In the first few months of the year, property owners in Alberta will be receiving their property tax and business tax assessments, and should be considering making a complaint if their assessment is significantly in error. A complaint will lead to a hearing before an Assessment Review Board.
Taxpayers and their property advisors often perceive the Assessment Review Board process to be stacked against them. Often taxpayers consider the burden of proof required to establish an error by the municipality to be onerous to the point of being unjust. This situation invites taxpayers to look to the courts for relief.
Amendments to the Alberta Municipal Government Act (“Act“) that came into force in January 2010 changed the process for referring a property tax appeal to the courts. These amendments make it more important than ever to present a clear and comprehensive case before the Assessment Review Board.
Under the previous regulatory scheme, a taxpayer could appeal from the Assessment Review Board to the Municipal Government Board. Further reference to the courts was by judicial review, as the Act stated that there was no appeal from a decision of the Municipal Government Board.
As a result to the amendments to the Act, a taxpayer (or a municipality) can appeal directly from the Assessment Review Board to the Court of Queen’s Bench, but only with leave of the court. The court has to decide whether to grant leave to appeal, as an appeal is available only on a question of law and jurisdiction. Errors of law include applying the wrong legal test or failing to properly apply the Act. Questions of fact or the exercise of discretion are not open to appeal. If leave to appeal is granted the court will consider the merits of the appeal, but only on the specific legal issues for which leave was granted.
Participants in the new appeal process have wrestled with a number of procedural issues that are slowly being sorted out in the courts.
In Associated Developers Ltd. v Edmonton, 2011 ABQB 592, the court ruled that it is preferable (but not necessary) to hear the application for leave to appeal and the appeal separately, in two separate hearings. The upshot is that the appeal process is likely to become more manageable for all of the participants.
In Altus Group Limited v. Edmonton (City), 2011 ABQB 760, Altus, a property advisor, had appeared as agent for taxpayers before an assessment review board on 88 related complaints. Altus sought leave to appeal but it was opposed by the city on the ground that Altus lacked standing to appeal as it was not a taxpayer and was not affected by the decision. The court ruled that Altus, having been recognized as agent for the taxpayers, was a “complaint” having standing to appeal under the Act.
The topic of materials required for a leave application has created some debate and was considered in both Associated Developers Ltd. v Edmonton and Globexx Properties Ltd. v. Edmonton (City), 2011 ABQB 464. In both cases, the court commented that the record in a leave application will generally be less complete than the record required for the appeal. [The record is the written submissions of the taxpayer and the municipality, the transcript from the assessment review board hearing and the decision.]
Counsel for the Calgary Assessment Review Board has circulated a letter to counsel practicing in this field in which the board takes the position that it will provide, under s. 490(4), only what is “necessary” for a leave application. In counterpoint, the entire record may not be necessary in cases where leave to appeal is sought on a discrete issue. However, in a leave application where the taxpayer asserts that the board completely misunderstood the issues or where the taxpayer asserts that the board breached fundamental principles of justice, arguably the entire record will be required for a leave application.
Under the prior statutory scheme, court intervention involved an application for judicial review, as there was no statutory right to appeal. The new scheme provides a mechanism for appeal. In an effort to preserve as many remedies as possible for their clients, taxpayer counsel have often made applications that seek both leave to appeal and judicial review. In Precision Drilling Corporation v. Calgary (City), 2011 ABQB 503, the court ruled that when the issues raised are questions of law the statutory appeal was an adequate alternate remedy. Judicial review is available only in exceptional circumstances.
In summary, appellate practice under the amended Act is a work in a progress. The changes in the appeal scheme have removed one layer of appeal (to the MGA) and have introduced a new threshold of seeking leave to appeal. No appeal is available unless the taxpayer can show that there was an error of law or jurisdiction. This makes it more important than ever for a complainant taxpayer to present its case thoroughly and to make all of the appropriate legal arguments. This will give the complainant the best chance of success at the hearing. Equally important is that a case that is well presented and well argued will provide a solid platform for an appeal.
[Philip Carson is a commercial litigation lawyer in the Calgary office of Miller Thomson. In addition to property tax appeals, his practice includes construction, real estate and commercial tenancy disputes.]