ASSESSOR OF AREA 10 - BURNABY/NEW WESTMINSTER SCI CANADA LTD. Supreme Court of British Columbia (A981268) 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 415 AA10 v. Sci Canada Ltd Quick Link to Stated Case #415 (BCCA - Leave to Appeal) Quick Link to Stated Case #415 (BCCA) ASSESSOR OF AREA 10 - BURNABY/NEW WESTMINSTER v. SCI CANADA LTD. Supreme Court of British Columbia (A981268) Vancouver Registry Before the HONOURABLE MR. JUSTICE HOLMES (in chambers) J.H. Shevchuk for the Appellant G.S. Snarch and N.G. Madryga for the Respondent Vancouver, October 9, 1998 Municipal Act Exemptions - Cemeteries - "Ancillary and Incidental" Section 339(1)(f) of the Municipal Act R.S.B.C. 1996, c. 323 exempted from taxation land that is set apart or used as a place of interment, together with any incidental or ancillary buildings. The Assessment Appeal Board held that funeral homes and a crematorium and the land underneath these improvements are "incidental or ancillary buildings". The Assessor appealed arguing that funeral homes and crematoria and the supporting land are not "incidental or ancillary" to interment of the dead. HELD: Appeal dismissed. Reasons for Judgment October 28, 1998 The Assessor of Area 10 - Burnaby/New Westminster ("Assessor") required this appeal by Stated Case pursuant to section 63(3) of the Assessment Act, R.S.B.C. 1996, c. 20 (the "Assessment Act"). The appeal concerns two properties situated in Burnaby, British Columbia. They are known as Forest Lawn Memorial Park ("Forest Lawn") and Ocean View Memorial Park ("Ocean View"). There is a cemetery and funeral home operated on each. In addition, Forest Lawn has a crematorium on the property. The majority of a three-person Assessment Appeal Board (the "Board") panel held the lands and subject improvements on the properties were a cemetery and exempt from taxation under the provisions of section 339(1)(f) of the Municipal Act, R.S.B.C. 1996, c. 323 ("Municipal Act").

2 One Board member dissented. She found the improvements comprising a funeral home on each property and the crematorium located at Forest Lawn were not entitled to exemption. She found the land underlying the funeral homes and crematorium, however, together with all the other lands, were exempt. During the Board hearing, evidence was given by witnesses called by the Respondent that certain other minor improvements on the properties were not actively in use in the operation of the cemetery. The Assessor requested the Board then rule as to the status of those improvements for exemption. The request was denied. The Assessor alleges two errors of law in the Board's decision: 1. The Board erred in interpreting the exemption legislation; 2. The Board erred by not considering the exemption status of all improvements. The court will intervene in a decision of the Board where it has misinterpreted legislation or has misapplied legislation or principles of general law; or where the Board has acted in the absence of evidence or upon a view of the facts which could not reasonably be entertained [Canadian National Railway Company v. Assessor of Area 9 - Vancouver, [1990] B.C. Stated Cases 273 (B.C.C.A.)]. The construction to be given a statute is a question of law. It is a question of fact whether a particular matter or thing comes within a legal definition [Tisdale v. Hollinger Consolidated Gold Mines, [1933] S.C.R. 321 (S.C.); Hennessy v. Assessor of Area 01 - Capital, [1996] B.C. Stated Cases 367 (B.C.C.A.)]. A. Exemption for Land and Improvements The properties prior to the 1997 Assessment roll had been listed by the Assessor as entirely exempt from taxation pursuant to the predecessor to section 339(1)(f) of the Municipal Act. On the 1997 Assessment Roll, the Assessor removed the exemption in respect of portions of the land and improvements. Section 339(1)(f) provides: Unless otherwise provided in this Act, the following property is exempt from taxation to the extent indicated: (f) a cemetery under the Cemetery and Funeral Services Act actually used and occupied for the interment of the dead or designated an approved interment area by the registrar under that Act. "Cemetery" is defined in the Cemetery and Funeral Services Act, R.S.B.C. 1996, c. 45 as:... land that is set apart or used as a place of interment, together with any incidental or ancillary buildings. Therefore at issue is whether the Board erred by misinterpreting and misapplying the phrase "... land that is set apart or used as a place of interment, together with any incidental or ancillary buildings."

3 The Board found as fact that no human or cremated remains were interred in the funeral homes or crematorium, nor in the land underlying those improvements. The majority of the Board found all improvements on the properties were part of integrated cemetery operations. It was the decision of the majority that all land and improvements qualified for exemption. The dissenting Board member would not have allowed an exemption for the funeral homes or crematorium improvements. 1. Did the Assessment Appeal Board err in law in respect of the subject properties when it determined that the funeral homes, the crematorium, the parking lots servicing the funeral homes and crematorium, and the lands underneath those improvements are all exempt from taxation under the Municipal Act, R.S.B.C. 1996, c. 323? It appears the majority and dissenting member of the Board adopted the "plain meaning rule" of statutory interpretation in regard to the words "... incidental and ancillary buildings." They however differ as to that plain meaning. The Appellant Assessor supports the dissenting view. The majority found funeral homes and crematorium buildings were "... part of the integrated operation of the cemetery and have to do with the operation of the cemetery." The Assessor withdrew on the hearing of this appeal the issue involving exemption of the parking lots. The dissenting Board member referred to Black's Law Dictionary and the Concise Oxford Dictionary definitions of the words "incidental" and "ancillary". She concluded the definitions implied "... a dependent relationship between that which is incidental or ancillary to that which is principal." She concluded therefore "... buildings which are incidental or ancillary to a cemetery would be dependent upon the cemetery, aid the cemetery or further the purpose of the cemetery, and would not operate independently of the cemetery." The Concise Oxford Dictionary defines "incidental" as casual, not essential; and "ancillary" is defined as subservient, subordinate. I agree with counsel for the Respondent's that the dissenting panel member's concept of importing necessity into the meaning of definition derives from the Black's Law Dictionary definition of "incidental". That definition appears coloured by the context of the authority to which reference is made [Davis v. Pine Mountain Lumber Company, 273 Cal. App. (2d) 825 (1969)]. As noted in Canadian National Railway v. Harris, [1946] 2 D.L.R. 545 (S.C.C.) "necessity" would be a further limitation upon the usual meaning of incidental: That which is incidental to something which is usually or naturally associated with or arising out of the work... It is as the Oxford Dictionary states: something occurring or liable to occur in fortuitous or subordinate conjunction with something else. The word "necessarily" further limits the word "incidental". If such a connotation was intended in the legislation, one would expect that limitation to be specifically provided. There is a significant relationship between funeral and cemetery services. The legislature combines their governance under a single Act: the Cemetery and Funeral Services Act.

4 Municipal zoning controls of the properties as "cemetery district". It permits the building and operation of funeral homes and crematoriums on cemetery lands. The Board found the funeral homes were: And the crematorium was:... used for the arrangement and provision of funeral services including the preparation of human remains, the storing of remains while awaiting interment, the sale of caskets, coffins, markers, urns and other products, and the sale of flowers for funerals and memorializations.... used for the cremation of human remains and the storage of human and cremated remains while awaiting disposition. The services of the funeral homes and crematorium can be utilized where actual interment would be other than the subject cemetery. There is no requirement the services be exclusive to user of the Forest Lawn or Ocean View cemeteries. B. Tax Exemption: Land The Board was unanimous in holding that the land underlying the funeral homes and crematorium form part of the cemetery. Counsel for the Appellant argues that the definition of cemetery in the Cemetery and Funeral Services Act differs significantly from a definition contained in the Cemeteries Act, R.S.B.C. 1960, c. 48 in effect when the decision in Forest Lawn Cemetery Company v. The Corporation of the District of Burnaby, [1968], B.C. Stated Cases 61 was made. He cautions therefore that although the decision appears to support the Board's view as to the land component exemption at issue, the change in underlying legislation when considered shows it does not. The definition of cemetery in the earlier Act was: any land which is set apart or used as a place for the interment of the dead or in which human bodies have been buried, and includes a mausoleum. The present definition of "cemetery" is: land that is set apart or used as a place of interment, together with any incidental or ancillary buildings. Counsel suggests that under the current definition land used for a purpose other than providing a place for interment and therefore no longer set aside or used as a place of interment would no longer qualify for exemption. He argues the land upon which the funeral home and crematorium buildings rest fit this category. The Municipal Act exempts a cemetery under the Cemetery and Funeral Services Act from taxation. The exemption is for "... land that is set apart or used for the purpose of interment...". It need not be actually used for interments, but it must be designated as an approved interment area. There will be many parts of cemetery lands not actually used for interment. Walkways, spaces between plots, gardens and parking areas as well as maintenance and storage buildings are a

5 few of the obvious ones. It is the whole of the property, as a unity, which is designated and approved as an interment area. It is only buildings (improvements) that are not "incidental" or "ancillary" that do not qualify for exemption. The land underlying the funeral homes and crematorium is part of the cemetery as a whole and properly "... land set apart or used as a place of interment together with the whole of the cemetery lands." The answer to Question 1 stated for the opinion of the court is "NO." 2. Did the Assessment Appeal Board err in law when it refused to review the exemption status of certain greenhouses, a tractor shed and a parking lot located on Forest Lawn Memorial Park lands, a portion of the subject properties and an old stone chapel located on Ocean View Memorial Park lands portion of the subject properties in the face of new evidence adduced during the course of the hearing? In the course of the hearing before the Assessment Appeal Board, some evidence was heard concerning the use of certain greenhouses, a tractor shed, a parking lot and an old stone chapel on the subject properties. Some were no longer in use, with others the usage had changed. At the end of the second day of the hearing, the Assessor requested the Board to exercise its investigative function to declare that certain of these improvements were no longer entitled to exemption. The Respondent had no prior notification the exemption as to these improvements was challenged. It appears the Assessor formed no intention of doing so until midway in the hearing. The Assessment Appeal Board noted the Assessor had inspected the facility in question prior to completing the 1997 assessment roll, the exemption on the utility improvements in question was not withdrawn, and there was no notice the status of the facilities were at issue in the appeal. It declined in the circumstances to review the exemption status of the facilities for the 1997 roll. The Board suggested the Assessor could remove any improvement it challenged in the ensuing years Roll and thereby define an issue. The Board, under s. 58(9) of the Assessment Act:... may determine, and make an order accordingly,... (c) whether or not an exemption has been properly allowed or disallowed. [emphasis added] The section is discretionary. Section 59 is mandatory and sets out:... at the request of a party to the appeal, the board must take evidence with respect to, and determine the assessment of, both land and improvements in accordance with section 58.

6 [emphasis added] Section 60 is also a discretionary section, providing: On an appeal, on any ground, from the decision of the Court of Revision in respect of the assessment of property, the board may reopen the whole question of the assessment on that property, so that omissions from, or errors in, the assessment roll may be corrected, and an accurate entry of assessment for the property and the person to whom it is assessed may be placed on the assessment roll by the board. [emphasis added] I do not consider authorities confirming that the Assessment Act does not require formalized counterclaim proceedings, that an appeal to decrease an assessment can give rise to an increase, or that it is possible for the Board to review an assessment regardless of how the matter originally came before it are determinative of the present issue. The issue concerns the discretion of the Board. The Assessment Appeal Board heard the evidence in respect of the improvements in issue as mandated by section 57. The Assessment Appeal Board then had a discretion to "... reopen the whole question of the assessment of the property..." under s. 60 to investigate the exempt status of the facilities not previously challenged by the Assessor; or consider the propriety of the existing exemption under s. 58(2)(c). In considering the exercise of its discretion in light of the circumstances of neither a prior challenge to the exemption, or notice that it sought review, the Assessment Appeal Board obviously decided that it was inappropriate to decide the issue within the context of the present appeal. Counsel for the Assessor argues that the Board should have resolved any lack of prior notice by offering the Respondent an adjournment. That was undoubtedly an option available to the Board. It was not however an exclusive remedy, nor was it one the Board considered appropriate. I note that the Assessor seeks to blame the taxpayer for failing to disclose relevant information prior to the hearing so the Assessor "... would have been in a position to give notice of his intention to challenge the exemption." There is no evidence of such a duty; nor a breach of any duty by the taxpayer regarding information that it might be required to provide to the Assessor. The answer to Question 2 posed for the opinion of the court is "NO." In the result, the Respondent is entitled to its costs.

7 SC 415 cont. AA10 v. SCI Canada Ltd ASSESSOR OF AREA 10 - BURNABY/NEW WESTMINSTER v. SCI CANADA LTD. British Columbia Court of Appeal (CA025298) Vancouver Registry Before the HONOURABLE MADAM JUSTICE HUDDART J.H. Shevchuk for the Appellant G.S. Snarch for the Respondent Vancouver, February 10, 1999 Reasons for Judgment (Oral) February 10, 1999 HUDDART, J.A.: The Assessor seeks leave to have decided by a panel of this Court two questions of law. Firstly, did the learned Chambers judge err in the definition he ascribed to "cemetery" found in the Cemetery and Funeral Services Act R.S.B.C ch. 45? Secondly, did the learned Chambers judge err in the meaning he ascribed to the words "incidental" and "ancillary" found in the Cemetery and Funeral Services Act R.S.B.C ch. 45? Because I have reached the view that these are questions of law, and I cannot say there is no merit in the appeal, I consider that leave should be granted. The Respondent asks me to impose the conditions imposed by Madam Justice Proudfoot in Hennessey v. the Assessor of Area 01, 1996 B.C. Stated Cases 367. There, leave to appeal was granted on the condition that, if the Assessor succeeded he would not claim costs in the Court of Appeal; and if he failed, the property owner would be entitled to costs on a solicitor-client basis. In that appeal, the Chambers judge found the appeal was of significance to the Assessor, but of little monetary value for the property owners. In this case, the appeal has considerable significance for both parties. While I have some concerns as to how much merit there is in the appeal, I do not think it is a situation where I should make that order. It will, of course, be open to the Respondents, if they are successful on the appeal, to make an application for solicitor and client costs. SC 415 cont AA10 v. Sci Canada Ltd ASSESSOR OF AREA 10 BURNABY/ NEW WESTMINSTER v. SCI CANADA LTD. British Columbia Court of Appeal (CA025298) Vancouver Registry

8 Before the HONOURABLE CHIEF JUSTICE McEACHERN, the HONOURABLE MR. JUSTICE LAMBERT, and the HONOURABLE MR. JUSTICE DONALD J.H. Shevchuk for the Appellant G. Snarch for the Respondent Vancouver, March 8, 2000 Municipal Act Section 339 Exemption Cemeteries "Incidental or Ancillary" Improvements The issue in this appeal was whether funeral homes and a crematorium located within the boundaries of the taxpayer s cemetery lands were properly considered "incidental or ancillary" to a cemetery as defined in the Cemetery and Funeral Services Act. If they were, then they were exempt from taxation. HELD: Appeal Dismissed. The improvements in question were "incidental or ancillary" to a cemetery. Therefore they were exempt from taxation. Reasons for Judgment March 29, 2000 Written Reasons by: The Honourable Mr. Justice Lambert Concurred in by: The Honourable Chief Justice McEachern, The Honourable Mr. Justice Donald Reasons for Judgment of the Honourable Mr. Justice Lambert: This appeal requires a determination of the scope of the meaning to be ascribed to the words "incidental or ancillary" in the definition of "cemetery" in the Cemetery and Funeral Services Act. That definition reads: 1. (1) In this Act:... I "cemetery" means land that is set apart or used as a place of interment, together with any incidental or ancillary buildings; II The appeal is taken from a decision of Mr. Justice Holmes in the Supreme Court of British Columbia on a case stated by the Assessment Appeal Board under s. 65 of the Assessment Act. The Stated Case is confined by the Act to a question of law alone. Two questions were stated. But only a part of the first question remains of any concern. That part may be set out in this way:

9 Did the Assessment Appeal Board err in law in respect of the subject properties when it determined that the funeral homes [and] the crematorium are exempt from taxation under the Municipal Act? Mr. Justice Homes answered that question "No". Leave to appeal is required before an appeal from the order of Mr. Justice Holmes may be taken to this Court. The appeal is restricted to a question of law. Madam Justice Huddart granted leave to appeal on these two questions of law: 1. Did the Learned Chambers Judge err in the definition he ascribed to "cemetery" found in the Cemetery and Funeral Services Act, R.S.B.C. 1996, c. 45? 2. Did the Learned Chambers Judge err in the meaning he ascribed to "incidental and ancillary" found in the Cemetery and Funeral Services Act, R.S.B.C. 1996, c. 45? III The relevant facts required to give a context to the question or questions of law are that SCI Canada Ltd. owns and operates two cemeteries: Forest Lawn Memorial Park and Ocean View Memorial Park. Both Forest Lawn and Ocean View cover extensive acreage s which are largely dedicated to be used for burial of dead bodies, referred to in the Cemetery and Funeral Services Act as interment. On both the Forest Lawn cemetery site and the Ocean View cemetery site funeral homes have been in place and operating for many years. There is also a functioning crematorium on the Forest Lawn site. Forest Lawn Funeral Home contains a chapel, flower shop, reception area, offices, arrangement rooms, selection room, meeting room, receiving area, cooler, storage area, preparation room, concourse and washrooms. Ocean View Funeral Home contains a chapel, reception area, lobby, repose rooms, flower delivery room, family lounge, offices, selection room, arrangement office, manager s office, storage, concourse and washrooms. The Forest Lawn Crematorium includes a committal room, cooler and freezer, receiving room, work area, office, washrooms and storage rooms. The two funeral homes are used for the arrangement and provision of funeral services including the preparation of human remains, the storing of remains while awaiting interment, the sale of caskets, coffins, markers, urns and other products, and the sale of flowers for funerals and memorializations. The Crematorium is used for the cremation of human remains and the storage of human and cremated remains while awaiting disposition. IV The majority of the Assessment Appeal Board (Mr. Charles Burtinshaw and Mr. Sukhraj Bal) found as a fact, as set out in the Stated Case, that all the buildings on the properties were part of the integrated operations of the cemeteries. The dissenting member of the Board (Ms. Cheryl Vickers) concluded that buildings can only be incidental or ancillary to a cemetery if they are dependent upon a cemetery, aid the cemetery, or forward the purpose of the cemetery, (remembering that a cemetery is a place of interment) and which cannot operate independently of the cemetery. Mr. Justice Holmes decided that there is "a significant relationship" between funeral and cemetery services; that both are governed by a single Act; and that municipal zoning permits the building and operation of funeral homes and crematoriums on cemetery lands. Mr. Justice Holmes relied also on Canadian National Railway v. Harris, [1946] 2 D.L.R. 545 (S.C.C.) for the conclusion that a building or use does not have to be necessary for the functional operation of another building or use in order for it to be incidental to the other building or use. In that case, at p. 574, Mr. Justice

10 Estey said that "the word necessarily further limits the word incidental ". Mr. Justice Holmes also relied on the Concise Oxford Dictionary which defines "incidental" as casual, not essential; and "ancillary" as subservient, subordinate. I add, parenthetically, that the Oxford Dictionary, in its full version, defines "incidental" as "occurring or liable to occur in fortuitous or subordinate conjunction with something else of which it forms no essential part." Mr. Justice Holmes also observed that the definition of "incidental" in Black s Law Dictionary seemed to be governed by the circumstances of the case from which it was taken, namely Davis v. Pine Mountain Limber Co. 273 Cal. App. (2d) 825 (1969). Black s Law Dictionary provides the following definition of "incidental": Depending upon or appertaining to something else as primary; something necessary, appertaining to, or depending upon another which is termed the principal; something incidental to the main purpose. Black s provides the following definition of "ancillary": Aiding; attendant upon; describing a proceeding attendant upon or which aids another proceeding considered as principal. Auxiliary or subordinate. I agree with the decision of Mr. Justice Holmes and with his reasons. I would like to make four additional points. My first additional point is that it is common place throughout legal usage to describe something as "necessarily incidental" to something else. That usage reveals the meaning of "incidental" when not qualified by the word "necessarily". It means something which may be expected to occur in fortuitous or intended subordinate conjunction with something else of which it forms no essential part. When the word "necessary" is added it means that the functioning of the principal operation can not, in itself, produce the ultimate result; the principal operation represents only a completed stage in the process to the ultimate result; and the incidental subordinate operation is needed to produce the ultimate result. My second additional point is that s. 35(3)(b) of the Cemetery and Funeral Services Act gives some indication of the usage adopted by the legislative drafter in setting out the legislative scheme. It reads: 35. (3) So long as lots that have been sold are not disturbed, an operator may, without the consent of a lot holder,... V (b) erect buildings for any use connected with, incidental to or convenient for the preparation, care, disposition or interment of human remains or cremated remains, or for other cemetery purposes. Assuming a consistent use of the word "incidental", then the usage in s. 35 illustrates that it does not mean simply "connected with" or "convenient for". It must be more than a simple unrelated connection and more than simple convenience. There must be a relationship of primary function with the subordinate function. And the subordinate function must relate to the carrying out of the primary function.

11 My third additional point is that the fact that a funeral home, and probably even a crematorium, can be located and function in entirely separate locations from a place of interment, does not mean that they are not incidental to lands set aside for use as a place of interment. It is not a principle of the interpretation of assessment legislation that buildings used for the same purpose must be exposed to the same assessment, or even the same assessment standards, no matter where they are located. My fourth additional point is that it is an important finding of fact by the majority of the Assessment Appeal Board that all of the buildings on the properties were part of the integrated operation of the cemeteries. That integration leads to the conclusion that the buildings are incidental or ancillary to the use of the land as a place of interment. For the reasons given by Mr. Justice Holmes, and for these additional reasons, I would dismiss this appeal. I would answer "No" to both questions posed in the leave order of Madam Justice Huddart and I would answer "No" to the remaining outstanding question in the Stated Case. The Honourable Mr. Justice Lambert I AGREE: The Honourable Chief Justice McEachern I AGREE: The Honourable Mr. Justice Donald VI