Municipal Law – Appeal – Property Taxes – Assessments, Municipal Law – Assessment Appeal – Notice of Appeal, Statutes – Interpretation – Municipalities Act, Section 225(2)
The appellant appealed its 2018 municipal tax assessment on its commercial property (the property). The Saskatchewan Assessment Management Agency (SAMA) was the assessor for the rural municipality. The cost approach was used to value the property. A value was determined for the land and the improvements separately. The market adjustment factor (MAF) used for the property was 1.72, meaning that the improved property would sell for more than its depreciated cost. The appellant argued that the MAF was too high, resulting in an overstatement of the value of the improvements located on the property. The assessed value of the land was determined to be $597,600 and the value of the improvements was $3,106,200. The overall assessment was $3,703,800. The appellant argued that a recent sale of vacant land was not included in SAMA’s calculations. The inclusion of the sale would result in the vacant land value being increased and the improvement value being decreased, with a reduction in the MAF. The reduction in the MAF would result in a decrease in the assessed value of the improvements portion of the property by an amount that exceeded the increase in the assessed value of the land. At the appeal to the Board of Revision (the board), the total assessed value of the property was reduced by $378,600. The appellant’s appeal to the Assessment and Appeals Committee (the committee) was not successful. The issues on appeal were: a) whether the committee erred in upholding the board’s conclusion that the assessor could make corrections to the assessment model in the context of the appellant’s appeal without initiating an appeal alleging errors in that model; 2) whether the committee erred in its interpretation of s. 225(2) of The Municipalities Act (Act); and 3) whether the committee erred in determining the assessor’s decision to correct alleged errors in the assessment model was subject to deference.
HELD: The issues were determined as follows: 1) for a taxing authority to change an aspect of the assessment model, it must file its own notice of appeal. Section 225 of The Municipalities Act (Act) requires that only changes specifically sought in a notice of appeal can be granted. The board’s role is limited to correcting or changing the aspects of the assessment that are put into issue by the notice of appeal. SAMA was not successful in its argument that changes to decrease the assessed value could be made without its filing a notice of appeal. The appellate body’s (the board’s or the committee’s) remedial authority extends only to correcting specific errors that are raised in a notice of appeal. The specific error alleged by the appellant was the omission of a vacant land sale. The other errors alleged were the direct consequence of that omission. The committee erred in law when it failed to recognize that the issue before the board was whether the model was in error in the manner identified by the appellant, and what change in the assessment flowed from the correction of that error once that error was shown to exist. The appeal court concluded that it was not possible to justify the adjustments SAMA wanted, and the board made, to the MAF on the basis that the appellant had put them into issue in their notice of appeal. The committee erred by failing to recognize that the board’s jurisdiction extended only to addressing and correcting for the omission of the vacant land sale from the land analysis and further errors that flowed directly from that erroneous omission. The SAMA changes were a re-analysis of the MAF; 2) the appeal court found that the committee was correct in understanding that s. 225(2) was applicable in the appellant’s appeal. Section 225(2) prohibits a taxpayer from taking advantage of a decrease in a land assessment without having to account for other changes that directly and necessarily flow from that decrease. The appeal court did not, however, agree with SAMA that all aspects of the improvement calculation are in play once an appeal is made concerning the land. The committee erred in law when it interpreted s. 225(2) as providing a reason or justification to expand the scope of the appeal to encompass the changes to the assessment that went beyond the correction of errors identified in the appellant’s notice of appeal; and 3) the committee did not err regarding deference. The committee did not determine that the assessor’s decision to correct the alleged errors was subject to deference. The committee’s decision dismissing the appeal was set aside. The parties argued that the matter should not be remitted back to the committee, but rather should be remitted back to SAMA to make the appropriate calculations. The appeal court did not know where the authority for that order came from. The parties were given leave to return the matter to the appeal court panel if they wished to make submissions in that regard. Costs were awarded to the appellant for both the leave to appeal application and the appeal.