SC 290 Leiren v AA09 (#2) - BC Assessment

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 290-A Leiren v. AA09
See Stated Case #290 also
CAROL K. LEIREN
v.
ASSESSOR OF AREA 09 - VANCOUVER
Supreme Court of B.C. (A900340) Vancouver Registry
Before the Honourable MR. Justice Preston (in Chambers)
John R. Lakes for the Appellant
Peter W. Klassen for the Respondent
Supreme Court of British Columbia (A900340) Vancouver Registry
Vancouver, February 15, 1991
Valuation - Apartment Buildings - Considerations - Equity -
Undervalued Comparable Property - Validity - s. 26 - s. 69 - s. 74
The Appellant appealed the decision of the Assessment Appeal Board made on a reference back
from the Supreme Court by Madam Justice Rowles. The simple question before the Court on
appeal by way of Stated Case was whether or not the Assessment Appeal Board was bound to
follow the decision of the Court of Appeal in Assessor of Area 09 -- Vancouver v. Bramalea
wherein the Court of Appeal had held that equity prevailed over actual value.
HELD: The appeal was allowed.
The Court held that if the determination of actual value results in an assessment that is
significantly higher than that which would bear a fair and just relationship to the assessments of
other similar properties as a whole, then the assessment should be adjusted to accomplish the
equitable result contemplated by section 69 (e).
Reasons for Judgment April 12, 1991
The Assessment Appeal Board has submitted certain questions for the opinion of the Supreme
Court. Section 74 (1) of the Assessment Act, R.S.B.C. 1979 c. 21 provides for this procedure.
That section reads:
74. (1) At any stage of the proceedings before it, the board, on its own initiative or at the request
of one or more of the persons affected by the appeal, may submit, in the form of a stated case for
the opinion of the Supreme Court, a question of law arising in the appeal, and shall suspend the

proceedings and reserve its decision until the opinion of the final Court of Appeal has been given
and then the Board shall decide the appeal in accordance with the opinion.
This is the second time that questions concerning this particular appeal have been submitted to
the Court under section 74 (1). The appeal relates to a 19-suite apartment building in the
Oakridge/Cambie area of the City of Vancouver. This property was assessed for the 1989
Assessment Roll at a value of $1,803,500. The Owner appealed the assessment and at the
hearing of the appeal before the Assessment Appeal Board in October, 1989 questions arose
which caused the Board to avail itself of the procedure provided by section 74 (1). Accordingly, on
January 12, 1990 the Board stated a case containing a number of questions for the Court. A
hearing was held on March 16 and 19, 1990 before Rowles J. and on March 30, 1990 she
remitted the matter back to the Board with answers to the questions submitted.
The Board convened again on June 22, 1990. After hearing submissions the Board submitted
further questions for the opinion of the Court and has once again suspended proceedings
pending receipt of the Court's opinion. These questions are set out in a Stated Case dated
September 12, 1990.
The difficulty experienced by the Board arose from differing interpretations given to the Reasons
for Judgment of the Court of Appeal in British Columbia Assessment Authority and Surrey-White
Rock Assessment District v. Simpson-Sears Ltd. (1981) 27 B.C.L.R. 77 ("Simpson-Sears"). After
this case was stated in September 1990 but before this hearing, the issues raised by the
Simpson-Sears case were considered by a five judge Court in the Court of Appeal in Assessor for
Area 09 (Vancouver) v. Bramalea Limited et al., Unreported, December 14, 1990, Victoria
Registry No. CAV00992 ("Bramalea").
It is common ground on this appeal that the Board did not follow the directions given to them by
Rowles J. The matter must again be remitted to the Board with answers to the second set of
questions and with further directions. Mr. Klassen, on behalf of the Assessor, submits that the
conclusion of the Court of Appeal in Bramalea cannot be reconciled with the directions to the
Board given by Rowles J. and, because her decision was not appealed, the principles of issue
estoppel prevent me from referring the matter back to the Board on a basis other than that upon
which it was referred to them by Rowles J.
I will go on at this point to deal in detail with the questions submitted for the Court's opinion in the
hearing before Rowles J., her opinion and directions to the Board, the second set of questions,
the effect of the Bramalea decision on these proceedings, and my opinion on the matters raised
by the second set of questions.
THE QUESTIONS SUBMITTED TO ROWLES J.
In the Stated Case which accompanied the questions submitted by the Board to Rowles J. the
Board set out the background to their questions as follows:
1. The subject matter of this Stated Case is a two-storey wood-frame apartment building (and lot)
containing nineteen suites, located in the Oakridge/Cambie neighbourhood of the City of
Vancouver.
2. This property was placed upon the 1989 Assessment Roll by the Assessor at a value of
$1,803,500.
3. Both parties to the appeal employed the "Income Approach to Value" in arriving at values for
this property for the appeal before the Board.

4. The Appraiser for the Appellant arrived at a value of $1,265,000. For reasons given in its
decision the Board rejected this value.
5. The actual values the Assessor had determined for the comparable properties for the 1989
Assessment Roll resulted in 1989 roll values of these properties being an average 73% of the
value for which they were sold.
6. The Board concluded, on the evidence before it, that the actual value (that is the amount which
the subject property would have fetched if put up for sale on the open market) was $1,950,000 on
the valuation date for the 1989 Assessment Roll.
7. While section 26 (2) requires the Assessor to determine the actual value of the subject land
and improvements and to enter them at their actual value on the 1989 Assessment Roll the Board
was concerned that if it accepted the value of $1,950,000 an inequity would be created between
the subject property and other similar properties within the same general neighbourhood.
8. Section 69 (1) of the Assessment Act gives the Board the power to determine whether or not
the value of the subject property would bear a just and fair relation to the value at which similar
land and improvements are assessed in the municipality in which it is situated.
9. It is the view of the Board that if the assessments appearing upon the three comparable
apartment buildings, situated in the same general area of Vancouver, is correct, to arrive at a fair
and just relation for the value of the subject property, it would have to be placed on the 1989
Assessment Roll at a value of $1,423,500 (being 73% of its market value of $1,950,000).
10. A copy of the decision of the Board dated the 12th day of January, 1990 is attached hereto
and marked Schedule "A" and a copy of order dated the 19th day of January, 1990 is attached
hereto marked Schedule "B".
Note: Schedules A and B not attached, see 1989 A.A.B. Decisions Blue Book.
The Board submitted the following questions:
1. In considering the value at which a property should be assessed, is the Board required by
section 26 of the Assessment Act to maintain actual (market) value, when faced with evidence
that, by doing so, the value arrived at will not bear a fair and just relation to the value at which
similar lands and improvements are assessed, by the same Assessor, in the same municipality
2. If the Board accepts the evidence of the Assessor as being a better measure of actual value, is
the Board empowered by section 69 (1) (e) of the Assessment Act to determine an assessed
value for the individual parcel under consideration which will bear a fair and just relation to the
value at which similar lands and improvements are assessed in the municipality in which it is
situated
3. If the Board considers itself obliged to value the subject lands and improvements at an actual
value which would not be equitable in comparison to similar lands and improvements, would the
Board err as a result by requiring the Assessor to increase the assessments on the three
comparables presented as evidence to the Board to bring those properties to a comparable value
with the value applied by the Board to the subject property, albeit the comparables were not
appealed
4. If the Board decided that the comparables referred to in evidence had been assessed at less
than what the Board considered to be actual value, would the Board be in error in requiring the

Commissioner to reassess all the residential apartment buildings situate in the affected
neighbourhood for the 1989 Assessment Roll
Two additional questions were placed before the Court, one by the Assessor and one by the
Owner. The question which the Assessor requested be placed before the Court was:
5. Is the Board required to find the actual value of the subject property, when other similar
properties in the municipality are assessed at less than their actual value
The question which the Owner requested be placed before the Court was:
6. Would the Board be in error if it accepted the evidence of the Assessor resulting in a valuation
of $1,950,000 when there is no evidence that the assessments on similar properties in Vancouver
were assessed at which the Assessor is alleging to be actual value and the evidence establishes
that in order to have a fair and just relation the assessment on the subject property would have to
be reduced to a value of $1,423,500
ROWLES J.'S OPINION AND DIRECTIONS TO THE BOARD
Rowles J. answered the questions submitted to the Court as follows:
First, she dealt with questions 3 and 4.
Question 3
In respect to question 3, counsel were in agreement that the Board has no jurisdiction to order an
increase in the assessed value of the three comparable properties. I agree. The Board is limited
to making a decision with reference to the property that has been appealed.
Question 4
In respect to question 4, counsel were also in agreement that the Board has no jurisdiction to
require the Commissioner to make the reassessment contemplated by the question. Again, I
agree. Under s. 69 (1) the Board's jurisdiction is confined to the property which is the subject
matter of the appeal and under s. 69 (2) the Board can only order the Commissioner to reassess
properties in the municipality if it determines "that the assessed value of land and improvements
in a municipality or rural area is in excess of assessed value as determined under s. 26". In this
instance the Board has made no such determination.
She then went on to deal with questions 1, 2, 5 and 6.
Questions 1, 2, 5 and 6
I do not propose to speculate further on what question or questions the Board intended in this
case, based on a series of assumed facts which the Board may or may not find. The questions
are ambiguous, and it is difficult to discern the particular point or points of law on which the Board
seeks an opinion.
The matter is remitted to the Board under s. 74 (6). The Board must determine, if it has not
already been determined, whether or not the assessments on the three comparables are in error.

If the Board's conclusion is that the assessments on the three comparables are in error, I have
already answered the following question in the affirmative:
Is the Board required to maintain actual value, in the face of evidence that three comparable
properties have been erroneously under-assessed
If the Board's conclusion is that the assessed value of the three comparables is correct, that
conclusion must be stated, and the Board must specify the point or points of law on which it
seeks the opinion of the Court.
From questions 1, 2, 5 and 6, and paragraph 9 of the Stated Case, a conclusion is implicit, that is,
that the assessments on three comparables are an accurate reflection of assessments for all or
substantially all similar land and improvements in the municipality. That conclusion or assumption
has not been found as a fact by the Board, and there is no indication in the Stated Case to
suggest that there was evidence before the Board on which such a determination could have
been reached in any event. Mr. Klassen submitted that the Court should remit the Stated Case to
the Board with a direction that it hear further evidence as to the assessed value of all or
substantially all similar properties in the City of Vancouver, before the Board seeks the opinion of
the Court. I agree that whether or not the value at which an individual parcel under consideration
is assessed bears a fair and just relation to the value at which similar land and improvements are
assessed in the municipality in which the property under appeal is situated must be determined
on the basis of evidence before the Board. Therefore the parties must be permitted to address
the Board, and present evidence directed to that issue.
Finally, I wish to make this observation. The Board, from some comments which it made in its
decision, appears to have placed the requirement to assess the property under appeal on the
basis of actual value on the same footing as reaching a fair and equitable result. The decision of
the Court of Appeal in Simpson-Sears made clear that the Board, as its prime requirement, is
required to assess the land under appeal on the basis of actual value.
THE QUESTIONS ON THIS APPLICATION
The Stated Case which is the subject of this application repeats the questions submitted to
Rowles J. and her answers. It then goes on as follows:
4. . . . The Board reconvened on June 22, 1990 to reconsider this matter.
5. The Board found that the value of $1,950,000 presented by the Assessor was the market value
of the subject property. This value was determined without the Board knowing the assessed
values of the three comparable properties (from which the market value of the subject was
concluded).
6. The Appellant requested an opportunity to present evidence of an assessment sales ratio
comparing similar properties to the subject. The Board declined to hear such evidence as in its
opinion, based on the decision of Madam Justice Rowles that because the Board had arrived at
the market value for the subject property, that is, its actual value for assessment purposes, and
since the actual value of the subject property was arrived at from evidence from the market place,
the Board cannot move away from actual value to arrive at equity.
7. The Board further found that it would be a fruitless undertaking to attempt to ascertain the
correctness of the assessments on the three comparable properties for the following reasons:

(a) This would not conclusively establish whether the assessments on other similar land and
improvements in the neighbourhood or in all of Vancouver are incorrect.
7. (b) Even if the assessments on the three comparables are incorrect there is nothing that the
Board can do about it because:
i(i) It is obliged to find the actual value of the subject property (which it has done) and it will not
help anything in the valuation of the subject property if the assessed value of other properties is
incorrect.
7. (b) (ii) The Board is not empowered to order the Assessor to alter the assessed values of other
properties, unless they are in excess of assessed value as determined under section 26 (see
section 69 (2) ).
7. ( c) Even if the assessments on the comparable properties are correct (which the Board
doubts), there is nothing the Board can do about it, so long as it is satisfied that it has arrived at
the correct actual value of the subject.
The Board then frames the following questions for the Court on this application:
THE QUESTIONS on which the Board is required to ask for the opinion of the Supreme Court
are:
1. Did the Assessment Appeal Board err in law by finding that it had to apply its own opinion of
"market value" as the actual value despite the fact that the result would be an inequitable and
discriminatory assessment
2. Did the Assessment Appeal Board err in law by misinterpreting the decision of the Court of
Appeal in Simpson-Sears v. Assessor of Area #14 - Surrey-White Rock as that decision would
apply to this appeal
3. Did the Assessment Appeal Board err in law by refusing to hear the evidence which would be
submitted to establish a value which would be a fair and equitable value as the actual value of
this property
4. Did the Assessment Appeal Board err in law because it refused to hear evidence to establish
the required assessment values as was directed by Madam Justice Rowles in the application
made by the Appeal Board for an opinion under section 74 (1) of the Assessment Act
It is clear that the Board did not follow the procedure recommended by Rowles J. She said in her
reasons (at p. 18):
The Board must determine, if it has not already been determined, whether or not the
assessments on the three comparables are in error.
She made it clear that such determination is necessary to provide a factual basis for the
questions that the Board submitted to her. But that determination is not the end of the process.
She said (at p. 17):
The Board has apparently assumed that the assessed value of the three comparables is
representative of assessed values of substantially all other similar properties in the municipality.
Unless there is some evidentiary basis for such a conclusion, which has not been stated by the
Board, the assumption is unwarranted.

She went on to direct that the Board consider evidence concerning the assessed value of similar
lands and improvements in the municipality.
I agree that whether or not the value at which an individual parcel under consideration is
assessed bears a fair and just relation to the value at which similar land and improvements are
assessed in the municipality in which the property under appeal is situated must be determined
on the basis of evidence before the Board. Therefore, the parties must be permitted to address
the Board, and present evidence directed to that issue.
Since Rowles J. provided her directions to the Board, the Court of Appeal has provided further
guidance in this area of the law in Bramalea. The Court dealt extensively with the conflict which
may sometimes exist between a finding of actual value in relation to a particular property and a
value which reflects a fair and just relationship to the assessed values of other similar properties.
Taylor J.A. gave the Reasons for Judgment of the Court. He said (at p. 13):
It is my view that the principles mentioned give the taxpayer two distinct rights: (i) a right to an
assessment which is not in excess of that which can be regarded as equitable; and (ii) a right not
to be assessed in excess of actual value.
He went on to say (at p. 19):
It does not, in my view, follow that a taxpayer's land can be assessed, or reassessed, on a view
of actual value which results in an assessment significantly higher than would bear a fair and just
relationship to assessments on other similar properties as a whole. Such a broad interpretation of
the effect of the Simpson-Sears decision would deny the taxpayer the right to equitable treatment,
a right which the law recognizes and which the Board is in my view required to uphold.
Section 69 of the Assessment Act reads, in part, as follows:
(1) In an appeal under this Act . . . the Board may determine . .
(a) whether or not the land or improvements, or both, have been valued at too high or too low an
amount;
(1) (e) Whether or not the value at which an individual parcel under consideration is assessed
bears a fair and just relation to the value at which similar land and improvements are assessed in
the municipality or rural area in which it is situated;
The principles relevant to this Stated Case that emerge from Bramalea can be summarized as
follows:
1. The Assessment Appeal Board may grant relief on either of the grounds set out in subsections
(a) or (e). The Board, however, has no power to change assessments of other properties which
are not the subject of the appeal to resolve any anomalies that result.
2. As a result of subsections (a) and (e) the taxpayer has two distinct rights. He or she has a right
to an assessment that:
(1) is not in excess of that which can be regarded as equitable.
(2) is not in excess of actual value.

3. Valuation of property is not always an exact process. It may be that there are a range of actual
values that are equally appropriate in any individual case. There also may be a range of values
that are equitable between taxpayers. When these two ranges overlap a Board will be able to
determine actual value and achieve equity within the range of overlap. When the ranges do not
overlap the conflict between the Board's duty to determine actual value and achieve equity must
be resolved by giving preference to one principle over the other.
4. If the assessment of actual value results in an assessment that is significantly higher than that
which would bear a fair and just relationship to assessments of other similar properties as a
whole, then the assessment should be adjusted to accomplish the equitable result contemplated
by s. 69 (e).
Question 2
This question reads:
Did the Assessment Appeal Board err in law by misinterpreting the decision of the Court of
Appeal in Simpson-Sears v. Assessor of Area #14 - Surrey-White Rock, as that decision would
apply to this appeal
Some guidance can be obtained from the Reasons for Judgment of the Court of Appeal in
Bramalea. Taylor J.A. said (at p. 18):
In the Simpson-Sears case this Court was not, in my view, concerned with the resolution of a
conflict between the Assessor's duty to assess at "actual value" and the requirement that he do
so in such a way as to ensure equity between similar properties. It was concerned with resolution
of a conflict which arose when the taxpayer claimed it was entitled to have its lands assessed on
the same basis as immediately adjacent similar land which the Board found had been assessed
below actual value, rather than on the same basis as similar land elsewhere in the municipality,
land assessed at a value found by the Board to represent its actual value and that also of the land
under appeal.
It was in those circumstances that this Court said that the requirement that assessments be at
"actual value" should be the "dominant consideration" in resolving the conflict. In the Stated Case
before me the Board indicates that it has found actual value of the subject property and that it did
not need to determine whether the assessed values of the three comparable properties were
correct in satisfactorily arriving at its conclusion. It must therefore go on to apply the principles set
out in Bramalea. It has not done so, therefore the answer to question two must be "Yes".
Questions 1 and 3
The Board erred in finding that it had to apply its own opinion of market value as the actual value
without hearing evidence submitted to establish a value that would bear a fair and just
relationship to other properties as a whole in accordance with s. 69 (1) (e). The Reasons for
Judgment of the Court of Appeal in Bramalea make it clear that this is a necessary part of the
process contemplated by s. 69. The answer to questions 1 and 3 is "Yes".
Question 4
Question 4 reads as follows:

Did the Assessment Appeal Board err in law because it refused to hear evidence to establish the
required assessment values as was directed by Madam Justice Rowles in the application made
by the Appeal Board for an opinion under section 74 (1) of the Assessment Act
I assume from this question that the Board is referring to the assessment values of the three
comparable properties.
The Board was directed to determine whether or not the assessments on the three comparable
properties were in error because of the ambiguity of the questions submitted to Rowles J. by the
Board. Rowles J. alluded to this (at p. 18):
I do not propose to speculate further on what question or questions the Board intended in this
case, based on a series of assumed facts which the Board may or may not find. The questions
are ambiguous, and it is difficult to discern the particular point or points of law on which the Board
seeks an opinion.
The matter is remitted to the Board under s. 74 (6). The Board must determine, if it has not
already been determined, whether or not the assessments on the three comparables are in error.
It appears from the wording of the Stated Case submitted to me that the Board has come to the
conclusion that it can properly assess the actual value of the subject property without reference to
the three comparables. If that is a considered decision after hearing submissions on the point, I
see no necessity for the Board to now determine whether the assessments on the three
comparables are in error. In that event, I would answer the fourth question "No". If the Board has
not considered submissions on the point it should do so and go on to decide whether it can
properly assess the actual value of the subject property without reference to the three
comparables.
I cannot accept Mr. Klassen's submission that the directions given by Rowles J. are inconsistent
with the interpretation placed on Simpson-Sears by the Court of Appeal in Bramalea. I have,
earlier in these reasons, indicated that her Reasons for Judgment require that the Board hear
further evidence to determine whether the assessment of the subject property bears a fair and
just relation to the value at which similar lands and improvements are assessed in the
municipality in which the subject property is situated. Her concluding comments regarding the
Simpson-Sears case now have to be applied in light of the judgment of the Court of Appeal in
Bramalea.
The case is remitted to the Board.