MUSSALLEM REALTY LTD. ASSESSOR OF AREA 13 - DEWDNEY/ALOUETTE. Supreme Court of British Columbia (A924114) 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 342 Mussallem Realty Ltd. v. AA13 Quick Link to Stated Case #342 (BCCA) MUSSALLEM REALTY LTD. v. ASSESSOR OF AREA 13 - DEWDNEY/ALOUETTE Supreme Court of British Columbia (A924114) Vancouver Registry Before the HONOURABLE MR. JUSTICE LEGGATT John R. Lakes for the Appellant John E.D. Savage for the Respondent Vancouver, January 29, 1993 Classification Class 9 - Farms - Leases - Production Requirements Horses - Breeding - s SCFR.5 The property in issue had received farm class for a number of years. The property received farm class as an integrated farm operation under section 5(2) of the Farm Class Standards (B.C. Reg. 298/85). The property was alleged to have contributed to a horse breeding operation some fourteen kilometres distant. The property was allegedly used to separate stallions from breeding mares and also was used to grow hay. The hay field was improved somewhat but a horse was kept on the property in the immediate past year for a period of only three to four weeks. This represented a decrease in activity from previous years. The Appellant argued that it was necessary to show the cessation of farm use to deprive a property of farm class. It was further argued that there was clearly use of the whole of the property as a farm since use only required intention, on the basis of the decision in Assessment Commissioner v. Robert McMinn (1981), B.C.S.C HELD: Appeal dismissed. 1. The property could only be part of an integrated farm operation if it is "necessary to the completeness of the whole". In the instant case, there was no reasonable contribution in that the Appellant's use of the subject property was minimal or negligible with respect to the integrated farm operation; 2. The use of the property for nearly a three week period during an entire year clearly illustrates inactivity and a cessation of farm use; 3. The harvesting of hay for use as bedding did not constitute primary agricultural production as it was not a direct use entitling the property to farm classification.

2 Reasons for Judgment March 9, 1993 The property involved in this appeal comprises a 5.72 acre commercially zoned parcel fronting on the Lougheed Highway and 203 Street in the western part of the District of Maple Ridge. Approximately 43,578 square feet is developed with a Burger King fastfood restaurant, and there is no dispute as to the value or classification of this part of the property. Of the remaining property 4,378 square feet is a fenced paddock area, 179,954 square feet is a fenced hayfield, and 21,253 square feet is covered in wild vegetation. The paddock and hayfield areas were initially classified by the Court of Revision as "Farm" with the balance classified as "Business and Other". This classification was agreeable to the Appellant, but the Respondent was of the opinion that the entire property should be classified as "Business and Other", or in the alternative, the paddock area should be classified as "Farm" and the remainder as "Business and Other". The entire property, except for the Burger King site, is leased from Mussallem Realty Ltd. to J.S. Albulet for three years from June 12, 1990, and had been previously leased to Mr. Albulet. The rent is stated to be for $1 and other valuable considerations. The lessor pays the property taxes. Mr. Albulet's home/farm is 14 km. distant from the property in question and receives the farm classification by virtue of a horse breeding operation. The "Farm" classification on part of the subject property was previously granted by virtue of the lease as being part of an integrated farm unit pursuant to section 5(2) of B.C. Regulation 298/85 - Standards for the Classification of Land as a Farm. Section 5(2) states: Land may be classified as a farm where (a) it consists of all or part of any parcel or group of parcels of land, contiguous or not, making up a tract of land owned or held under a written lease by a person singly or jointly with any other person or persons and operated as an integrated farm operation for primary agricultural production... The Board found from the evidence that there had been no grazing of livestock during the year preceding September 30, 1991 except within the paddock area and this differentiated from previous years when "Farm" classification was granted. Furthermore the Board found that the keeping of horses within the paddock area appears to have been no more than one horse kept for a period of 3 to 4 weeks September This constitutes a decrease in activity from previous years. It was the Board's opinion that while the hayfield may have been improved, and while it agreed that a hay crop cut in 1992 may initially demonstrate an increased activity since the evidence indicated no previous hay crops were cut, the hay was, however, of no value in the feeding of horses. The hay crop itself was not sufficient to generate sufficient income to qualify for "Farm" classification on its own. The Board further found that the requirements for operation as "an integrated farm operation for primary agricultural production" was not met by the Appellant notwithstanding that the parcels were not required to be contiguous. In the opinion of the Board the word "integrated" denotes a combined operation to make a complete farm and there was not sufficient use of the subject property to qualify for "Farm" classification. 1. Did the Assessment Appeal Board err in law and misinterpret section 8(1) of the Assessment Act Regulation, B.C. Regulation 298/85 (as amended) to deprive Mussallem Realty Ltd. its farm classification where the evidence did establish a farming use as an integrated farming operation and there was no evidence of cessation of farm use?

3 2. Did the Assessment Appeal Board err in law and act upon a view of the facts which could not reasonably be entertained by finding there was a "decrease in activity from previous years" to deprive Mussallem Realty Ltd. its farm classification despite the evidence that the land was used as an integrated farm operation during the year preceding September 30, 1991? 3. Did the Assessment Appeal Board err in law and act without any evidence or upon a view of the facts which could not reasonably be entertained by depriving Mussallem Realty Ltd. its farm classification where there was no evidence of any cessation of farm use but the evidence did establish a continuation of the farm use as part of an integrated farming operation? A) Mr. S.A. Didrikson, AACI - Area Assessor: The evidence of the Area Assessor was that he and his staff had made many inspections of the subject property and that the farm use had declined to a nominal level. The only evidence of horses being on the property was on September 27, 1991 when there was a single horse in the paddock area for a few weeks. Under cross-examination Mr. Didrikson agreed that the lessee was entitled to use the property as part of an "integrated" farm operation, but he felt that there must be a reasonable amount of contribution. Since this was not present, it was Mr. Didrikson's opinion that the only contribution to the home farm was nominal. B) Mr. Ron Townshend - Manager of the Farm and Forest Advisory Service for the B.C. Assessment Authority: It was his evidence that there was no indication of pasture use during the relevant year except that he had found evidence of old droppings in a February 1992 inspection of the paddock area. He considered that this was consistent with the September 27, 1991 time frame noted by the Assessor. He further stated that in his opinion he would expect to see a proper access and that the location next to a "Burger King" restaurant was unsuitable for the keeping of stallions. He also thought the presence of a ditch might be dangerous for horses. With respect to the hay yield, he considered the 187 bales cut in June 1992 was a low yield and included a lot of brush which was not ideal for horses. C) Mr. Albulet - Lessee of Property: He gave evidence that in the autumn of 1991 he needed to separate the stallions from the other horses, and since he was a part owner of the adjacent "Burger King", the subject property would be an ideal location for this use. He stated that he had used the property every year. In the first two years he had used the property all summer, but from July 1990 onwards he had used only the paddock area for 3 to 4 weeks per year. The reason for not utilizing the hay field was that it had been reseeded after soil was spread on the site from the "Burger King" construction in 1990 and the grass was not yet sufficiently established for grazing. He also stated that the hay was not suitable for horses and the field was best used for grazing. He also confirmed that he had not used the property since September It is the Appellant's submission that under section 28 of the Assessment Act, land classified as a "Farm" shall be valued at its actual value as a farm, without regard to its value for other purposes. It must meet the standards referred to in section 28(2) and, where it does so, the Assessor "shall classify as a farm that is in accord with the standards" [sic] (emphasis added). The standards for classification are found in B.C. Reg. 298/85 and include "breeding of horses for sale" which is described as follows:

4 "breeding of horses for sale" means that part of an operation directly involved with horse breeding and raising, but does not include an equestrian centre, the boarding of horses, or training of horses or pleasure horse riding operations; Section 5 provides that there can be an integrated farm operation where there is a lease on land operated as an integrated farm operation and that operation meets the other requirements of this regulation. The Appellant agrees that under section 8 land that ceases to be used for primary agricultural production on or before September 30 of the year preceding the year for which the assessment roll is prepared shall not be classified as a farm. Section 8(1) reads: Notwithstanding anything contained in this regulation, land that ceases to be used for primary agricultural production on or before September 30 of the year preceding the year for which the assessment roll is prepared shall not be classified as a farm. However, it is the Appellant's submission that the Assessor's evidence, as well as the Board's finding, is not based on "cessation of farming" but rather on an alleged "declining activity" of the use of the land for integrated farming. In short, the Appellant challenges the Board's finding that there was not sufficient use of the subject property to qualify for "Farm" classification. It is the Appellant's view that the Board clearly misinterpreted section 8(1) of the standards because it was not a finding that the land "ceased" to be used for primary agricultural production, but rather that the use of the land as part of an integrated farming operation had declined in use to what the Board found to be "not sufficient use". The Appellant contends that the integrated farming operation is still being carried on because the operation directly involves the breeding of race horses - namely the keeping of a horse for approximately 3 weeks in September 1991, and 187 bales of hay that was cut and taken to Mr. Albulet's home/farm. The Appellant argues that these two factors constitute involvement in an "integrated farming operation", albeit the fact that the hay was used only for bedding and not for feed. Therefore it is stated that the Board erred with respect to issue #1 and that their finding is arbitrary and an unreasonable interpretation of the regulation and section 28 of the Assessment Act. The Respondent counters with the proposition that the court is barred from reviewing a decision unless the issue before the court concerns a matter that is solely a question of law. For the purposes of this appeal a question of law will arise if the Board is found to have (1) acted without any evidence; or (2) if upon a view of the facts the Board is found to have acted upon a finding of the facts that could not reasonably be entertained. (Affirmed in Crown Forest Industries Ltd. v. Assessor of Area 6 - Courtenay (Aug. 1985) B.C.A.C. Stated Cases No. 210, 1179 at p (Southin J.), and Westcoast Transmission Company Ltd. v. Assessor of Area 9 - Vancouver (May, 1987) B.C.A.C. Stated Cases No. 235, 1347 at p (Cumming J.)). Obviously, the Board's decision was based on some evidence. Therefore, in order for the court to find an error of law and review this application, the Board's decision must be such that the conclusion reached was one to which no reasonable person could come. Furthermore, it is the Respondent's submission that in assessing the evidence the Board took into account all of the evidence presented by both parties and in doing so considered all material factors which led to the Board decision. Therefore, there should be no appeal because these are questions that do not go to whether or not there was "no evidence" or an "unreasonable interpretation of the evidence", but rather are concerned with the weight of the evidence given by the Board. In Mohamed Ahmed and Jutta Ahmed v. Assessor of Area 09 - Vancouver (1992) B.C.S.C. Stated Cases No. 325 Madam Justice Boyd cited the B.C.C.A. authority of Provincial

5 Assessors of Comox, Cowichan and Nanaimo v. Crown Zellerbach Canada Ltd. (1963) 42 W.W.R. 449 at 471 and stated: The Board cannot base its decision on its own opinions, unsupported by evidence. However, only where there is no evidence will an error of law lie; whether there is sufficient evidence is a question of fact and cannot be stated. With respect to the first issue on appeal the Respondent submits that the question raised by the Appellant is misstated because the real issue before the Board was whether the property formed part of an integrated farming operation or whether it had ceased to do so. In the Respondent's view the evidence indicated the property was not integral due to the fact that there was a significant decline in the use of the property for anything that might be construed as farm purposes. The Respondent submits that the Assessment Appeal Board found: 1. There was no grazing of livestock during the year preceding except within the paddock area; 2. This differed from earlier years; 3. Keeping of horses within the paddock area was limited to one or two weeks; 4. This was a decrease in activity from previous years; 5. Although some hay had been cut it was of no value in feeding horses; 6. The use of the hay for bedding for the horses was not sufficient to allow farm class. In order for the Appellant to succeed he must show that the Board, in finding there was a "cessation" of farm use pursuant to section 8(1), acted upon a view of the facts which could not reasonably be entertained. The Shorter Oxford English Dictionary defines "cessation" as: 1) ceasing, discontinuance, stoppage; 2) inactivity. The Board found that the Appellant was "ceasing" to use the property as a facility to keep his animals. In previous years the Appellant's evidence suggests that he had used the land for storing many horses for "all summer", but with respect to the year in question he had only kept one horse for approximately a 3 week period. This use constitutes roughly a 6 per cent yearly use of the property and clearly illustrates "inactivity". This proposition is consistent with the decision of Assessment Commissioner of B.C. v. Progressive Construction Ltd. (1989) Stated Cases No. 280 p In that decision Mr. Justice Meredith stated at p : In this case the bulk of the land in question did not start to be used for agricultural production far less ceased to be so used. But if the bulk of the land had been used for agricultural production so as to qualify as a farm, when the production ceased so would the farm designation. The Board found further that the harvest of the hay does not constitute an integrated part of a combined farming operation because it does not fall within the "growing or raising of an agricultural crop for food for human or animal consumption" as allowed under "primary agricultural production" in B.C. Reg. 298/85. While I agree with the authorities that suggest "primary agricultural production" may be given an extended definition under the right circumstances (ie. Leader Potato Assoc. Ltd. v. Assessor of Area 17 - Penticton (1986) 5 B.C.L.R. (2d) 327), it is difficult to accept the notion that this land should be given a farm

6 classification because it produced 187 bales of hay none of which is used for feed, and only some of which is used for bedding. In Leader, Leader Ltd. owned land and a building which housed facilities for the sorting, grading, packaging and storing of the potato crops of its four shareholders. The four shareholders were potato farmers on individually owned farmlands near the Leader Ltd. facility. The Area Assessor classified the land of Leader Ltd. as residential for property tax purposes. On appeal Hutcheon J.A. (Cheffins J.A. concurring) of the British Columbia Court of Appeal held that although the provision of storage facilities is not within the definition of "primary agricultural production", the land is classified as a "Farm" because the grading, sorting, storage and packaging are an integral part of the growing and farming process. Once it is found as a fact that the work on the land is an integral part of the particular growing and farming process, the requirements of the regulations are met. It is the Appellant's submission that the hay for bedding illustrates a "direct" use in the production of horse breeding and therefore falls within the definition of "primary agricultural production". This concept pushes the extended definition of "primary agricultural production". Surely this cannot be what the Legislature intended. The Shorter Oxford English Dictionary defines "integral" as "necessary to the completeness of the whole". Hay that is used only partly as "bedding hay" cannot be said to be "integral" to Mr. Albulet's farming operation. With respect to the second and third issues on appeal the Appellant cites paragraph 6 of the Board's decision - that the hay was "of no value in the feeding of the horses" and that "the hay crop itself was not sufficient to generate sufficient income to qualify for farm class on its own" - as being unreasonable because it is in fact against the evidence that the land was used under the lease as part of Mr. Albulet's farming operation and also because it would impose an arbitrary and undefined requirement for farm classification not found in the standards or the Act. The Appellant states at page 8 of their brief: There is no obligation to recover the income on one parcel as a "stand alone" operation where the parcel is part of the integrated farming operation permitted under Section 5 of the Standards. There is nothing in Section 5 to prevent a farm classification merely because one crop of hay cannot be used to feed horses as contrasted with another direct use involved with horse breeding and raising. The Appellant further submits that there is nothing in section 5 to prevent the "reasonable intention" to develop part of an integrated farm operation for grazing where there is a continued integrated farm operation. For the Board to find otherwise is "blatantly unreasonable and is a finding that no person acting judicially and properly instructed as to the relevant law could make". Presumably, the Appellant feels that because he has seeded the land with hay this illustrates a bona fide intention, and to find otherwise is contradictory to the decisions of Assessment Commissioner v. Robert McMinn, 2 B.C. Stated Cases No. 152 p. 887, and Leader Potato Assoc. Ltd., supra. While I agree with the Appellant's comments vis-a-vis the "stand alone" operation, and with respect to the issue of intention, the Board was again attempting to illustrate that the land in question did not constitute any value with respect to an integrated farming operation as defined by the regulations, nor did it satisfy any farming requirement on its own. In McMinn the taxpayer owned 350 acres of which approximately 1/3 was fenced and actively farmed (cattle raising). The Assessor had only allowed farm classification on the fenced portion. The taxpayer gave evidence to the Assessment Appeal Board of an intention to develop farming on the remaining acreage in the future. Madam Justice Proudfoot stated at page 887: I agree with Mr. Wilson's argument that while the acreage outside the 139 acres may not be actively used, Mr. McMinn is embarking on a plan to bring this entire acreage into a farming operation. He contemplated its use and was taking logical steps towards that end. Counsel for the respondent asks me to apply an extended definition to the word "use". Mr. McMinn told the Board his plans

7 and they obviously accepted this and gave this extended definition to that word. I find authority for this extended meaning to the word "use" in the Newcastle City Council v. Royal Newcastle Hospital case [1959] A.C. 248, which held that an owner can use land by keeping it in its virgin state for its own special purposes. In that case "use" is defined as "to obtain the benefit of, to employ to any purpose, to enjoy the benefit of and to avail oneself of". The Shorter Oxford English Dictionary contains this definition of the word use: "... The act or fact of using, holding, or possessing land or other property so as to derive revenue, profit, or other benefit from it..." There was evidence before this Board to support the proposition that Mr. McMinn was setting out on a logical course to develop his entire property. The entire holding is an integrated farming operation. The assessor placed far too much importance on the fence built around the 139 acres. In my view the cases of McMinn and Leader can be distinguished from the present appeal due to the fact that there is no clear intention on the part of the Appellant that he was setting out on a logical course to develop the property as an integrated farming operation as per Proudfoot J. in McMinn. Nor does the use of the hay as bedding constitute an integral part of the raising of horses (ie. as I have stated it is stretching the imagination somewhat to consider hay that is partly used for bedding as necessary to the completeness of the whole operation) as articulated by Hutcheon J.A. in Leader. In this case, although the Appellant has indicated that the field has been ploughed and seeded with hay, it is the evidence of Mr. Albulet that its use will not be for feed. At p. 132 of the proceeding he states:... this hay is not horse hay. It's - you may get a few bales out of it, but its strictly bedding or whatever else you want to use it for, but its not horse hay. I mean, I feed my [sic] alfalfa, and I put up a crop in alfalfa and get that from either up country or Washington State. There is no evidence that the Appellant planned to grow an alfalfa crop on the property which would bring him directly within the requirements of the Assessment Act. It is also the evidence of Mr. Albulet that the best use for the property is as a pasture to separate the horses during breeding. He states at p. 132 of the proceeding: Your best thing is just to use it as pasture, this whole thing, to keep animals separate at this time of year. It is clear from the evidence that the Appellant's use in this regard is so minuscule that it cannot reasonably be seen as integral. Further, there is no indication that the Appellant intends to use the property to separate the horses for a significant period of time in the future. I find it was reasonable for the Board to hold that there was a decrease in activity of the property from previous years, and that there was evidence of cessation of farm use so as to establish insufficient use as an integrated farm operation. As stated by Meredith J. in Progressive Construction Ltd., supra, at page 1618: I say in all good sense if land is to be classified as a farm it must be used as a farm. That is to say that the land must be used for primary agricultural production as defined by the regulation. There is no primary or any agricultural production on most of the subject land. And I conclude that neither the Assessment Act nor the regulation make available to the respondent a "loophole" by

8 which its taxes may be reduced. In my view the Act and regulation contemplate that if land is to be classified as "farm" it must be used actually or prospectively as a farm as defined. In this case the Board held that because the land did not qualify as a farm it could only be classified as a farm if it fell under s. 5(2) "operated as an integrated farm operation" for primary agricultural production. To use Meredith J.'s language - there was no "primary or agricultural production" on most of the subject land, nor was this contemplated. The Board accepted the evidence of the Assessor that there must be "reasonable contribution" from the parcel and there was no "reasonable contribution" in this case. In short, because the Appellant's use of the subject property was minimal or negligible with respect to the integrated farm operation then the farm classification should fail. As a result I find there has been no error of law and the appeal is dismissed with costs. SC 342cont Mussallem Realty Ltd. v. AA13 MUSSALLEM REALTY LTD. v. ASSESSOR OF AREA 13 - DEWDNEY/ALOUETTE British Columbia Court of Appeal (CA016991) Vancouver Registry Before the HONOURABLE MR. JUSTICE TAYLOR, the HONOURABLE MR. JUSTICE HOLLINRAKE and the HONOURABLE MADAM JUSTICE PROWSE J.R. Lakes for the Appellant J.E.D. Savage and C. Stepan for the Respondent Vancouver, January 14, 1994 Farm Class -- Integrated Farm Operation Land Ceasing to be Used as Farm The owner argued that the Court and the Board below erred by removing farm class from the property where there was no evidence of a cessation of farm use as, it was alleged, was required by section 8 of B.C. Regulation 298/85 - Standards for the Classification of Land as a Farm. The evidence showed that farming had diminished but not ceased in the sense that one horse was on the property and a certain amount of cultivation had taken place. The Assessor argued that the Board's finding supported in the Court below was that the property did not form part of an integrated farm operation in the required sense. HELD: Appeal dismissed. 1. Where the property qualifies as a farm pursuant to section 5 of the Regulation as being part of an integrated farm operation, farm class can be lost even if the land still has some minimal farm use; 2. Where land makes no reasonable contribution, from a business point of view, to other property properly classified as a farm, it does not constitute part of an integrated farm operation attracting farm class. There must be some worthwhile contribution to the farm operation. Reasons for Judgment January 14, 1994

9 TAYLOR, J.A.: This is an appeal from a judgment of Mr. Justice Leggatt upholding a decision of the Assessment Appeal Board removing the farm classification previously applied to about 80 percent of the Appellant company's 5.72 acre parcel on the Lougheed Highway in Maple Ridge, and classifying the whole parcel for 1992 taxation purposes as "Business and Other". The result of the reclassification is to increase the assessed value of the portion in question from $8,840 to $554,840; counsel were unable to say whether the change would also expose it to a higher mill rate. The property in question is zoned for commercial use. Approximately 17 percent of its area is occupied by a franchise fast-food restaurant facility, two percent by a paddock, 72 percent by a hayfield and nine percent by wild vegetation. The portion previously classified as farm land -- that is to say all except that taken up by the fast-food facility -- is leased by the Appellant owner under the terms of a three year written lease to Jeffrey Albulet, for one dollar a year. Mr. Albulet, who described himself at the Appeal Board hearing as an airline pilot and part-time farmer, has a halfinterest in the fast-food business on the property and also operates a farm 14 kilometres away, in Matsqui, on which he breeds and raises racehorses. During the year ending September 30, 1991, the period relevant for 1992 assessment purposes, he used the paddock portion of the property for about two weeks for grazing one stallion and was in the process of growing a hay crop on the hayfield portion. Before the Court of Revision the Appellant owner successfully contended that the portion of the property not taken up by the fast-food operation continued, as in the past, to constitute part of an "integrated farm operation", in association with his Matsqui horse farm, for the purposes of the farmland classification regulation under the Assessment Act R.S.B.C. 1979, c. 21. An appeal by the Assessor of that decision was allowed by the Assessment Appeal Board, and the owner's appeal from the Board's decision, by case stated to the Supreme Court, was dismissed by Mr. Justice Leggatt. Regulation 298 under the Assessment Act, as amended, establishes minimum primary agricultural production requirements which have to be met in order for land to qualify for the "farm" classification. These depend on the type and size of the farm. It is agreed that Mr. Albulet's horse farm operation at Matsqui meets the applicable standards. The present issue arises under s. 5 (2) of the regulation, which provides that land may only be classified as a farm where: (a) it consists of all or part of any parcel; or group of parcels of land, contiguous, or not, making up a tract of land owned or held under a written lease by a person singly or jointly with any other person or persons and operated as an integrated farm operation for primary agricultural production, and (b) the integrated farm operation meets the other requirements of this regulation. It was by virtue of this provision that the parcel in question, with the exception of the fast-food facility, had in previous years been classified as farm land under the Act. In the case stated the Board gives the following reasons for reclassifying that portion of the property formerly classified as farm land: 5. The Board found from the evidence that there had been no grazing of livestock during the year preceding September 30, 1991 except within the paddock area and this differentiated the facts from previous years when Farm classification was granted. Furthermore the Board found that the keeping of horses within the paddock area appears to have been no longer than a period of one or two weeks in September 1991 and that there was a decrease in activity from previous years.

10 6. The Board found that while the hay field may have been improved and agreed that a hay crop cut in 1992 demonstrated increased activity since the evidence indicated no previous hay crops were cut the hay was, however, of no value in the feeding of horses. The hay crop itself was not sufficient to generate sufficient income to qualify for Farm class on its own. 7. The Board found that while the hayfield might have a potential use it was not relevant for the year under appeal since Farm classification was being sought under Section 5 of B.C. Regulation 298/ The Board further found that the requirements for operation as an integrated farm operation for "primary agricultural production" was not met by the Respondent (Appellant herein) notwithstanding that the parcels were not required to be contiguous. 9. In the opinion of the Board the word "integrated" denotes a combined operation to make a complete farm and there was not sufficient use of the subject property to qualify for Farm class. As required by the Act the Board stated the following as "questions of law only" which were framed by the Appellant owner for the opinion of the Court: 1. Did the Assessment Appeal Board err in law and misinterpret Section 8 (1) of the Assessment Act Regulation, B.C. Regulation 298/85 (as amended) to deprive Mussallem Realty Ltd. of its farm classification where the evidence did establish a farming use as an integrated farming operation and there was no evidence of cessation of farm use? 2. Did the Assessment Appeal Board err in law and act upon a view of the facts which could not reasonably be entertained by finding there was a "decrease in activity from previous years" to deprive Mussallem Realty Ltd. its farm classification despite the evidence that the land was used as an integrated farm operation during the year preceding September 30, 1991? 3. Did the Assessment Appeal Board err in law and act without any evidence or upon a view of the facts which could not reasonably be entertained by depriving Mussallem Realty Ltd. its farm classification where there was no evidence of any cessation of farm use but the evidence did establish a continuation of the farm use as part of an integrated farming operation? The trial judge answered all questions in the negative, and accordingly dismissed the appeal. The Appellant obtained leave to appeal that decision to this Court. On the present appeal counsel for the owner referred us to s. 8 (1) of the regulation, which provides: Notwithstanding anything contained in this regulation, land that ceases to be used for primary agricultural production on or before September 30 of the year preceding the year for which the assessment roll is prepared shall not be classified as a farm. Counsel says that only where there has been a complete cessation of farm use can the farm classification be removed, and it is clear in this case that farm activity was continuing. But it seems to me that the sole issue before the Board was whether the parcel constituted an integrated part of Mr. Albulet's horse farm operation for the purposes of section 5 (2) of the regulation. If it was not part of an integrated farm operation for the purposes of s. 5 (2) then it could not qualify for the farm land classification, even though it was being used for "primary agricultural production" up to and including September 30, 1991, because, standing alone, the amount of its primary agricultural production would not qualify it for the farm classification. The

11 purpose of s. 8 (1) is to authorize the Assessor to deny the farm classification to land which has been part of an integrated farm operation which meets the production requirements for farm land classification during some part of the 12-month period ending September 30 of the year prior to that for which it is being assessed, but on which farming has ceased before the end of that 12- month period. The question for the Board, then, was whether, during the year ending September 30, 1991, the land in question and the Matsqui horse farm, together constituted an "integrated farm operation". That question in my view turns solely on the interpretation and application of s. 5 (2) of the regulation. In previous years grazing of horses there had been somewhat more extensive, but this had declined to the point that counsel for the Appellant conceded before us that it could not, during the year in issue, have been sufficient to constitute the land part of "integrated farm operation". Mr. Lakes points out that during the critical 12-month period some soil taken off the site of the fast-food facility had been ploughed into the land and seeded with grass, and that this resulted in 187 bales of hay being harvested from it during the next following year. This, he says, constituted a sufficient contribution to the horse-raising business to render the land part of an "integrated farm operation", for the purposes of s. 5 (2) of the regulation. But the evidence before the Board was that Mr. Albulet does not use hay as feed for his racehorses -- he uses alfalfa which he gets from elsewhere -- and that the hay in question was, in any event, unfit for feeding to horses. Of the hay crop Mr. Albulet told the Board only: I put it up in the barn, but to be quite honest with you, this hay is not horse hay. You may get a few bails out of it, but its strictly bedding or whatever else you want to use it for, but its not horse hay. There was no evidence that the hay was used at all on the horse farm, even for bedding. There was no evidence that it made any worthwhile contribution to the farm operation. It was, in my view, as a matter of law, open to the Board to conclude that land does not constitute part of an "integrated farm operation", for the purposes of s. 5 (2) of the regulation, if the Board finds that the land makes no reasonable contribution, from a business point of view, to the farm operation in question. Having in mind that the land here was an isolated parcel some distance from that on which the main farm activity was being carried on, that the hay was not intended to be used as feed there, and not of a quality fit, in any event, for feeding horses, and that there was no evidence that it made any other contribution to the operation, the Board was, in my view, entitled on the evidence to reach the conclusion which it did. I am of the view that Mr. Justice Leggatt properly answered the questions stated by the Board, and that we must dismiss the appeal. HOLLINRAKE, J.A.: I agree. PROWSE, J.A.: I agree. TAYLOR, J.A.: The appeal is dismissed.