three person panel of the Assessment Appeal Board inclined towards a broad interpretation of the words "person affected by the appeal" in s. 68(6)(b) of the Assessment Act, set out infra, which enables, rather than limits, participation before the Board, whilst the dissenting member adopted a narrower interpretation and wrote that in her opinion:... the applicants must have a "financial or substantive interest" in the outcome of this appeal and that they must be subject to "actual or threatened injury or possible alteration to their rights or property" as a direct result of this decision in order to be a party.... [emphasis in original] [53] On behalf of the Respondent Assessor of Area 12 - Coquitlam Mr. Klassen submits that by using the phrase "person affected" in s. 65(1) of the Assessment Act the legislature intended to greatly narrow those who can avail themselves of the right to require the Board to state a case. Whilst under s. 32 of the Act "a person" such as a tenant may make a complaint against an individual entry in an assessment roll for review and consideration by a review panel, and under s. 50 "a person" may, if dissatisfied with a decision of a review panel, appeal to the Board, it is only "a person affected" by the decision of the Board who has the right of appeal under s. 65. page 11

12 [54] Mr. Klassen submits that in this case the Hudson's Bay Company and Zellers Inc. are not "person(s) affected" by the decision of the Board within the meaning of s. 65. The decision of the Board does not directly impact Hudson's Bay Company or Zellers Inc. in that the only entity liable to assessment and taxation under the Act is the owner of the Centre, Morguard Investments Limited. To the extent the Hudson's Bay Company and Zellers Inc. may be liable for the payment of tax under their leases with Morguard Investments Limited, that is a matter of contract between those parties. These tenants, it is argued, are not "affected by the decision of the Board by virtue of the operation of the Assessment Act; they are affected if at all as a private matter between them and the owner. [55] Referring to the words of Mr. Justice Seaton in George E. Mellor v. Harbour Park Developments Ltd., supra, at p. 327: I would conclude that the appellant is not a person affected by the decision, as it does not subject him to actual or threatened injury or benefit, and does not alter or change his rights or his property. Mr. Klassen submits that neither Hudson's Bay Company nor Zellers Inc. is subjected to actual or threatened injury or benefit in that the decision of the Board does not affect either of them - it affects Morguard Investments Limited as the owner of the property. To the extent these tenants' taxes increase or decrease as a result of the Board's decision, that is a private matter arising out of contract and the decision of the Board does not affect either the Hudson's Bay Company or Zellers Inc. directly. The decision of the Board, it is said, imposes no burden on and provides no benefit to either tenant under the Act. [56] Referring to Assessor of Area 08 - North Shore/Squamish, supra, and the words of Mr. Justice Lowry at pp. 2-3, namely: To be a person affected by the decision one must have a personal interest in the subject matter, not a mere public interest. His or her rights in respect of the property assessed must be affected by the decision. Mr. Klassen submits that in this case Hudson's Bay Company and Zellers Inc. are not in any way for the purposes of the Assessment Act "person(s) affected". The decision of the Board imposes no liability nor confers any benefit upon either of these tenants. To the extent that the contract between the tenants and landlord gives rise to changes in the taxes, paid as additional rent to the landlord, in the context of the meaning of "person affected" that is a private matter completely outside of the scope of the Assessment Act and is to be resolved between the landlord and the tenants in accordance with the terms of their contracts. [57] Mr. Klassen further submits that including a tenant within the ambit of "a person affected" under s. 65 of the Act would run counter to the intent of the legislation which is to provide for the timely completion and certainty of assessment rolls. The Board is not required under s. 62(1) of the Act to deliver a notice of its decision on an appeal to a tenant unless the tenant was a party to the appeal before the Board or an intervenor, and thus a tenant who took no part in the proceedings before a review panel or the Board and who claims not to have received the decision for a protracted period after it was issued by the Board would have, under s. 65(2), 21 days from the receipt of the decision to request the Board to state a case if it is accepted that such a tenant falls within the meaning of "person affected" in s. 65(1). Multiple tenants would simply exacerbate the problem, it is said. In interpreting the statute, such an absurd result should be avoided, it is argued. [58] On behalf of Hudson's Bay Company and Zellers Inc. Mr. Fraser submits that they are "person(s) affected" by the decisions of the Board on appeal to accept the recommendations of the owners of The Coquitlam Centre and the Assessor of Area 12 - Coquitlam establishing the 2001 through 2003 assessments of the Centre. page 12

13 [59] Although there is no definition in the Assessment Act for the phrase "a person affected by a decision of the board on appeal", Mr. Fraser refers to George E. Mellor v. Harbour Park Developments, supra, at p. 327, and to the decision of Madam Justice Satanove delivered on May 21, 1999 in GDP Investments Ltd. v. Assessor of Area 05 - Port Alberni (1999) Stated Cases No. 417 (S.C.B.C.), at p , and submits that the courts have "invariably" found that a "person affected" is simply any person whom the decision of the Board subjects to actual or threatened injury or benefit or whose rights or property are altered or changed by the Board's decision. [60] Mr. Fraser submits that unlike ratepayers or others with a mere public interest as in the Mellor case, supra, or agents of Appellant taxpayers as in GDP Investments case, supra, Hudson's Bay Company and Zellers Inc., as tenants under lease in The Coquitlam Centre, whose property tax obligations to the landlord are legal rights determined by the assessments in question, and whose property taxes increased as a result of the changes in the 2001 through 2003 assessments accepted by the Board, plainly have a specific personal financial interest in the outcome of the appeals. The Board's acceptance of the recommendations establishing the assessments for 2001 through 2003 subjected Hudson's Bay Company and Zellers Inc. to actual injury in the sense of an unbudgeted increase in property taxes. The tax increases suffered by Hudson's Bay Company and Zellers Inc. as a result of the changes in the assessment accepted by the Board are real, and derive from the assessment of the Centre. Both Hudson's Bay Company and Zellers Inc., it is said, are affected by the Board's decisions on appeal within the meaning of s. 65(1) of the Act. [61] Mr. Fraser argues that there is no basis in the Assessment Act for drawing a "public"/"private" distinction between the City of Coquitlam and landlord of The Coquitlam Centre, on the one hand, and Hudson's Bay Company and Zellers Inc., on the other hand. The Act does not, it is said, distinguish between financial consequences arising "publicly", in the sense of the City imposing taxes on the landowner/landlord, and financial consequences arising "privately", in the sense of increases to the Bay's and Zellers' taxes under the terms of their leases. The fact a tenant's obligation to pay property taxes arises under its lease is of no consequence in determining whether that tenant is a "person affected" by the decision of the Board under s. 65 of the Act. The purpose of the Assessment Act is to provide the mechanism for ensuring determination by the Board of the correct and equitable classification and valuation of properties, including The Coquitlam Centre. The right to state a case from the Board's decision with respect to the assessment is one aspect of that mechanism. [62] Mr. Fraser submits that everyone liable to pay property taxes, whether by virtue of statute or under a lease, which are established by and change through the assessment of Coquitlam Centre, is "affected" by the Board's decision in respect of the Centre. The financial impact of the Board's decision on Hudson's Bay Company and Zellers Inc." is plainly within the ambit of "effects" contemplated by s. 65" of the Act, it is said. [63] In my judgment, in the circumstances of this Stated Case, Hudson's Bay Company and Zellers Inc. are "person(s) affected by the decision of the board on appeal" within the meaning of s. 65(1) of the Assessment Act. [64] Plainly the Act distinguishes between those entitled to complain against an entry in the assessment roll before a review panel, those entitled to appeal the decision of the review panel to the Board, and those entitled to appeal the Board's decision to this Court. The latter group is manifestly narrower than the first two: Assessor of Area 08 - North Shore/Squamish Valley v. Joan Anne Wedley et al, 2000 BCSC 1365, at para. 7. This does not, in my view, suggest that "a person affected" in s. 65(1) of the Act is restricted to an owner of the property in question or, conversely, that a tenant per se is excluded from the term "person affected". page 13

14 [65] One must, I think, look at the realities of the situation as they are presented in the factual matrix of this case. Insofar as The Coquitlam Centre is concerned, the municipality in which it is situate, the City of Coquitlam, imposes taxes against the lands and improvements pertaining to the Centre. The assessed value of those lands and improvements, as determined pursuant to the Assessment Act, is a factor in establishing the amount of those taxes. Clearly, the owner of the lands and improvements, here Morguard Investments Limited, is a person affected by a change in the assessed value of the lands and improvements and hence by a decision of the Board on appeal. The owner must, of course, pay the property taxes imposed against its lands and improvements or run the risk of losing its property. The Hudson's Bay Company and Zellers Inc., in my view, are not in a significantly different position. If they fail to pay the property taxes as part of their rent under their leases with the owner they run the risk of losing their leasehold interests in the lands and improvements. They too are affected by a change in the assessed value of those lands and improvements and hence by a decision of the Board on appeal. [66] I am unable to read into s. 65(1) of the Assessment Act a distinction between the imposition of taxes against the lands and improvements of Coquitlam Centre for which the owner is liable qua owner and for which these tenants are liable qua tenants. Both owner and tenants are persons affected by a decision of the Board on appeal. [67] Costs will be in the cause. SC 479cont Morguard Investments Limited et al v. AA12 MORGUARD INVESTMENTS LIMITED, COQUITLAM CENTRE, HUDSON'S BAY COMPANY, ZELLERS INC., and the PROPERTY ASSESSMENT APPEAL BOARD OF BRITISH COLUMBIA v. ASSESSOR OF AREA 12 - COQUITLAM BRITISH COLUMBIA COURT OF APPEAL (CA032346) Vancouver Registry Before the HONOURABLE MADAM JUSTICE ROWLES, the HONOURABLE MR. JUSTICE DONALD, and the HONOURABLE MADAM JUSTICE NEWBURY Date and Place of Hearing: November 17, 2005, Vancouver, BC P.W. Klassen for the Assessor of Area 12 - Coquitlam J.D. Fraser for Hudson's Bay Co. and Zellers Inc. "Anchor" Tenants "Person(s) Affected By An Appeal" Hudson's Bay Company (HBC) and Zellers Inc. are "anchor" tenants in Coquitlam Centre which is owned by Morguard Investments Limited. It is assessed as a whole, and not in the names of the various entities that lease and occupy the shopping centre premises. This is an appeal from the determination by a Supreme Court judge of one of two preliminary issues arising in connection with an appeal by way of Stated Case under section 65 of the Assessment Act. The discrete issue is the meaning of the phrase "a person affected by a decision of the board on appeal" as it appears in section 65(1), dealing with standing to bring an appeal on a question of law from the Property Assessment Appeal Board ("the Board") to the Supreme Court of British Columbia ("the BCSC"). The BCSC found that HBC and Zellers were "person(s) affected by the page 14