The following version is for informational purposes only, for the official version see: http://www.courts.gov.bc.ca/ for Stated Cases see also: http://www.assessmentappeal.bc.ca/ for PAAB Decisions SC 289 Crown Forest Industries v. AA04,05,06,24,25 Quick Link to Stated Case #289 (BCCA) MR.JUSTICE MACDONALD CROWN FOREST INDUSTRIES LIMITED v. ASSESSOR OF AREA 04 - NANAIMO/COWICHAN ASSESSOR OF AREA 05 - PORT ALBERNI ASSESSOR OF AREA 06 COURTENAY ASSESSOR OF AREA 24 - CARIBOO ASSESSOR OF AREA 25 - NORTHWEST AND SURVEYOR OF TAXES Supreme Court of British Columbia (A891141) Vancouver Registry Brian J. Wallace for the Petitioner John E. D. Savage for the Respondent Assessors Vancouver, March 13, 1990 Classification - Class-7 - Managed Forest Land - Tree Farms - Act Amendments - Effect - s. 2 Reasons for Judgment March 15, 1990 The petitioner applies under the Judicial Review Procedure Act, R.S.B.C. 1979, c. 209 to quash certain assessment and tax notices issued to it for the 1988 taxation year. It is an integrated forest products company and owns numerous "forest properties" from which it harvests trees. As the result of amendments to the Assessment Act, R.S.B.C. 1979, c. 21 (the Act), passed in 1986 and proclaimed effective January 1, 1987, the respondent Assessors revised the assessment roll in respect of those properties for the 1988 taxation year. Based on the biennial assessment regime now in force in this province, the petitioner had already received assessment notices for the 1987 and 1988 taxation years. The question raised by this petition is whether, in the face of the earlier assessments based on the former legislative scheme for the assessment of tree farms, there was any jurisdiction in the respondent Assessors to revise the assessments for the 1988 taxation year in accordance with the new legislative scheme. To put the question another way, does the power of the Assessors set out in s. 2 (1.1) of the Act to prepare a revised assessment for the 1988 taxation year apply in the case of this particular legislative change? If so, the change must fall within one of the factors enumerated in s. 2 (1.2) of
the Act which provides that subsection (1.1) of that section "applies only to cases" specified therein. The legislative amendment in 1986 repealed the definition of "forest land" in the Act and the provisions in s. 29 thereof for valuation of such land. Essentially, s. 29 had provided for a discounted cash flow valuation. In its place, the 1986 amendment (which came info force by Regulation on January 1, 1987) enacted a new valuation procedure based upon "the value of the land" in accordance with land value schedules prescribed by the commissioner, together with the value of cut timber as the result of forestry operations on the land during the year two years prior to the taxation year in question. It is clear from a reading of the re-enacted s. 29 that, despite retention of the biennial assessment system, it was the intention of the legislature thereafter to adjust assessments of "forest land" annually on the basis of the value of timber cut in the year prior to the making or revising of the assessment (i.e.: two years prior to the taxation year in question). That conclusion is reinforced by the inclusion in s. 2 (1.2) of subsection (e), which states that one of the cases in which the Assessors are required to prepare a revised assessment is land to which s. 29 (5) (the cut timber value component of the new valuation scheme) applies. Despite that intention, the petitioner submits that the Assessors had no authority to completely revise the assessments of its lands for the 1988 taxation year. It argues that none of the cases listed in s. 2 (1.2) of the Act are applicable, and that the Assessors were obliged to wait until the next biennial assessment (in 1988, for the 1989 and 1990 taxation years) to implement the new valuation scheme. It says further that B.C. Regulation 341/87 purporting to provide schedules of both land and cut timber values to be used "for the purposes of the 1988 and subsequent taxation years" is of no force and effect insofar as the 1988 taxation year is concerned. Counsel cited two prior decisions of this court (both of which are currently under appeal) which deal with the effect of a legislative change on the assessment roll for the second year to which an assessment applies under the biennial system. One of those decisions is B.C. Coast Vegetable Co-Op v. Assessor of Area 11 - Richmond-Delta (unreported; November 29, 1989; No. A892336, Vancouver Registry). There, as the result of an earlier decision of the Court of Appeal in the same matter, the Assessment Appeal Board was required to direct the Assessor to make the necessary amendment to the Assessment Roll in accordance with the decision." In doing so, the Board ordered that the assessment for the year 1987 only be revised. The owners appealed to this court, which held: "The appellants argue in effect that the Assessment Act does not authorize a separate Assessment Roll for the year 1987. Rather they say that there is one Roll and one Roll only governing the years 1987 and 1988. Thus the amendment ordered should and must be to that single Roll. As there was no revision of that Roll made for the year 1988 by the Assessor the decision of the Court of Appeal must effectively bring about an amendment of the Roll governing both years. I agree." While the outcome of the B.C. Coast Vegetable Co-Op case is somewhat unique because of the history of the appeal proceedings and the legislative amendments to overcome the effect (except on that particular appeal) of the decision of the Court of Appeal, and because of the fact that no revised assessment roll for the 1988 taxation year was ever prepared, it does emphasize the importance of the biennial regime to the present assessment scheme. At p. 4 of that judgment, the court states: "... the reasons of the Assessment Appeal Board are based upon the misconception that separate Rolls exist for the years 1987 and 1988."
The second decision to which I was referred is Crown Forest Industries v. Her Majesty the Queen (unreported; January 19, 1990; No. A891934, Vancouver Registry). That judgment contains this passage at p. 7: "The petitioner says that the legislature's intention was to make the extended definition of 'occupier' operative only for the next biennial assessment which would be made in 1988 to cover 1989 and 1990 subject to any revision made in 1989 for 1990. The petitioner argues that the legislature never intended to allow a revised assessment to be made in 1987 to apply to 1988. The respondent contends that the revised assessments for 1988 were authorized by the 1987 amendment." Both counsel here agree that exactly the same issue (albeit with respect to a different amendment) is before me in this case. There, the court rejected one, but accepted another suggestion as to the provision in s. 2 (1.2) which applied to the amendment in question, and thus supported the revisions for 1988 (the second year to which the roll applied). I have concluded, as the petitioner argues, that unless the amendment to the legislation in question here falls within one of the "cases" specified in s. 2 (1.2) of the Act, the revised assessments for the 1988 taxation year (issued by the respondent Assessors in 1987) must be quashed along with the tax notices issued by the respondent, the Surveyor of Taxes. The primary argument of the respondent Assessors is that the amendments effected a change in the classification of this land, within the meaning of s. 2 (1.2) (b) (v) (C) of the Act as a result of the change to s. 29 eliminating "tree farm land" and substituting therefore either "managed" or "unmanaged forest land." I disagree. Section 29 provides now for only two classifications of forest land, either managed or unmanaged. It is a change from one of those categories to the other to which s. 2 (1.2) (b) (v) (C) refers. In my view, the elimination entirely from the Act of the tree farm land classification and the creation of new classifications into one of which the petitioner's lands must fall, is not "... a change in... the classification..." as contemplated by s. 2 (1.2) (b) (v) (C). Furthermore, on the reasoning in Hamersly Holdings v. Assessor of Area 27 - Peace River (unreported; December 15, 1988; No. A883341, Vancouver Registry), s. 2 (1.2) (c) (iii) is not applicable to support a change in value. A mere change in classification under s. 26 (8) of the Act cannot support a change in the assessed value, even though it might well have the effect of changing the tax payable because of a different tax rate becoming applicable. I find myself unable to fit this particular legislative change into any of the cases set out in s. 2 (1.2) of the Act. Thus I find no authority for the revision of the assessment rolls applicable to the 1988 taxation year for the "forest lands" described in the petition. The 1986 assessment (for the 1987 and 1988 taxation years) must stand. The legislative amendments effective January 1, 1987 have no impact until the biennial assessment in 1988 (for the 1989 and 1990 taxation years). This decision has no force and effect, nor any impact upon, any tax notices issued by municipalities not joined as respondents in these proceedings. There will be liberty to apply in respect of costs if the parties cannot agree. SC 289cont AA04,05,06,25,24 v. Crown Forest Industries ASSESSOR OF AREA 04 - NANAIMO/COWICHAN ASSESSOR OF AREA 05 - PORT ALBERNI ASSESSOR OF AREA 06 COURTENAY ASSESSOR OF AREA 25 - NORTHWEST ASSESSOR OF AREA 24 - CARIBOO
v. CROWN FOREST INDUSTRIES LIMITED British Columbia Court of Appeal (CAV01187) Victoria Registry Before the HONOURABLE MR. JUSTICE MACFARLANE, the HONOURABLE MR. JUSTICE WALLACE the HONOURABLE MR. JUSTICE HINDS, Brian J. Wallace and Andrew W. Carpenter for the Respondent J. E. D. Savage for the Appellants Victoria, March 14, 1991 Classification - Class-7 - Managed Forest Land - Tree Farms - Act Amendments - Effect - s. 2 In an appeal to the Court of Appeal, the Court held that a change in legislation from "tree farm land" to "managed forest land" did not effect a change in classification within the meaning of s. 2 (1.2) (b)(v) (C) and s. 2 (1.2) (c) (iii). Section 2 (1.2) (b) (v) (C) could not be relied upon for a revised assessment roll because the legislation did not effect a change in the classification of such land but rather a change in the name by which such land was to be known. Section 2 (1.2) (c) (iii) could not be relied upon since a change in classification under that section does not authorize a change in the assessed value. The Court applied and adopted the reasons of Mr. Justice Macdonald in the Supreme Court. Reasons for Judgment March 14, 1991 This is an appeal from a judgment of Macdonald J. wherein he granted the relief sought in a petition brought by the Respondent against the Appellants herein. The facts are appropriately set forth in the reasons for judgment dated March 15, 1990 and it is unnecessary to re-state them. This appeal involves consideration of section 2 (1.2) (b) (v) (C) and section 2 (1.2) (c) (iii) of the Assessment Act R.S.B.C. 1979 c. 21 as amended (hereinafter referred to as "the Act"). In order to consider the foregoing sections it is necessary to make reference to section 2 (1.1) of the Act which provides: The assessor shall, not later than September 30, 1985 and September 30 in each odd numbered year after that, complete a revised assessment roll containing revisions to the assessment roll for the purpose of taxation during the following calendar year. Section 2 (1.2) (b) (v) (C) provides: 2. (1.2) Subsection (1.1) applies only to cases where (b) the actual value, determined under this Act in relation to a revised assessment roll, is not the same as the actual value entered in the assessment roll by reason of (v) a change in any of the following:
(C) the classification referred to in section 28 or 29. It is noted that sub-paragraph (C) refers to sections 28 and 29 of the Act. Section 28 pertains to "farm land" and is not directly involved in this appeal. By section 29, which is of primary concern in this appeal, the legislature changed the name for land -- the Highest and Best Use of which was the growing and harvesting of trees -- from "tree farm land" to "managed forest land" or "unmanaged forest land". The use of the land was not changed. The amended wording of section 29 affected only a change in the name by which such land was to be known. It did not effect a change in the classification of such land. In my view the provisions of section 2 (1.1) of the Act did not apply in the circumstances of this case by reason of the provisions of section 2 (1.2) (b) (v) (C). Turning to consideration of section 2 (1.2) (c) (iii), it is noted that it is restricted to a change in classification under section 26 (8) of the Act. The Assessors purported to resort to that section in order to increase the assessed value of the "managed forest lands" of the Respondent. The substantial increase in the actual value of the lands from the 1987 and 1988 assessment notice to the revised assessment notice for 1988 demonstrates the intent of the Appellants to make the foregoing increase. They were not authorized by section 2 (1.2) (c) (iii) to do so. A change in the classification of the land under section 26 (8) did not authorize a change in the assessed value to be made by the Appellants. I would dismiss the appeal for the reasons above set forth, together with the reasons of the learned trial judge which I would respectfully adopt. MACFARLANE J.A.: I agree. WALLACE J.A: I agree. HINDS J.A.: The appeal is dismissed.