nan THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2009 SKCA 138 Date: 20091216 Between: Docket: 1219 HDL Investments Inc. et al and City of Regina and Saskatchewan Assessment Management Agency Respondents Coram: Cameron, Hunter and Wilkinson JJ.A. Counsel: Leonard D. Andrychuk, Q.C for the Appellants Byron Werry for the Respondents Appeal: From: The Saskatchewan Municipal Board Assessment Appeals Committee Heard: October 30, 2008 Disposition: Appeal Dismissed Written Reasons: December 16, 2009 Written Reasons: The Court CAMERON J.A [1] This appeal concerns the assessment for municipal tax purposes of a building located in the City of Regina and used commercially as an enclosed shopping mall, known as the “Normanview Mall”. The building, which is owned by the appellant company, HDL Investments Inc., was assessed in each of the years 2003 and 2004 on the basis of its “fair value” as determined by the City Assessor. The company was dissatisfied with the Assessor’s determination of fair value and appealed the assessment to the local Board of Revision, then to the Assessment Appeals Committee of the Saskatchewan Municipal Board. The appeals were allowed in part, but the company remained dissatisfied. So it applied for leave to appeal to this Court under section 33.1 of The Municipal Board Act, S.S. 1988-89 c. M-23.2. It obtained leave to appeal on several grounds alleging error of law on the part of the Committee. All relate to the determination of the fair value of the building and, more particularly, to the market adjustment factor used in that determination. [2] The City Assessor determined the fair value of the building by the replacement cost method prescribed by The Saskatchewan Assessment Manual. This method was described as follows by Sherstobitoff J.A. in Cadillac Fairview Corp. v. Saskatoon (City), 2000 SKCA 84 (CanLII), [2000] 11 W.W.R. 89: nan Under the manual, an assessor is required to value improvements at their replacement cost according to the classifications and schedules of costs set out in the manual. From the replacement cost, the assessor is required to deduct depreciation, which includes any physical deterioration and any abnormal functional or economic obsolescence, calculated from formulas prescribed in the manual. The assessor is then to calculate and apply market adjustment factor in accordance with the manual. The result is the "fair value" at which the improvements must be assessed. 10 The market adjustment factor, or MAF, is intended to modify what would otherwise be "fair value" derived alone from replacement cost, less depreciation. It introduces an element of market value in the interests of achieving comparative "fair value" that is closer to market value than it would otherwise be, bearing in mind that the dominant consideration in valuing improvements for municipal taxation purposes is equity in the nature of comparative fairness. 11 According to the manual, the MAF is calculated from sales of comparable properties in the same or similar neighbourhoods. The assessor is required to analyse arms-length sales to arrive at median ratio of market value, as reflected by sales, to depreciated replacement cost, calculated in accordance with the manual. The ratio established for group of properties is the MAF. The object is to bring the fair value of improvements close to market value in the interest of achieving greater equity. [3] With this method in mind, the City Assessor calculated the replacement cost of the building, deducted depreciation, and multiplied the resulting figure by market adjustment factor, or MAF, of 1.31. He derived this MAF from the sales of four other enclosed shopping malls located in the City of Regina: Sherwood Village Mall, Northgate Mall, Southland Mall, and Victoria Square Mall. More specifically he derived this MAF from the sale price of each as determined by him on application of the governing provisions of Documents 4.1.6, 1.1.6, and 1.1.2(c) of the Assessment Manual. [4] Document 4.1.6 requires an assessor, when determining market adjustment factors by the sales comparison method, to “determine…the sale price” pertaining to the sale of comparable properties. Document 1.1.6 states that “each sale price” used to this end must: 1) result from an arm’s length sale; AND EITHER 2) satisfy each of the following criteria; a) represent the fee simple interest in the property; b) not include atypical financing terms and conditions; c) not include non-realty items such as personal property, business concerns and other items that are not considered real property; d) not include atypical conditions of sale; and e) represent market conditions as of the base date; OR 3) with respect to each of the criteria listed in point that is not satisfied, be capable of being adjusted, if warranted, and in fact be adjusted, if warranted, in accordance with the applicable rules and calculation procedures relating to “Sale Price Adjustments”. Document 1.1.2 (c) defines the term “arm’s length sale” to mean: (i) transfer of real property for cash or cash equivalents in an open market between willing, unrestricted, unrelated, knowledgeable, seller and buyer who are both seeking to maximize their position; and (ii) registered in accordance with The Land Titles Act on or before December 31, 1998; [5] With these requirements in mind the City Assessor sought and obtained information relating to the sales of each of the malls he relied upon to calculate the MAF. He did so by means of sale verification questionnaire he forwarded to the parties following the sales, asking them about the price paid, the relationship between them, the terms of the sale, and so on. Based on the responses he came up with the MAF in issue. [6] Thus the assessment of the Normanview Mall came to rest on the City Assessor’s determination of its fair value, which in turn came to rest on his determination and application of MAF of 1.31 derived from the sales of four other enclosed shopping malls, including the Northgate, Southland, and Victoria Square Malls. [7] The appellant company thought the City Assessor had erred in including the sale of these three malls in the array of sales he used to calculate the MAF and had therefore erred in determining the fair value of the building. It also thought that, even if the Assessor had correctly included the three sales, he erred in failing to fully adjust the sale price of the Northgate and Southland Mall sales to reflect typical market value transactions as required by the adjustment provisions of Document 1.1.6 of the Manual. Hence the company appealed its 2003 assessment to the Board of Revision. The Board dismissed the appeal, and the company then appealed to the Assessment Appeals Committee. [8] While the appeal to the Assessment Appeals Committee was pending, the 2004 assessment came down. It drew the same objections from the company and spawned similar appeal to the Board of Revision. This time the Board partially allowed the appeal. Based on new information that had come to light regarding the sale of the Northgate Mall, the Board held that the Assessor could not use this sale in calculating the MAF. It went on to hold, as it had before, that he could use the sales of the Southland and Victoria Square Malls for this purpose. In addition, it held that he need not adjust the sale price of the Southland Mall any further but thought he should make further adjustment, however slight, to the sale price of the Victoria Square Mall. In the result, the Board ordered the Assessor to rework the assessment, especially in light of the removal of the sale the Northgate Mall from the array of sales from which the MAF was to be derived. The company remained dissatisfied and again appealed to the Assessment Appeals Committee. [9] The Committee heard the two appeals together. It, too, thought the sale of the Northgate Mall did not qualify for inclusion in the array of sales from which the MAF was derived. As for the sales pertaining to the Southland and Victoria Square Malls, the Committee was not convinced the Board of Revision had erred in approving the Assessor’s use of these sales in calculating the MAF. Nor was the Committee convinced the sale prices warranted further adjustment. In the result, the Committee reduced the MAF from 1.31 to 1.06 and directed the Assessor to re-determine the fair value of the building for the purposes of the 2003 and 2004 assessments. [10] The reduction in the MAF had significant impact on the assessments, but still the company remained dissatisfied. Hence it initiated the appeal to this Court. It obtained leave to appeal on the grounds the Committee erred in law as follows: 1. It misinterpreted or misapplied Documents 1.1.2(c) and 1.1.6 of the manual in using the sale of the Southland Mall to determine the MAF. 2. It failed to decide an issue on appeal before it, namely whether the transfer of the Victoria Square Mall was an “arm’s length sale” within the meaning of that term as defied in Document 1.1.2(c). 3. It misinterpreted or misapplied section 171 of The Cities Act and Document 1.1.6 of the Manual in finding that the City Assessor could rely as he did on the sales verification questionnaires to determine whether the sale prices of the Southland and Victoria Square Mall sales required adjustment. 4. It ignored evidence in deciding that the sale price pertaining to the sale of the Southland Mall did not require adjustment pursuant to Document 1.1.6. 5. It misconstrued the decisions of the Board of Revision, or ignored evidence, in deciding that the sale of the Victoria Square Mall did not require adjustment pursuant to Document 1.1.6. [11] The grounds take issue one way or another with the inclusion of the sales of the Southland and Victoria Square Malls in the array of sales from which the MAF was derived or, alternatively, with the adjustment of the sale price of these properties. The grounds are perhaps most efficiently addressed having regard, first, for the sale of the Southland Mall and the issues to which this sale gave rise on appeal, and then to the sale of the Victoria Square Mall and the issues associated with that sale. I. The Southland Mall Sale [12] On July 31, 1991 Ontrea Inc., the investment arm of the Ontario Teachers Pension Fund, purchased 50% interest from Cadillac Fairview Corporation Limited in three shopping malls, one located in Toronto (the Hillcrest Mall), one in Winnipeg (the Polo Park Mall), and one in Regina (the Southland Mall). The sale was made by way of single agreement featuring single purchase price of $177,500,000. Such sales are commonly referred to as “portfolio sales.” While the sale featured single sale price, the Agreement of Purchase and Sale allocated portion of the price to the acquisition of the interest in each of the Malls. It allocated $19,000,000 to the acquisition of the 50% interest in the Southland Mall. [13] Following the completion of the sale, Cadillac Fairview transferred an undivided one half interest in the Southland Mall to Ontrea. The affidavit of value accompanying the registration of the transfer stated that the value of the property was $19,000,000 in aggregate, as did the certificates of title that issued. [14] Upon being notified of the transfer by the Land Titles Office, the City Assessor asked Ontrea to complete questionnaire, commonly known as Sale Verification Form. He did so in reliance upon sections 171 and 172 of The Cities Act, S.S. 2002, c.C-11.1. These sections enable municipal tax assessors to gather the information they need to perform their assessment duties. [15] Thus section 171 empowers assessors to request certain information or documents from persons expected to be in possession thereof. For example, subsection 171(1) empowers an assessor to request "any information or document that relates to or might relate to the value of any property from any person who owns, uses, occupies, manages, or disposes of the property." The section then goes on to impose correlative duty upon these persons to supply the assessor with the requested information or documents. Subsection 171(4), for instance, requires these persons, within prescribed time, to provide the assessor with all of the requested information and documents that are in the possession or control of that person. [16] Then there is section 172, the object of which is to buttress this power of the assessor and secure the performance of this duty of the person. Section 172 renders it an offence, under subsections (1) and (2), to fail to furnish the assessor with relevant information or documents, or to willfully furnish the assessor with false information. In addition subsection 172(5) bars consideration, on the appeal of an assessment, of any information that is substantially at variance with information provided by the appellant pursuant to section 171. [17] It was in reliance on these provisions, then, that the Assessor requested completion of the Sale Verification Form. He did so for the purpose, among others, of allowing him to determine an appropriate market adjustment factor for use in assessing enclosed shopping malls. And he did so with an eye to the requirements of Documents 4.1.6, 1.1.6, and 1.1.2(c) of the Assessment Manual. In the light of these requirements the Sale Verification Form requested disclosure of the price paid for the property, the relationship between the parties, the nature of the financing associated with the sale, the relationship between the price paid and the market value, and so on. In response, Cadillac Fairview, on behalf of itself and Ontrea, wrote the Assessor, saying this: The parties apportioned the sale price of $177,500,000 among the three Malls, allocating $19,000,000 to the sale of the interest in the Southland Mall. The sale was recorded as “a cash transaction” with no external financing involved. The sale price was believed to represent “the fair market value” of the properties and had been apportioned among the properties on the basis of their 1991 “net operating income capitalized at an appropriate rate.” [18] In reliance on this information, and the affidavit of value accompanying the transfer of title, the Assessor concluded that the “sale price” of the 50% interest in the Southland Mall was $19,000,000 and resulted from an “arm’s length sale”. He also concluded that the sale price represented half the fee simple interest in the property, did not include any atypical financing or other conditions of sale, and did not include any non-realty items. So he was satisfied no adjustment of the sale price was required, except for adjustments to reflect the fact, first, that about seven years had elapsed between the date of the sale (July 31, 1991) and the base date for the calculations envisioned by the Manual (June 30, 1998); and, second, that the sale involved only 50% interest, making it necessary to double the sale price for the purpose of working with it in the calculation of the MAF. [19] Thus, the Assessor relied upon the sale pertaining to the Southland Mall in calculating the MAF applicable to enclosed shopping malls, and decided the sale price did not require any but the two adjustments referred to above. In the result, and having regard for the three other sales he relied upon, he came up with MAF of 1.31. He applied this MAF in each of the following years up to and including the years 2003 and 2004. [20] The Board of Revision, in its review of the 2003 and 2004 assessments for error on the part of the Assessor, could see nothing requiring him to either exclude this sale from consideration in calculating the MAF or to adjust the sale price beyond the adjustments he had already made. Nor did the Assessment Appeals Committee find any material error on the part of the Board of Revision regarding the sale. [21] That, then, brings us to the company’s dissatisfaction with the decision of the Committee regarding this sale. The company contends the Committee erred in law in upholding the Board’s conclusions to the effect (a) that the sale qualified for inclusion in the array of sales from which the MAF was derived or, alternatively, (b) that the sale price did not require further adjustment. Let us consider these in turn. (a) The inclusion of the sale [22] In the submission of the appellant company, the Committee erred in law in several respects in upholding the Board’s decision that the sale of the Southland Mall qualified for inclusion in the determination of an appropriate MAF. [23] First, the company says the Committee erred in law in failing to recognize that this sale, contrary to what the Board made of it, did not amount to an “an arm’s length sale” because Ontrea was not “willing” buyer. In the submission of the company, Ontrea was not willing buyer inasmuch it was under duress in the sense it could not have purchased an interest in the Toronto and Winnipeg malls (an interest it wanted), without at the same time agreeing to purchase an interest in the Regina mall (an interest it did not want). In addressing the matter the Committee said this: The Board gave little weight to the notion that the Ontario Teachers Pension Fund (Ontrea) was under some duress, and were required to take the Southland Mall as part of the “package” and further to retain the services of the former owner as managers. The Committee agrees with the Board on this point, it may well have been part of the agreement but there was no evidence to indicate that the buyer could not walk away from the deal [24] Even assuming the Committee’s decision in this regard gives rise to question of law and not of fact, we are by no means persuaded to the view the Committee erred. Although Ontrea, sophisticated corporate investor, may have preferred not to acquire the interest in the Regina mall, preferring instead to acquire an interest in only the Toronto and Winnipeg malls, the company could hardly have been found to be under duress. And in our opinion the company cannot be said on the facts of the case to have been anything but “willing, unrestricted, unrelated, and knowledgeable” buyer within the meaning of the definition of the term “arm’s length sale” found in Document 1.1.2 (c) of the Assessment Manual. [25] Second, the company says the Committee erred in law by failing to appreciate that the sale pertaining to the Southland Mall was part of portfolio sale that included properties located outside Saskatchewan and could not, therefore, be used for the purpose of calculating the MAF. It could not be used because Document 1.1.6 of the Manual only allows for the use of “sales of property located in the Province of Saskatchewan.” [26] This submission undoubtedly raises question of law, but the idea that such portfolio sales cannot be used for this purpose was laid to rest by this Court in HDL Investments Inc. et al v. City of Regina and Saskatchewan Assessment Management Agency, 2008 SKCA 47 (CanLII), 310 Sask. R. 44. The reasons for judgment of Jackson J.A. on behalf of the Court in that case (paras. [50] to [60]) make it clear that an assessor may have regard for the sale of property located within the municipality even though the sale be part of portfolio sale that includes other properties located outside the Province. The case stands for the general proposition that if the sale price of such property can be ascertained and verified by an assessor then the sale price can be used for the purposes of determining an appropriate market adjustment factor by the sales comparison method. [27] Third, the company says the Committee erred in law in failing to give effect to the fact the City Assessor did not “determine the sale price” of the interest in the Southland Mall as required by the Assessment Manual. Instead the Assessor merely substituted for the sale price the vendor and purchaser’s allocation of $19,000,000 to the purchase of this interest, in effect abdicating his responsibilities. Moreover, this allocation was mere estimate of the value of the property, according to the argument, and an unreliable estimate at that, for the parties to the transaction used an unrealistic capitalization rate of 9% for the purpose of the allocation, rather than the realistic rate of 12.75%. Had they used the latter the value would have amounted to $12,900,000, not $19,000,000. [28] To the extent this submission raises question of law we do not agree with it. The City Assessor, acting on the authority of sections 171 and 172 of The Cities Act, sought and obtained information from the parties to the transaction for the three-fold purpose of putting him in position to determine: (i) whether the $19,000,000 sworn to in the affidavits of value and recorded on the certificates of title constituted the “sale price”; (ii) whether the sale price resulted from an “arm’s length sale”; and (iii) whether and to what extent the sale price warranted adjustment. [29] On the basis of the information he obtained, the Assessor concluded that the $19,000,000 constituted the sale price of the property. In other words he “determined…the sale price” having regard for the information at his command, including the information supplied to him by the parties to the transaction. Hence the Board of Revision was not satisfied that the Assessor had erred in relation to the determination of the sale price. Nor was the Committee convinced the Board had erred. In arriving at its decision the Committee noted that the very purpose of the sale verification step taken by the Assessor, and the information it yielded, was to enable him make such determination in accordance with the provisions of the Assessment Manual. [30] Picking up on the Committee’s reliance of the sale verification information in arriving at its conclusion, the appellant company submitted that as matter of law the Committee relied excessively on the sale verification and the information it yielded, ascribing more importance to this information than is warranted by the Assessment Manual or section 171 of The Cities Act. For the reasons that follow we do not agree. [31] To begin with, the Committee did not misapprehend the importance, generally, of the sale verification process and the information it yields. The importance lies in the fact municipal assessors are highly dependent on this information in the performance of their assessment duties and are called upon to make number of decisions largely on the basis of fact that emerges through this process, process provided for by sections 171 and 172 of The Cities Act. The import of these sections was considered by this Court in City of Saskatoon v. Boardwalk Property Holdings Ltd and Saskatchewan Assessment Management Agency, 2008 SKCA 174 (CanLII), 314 Sask. R. 290. Speaking on behalf of the Court in that case said this: [11] These provisions are vital to the assessment regime. It could not function without them, given the need for municipal tax assessors to determine the fair value of improvements in accordance with the principles, rules and formulas of the Saskatchewan Assessment Manual… [12] An assessor's duty to determine and apply an appropriate market adjustment factor in arriving at the fair value of an improvement illustrates, as well as any, the purpose of sections 171 and 172 of the Act and their importance to the assessment regime. The proper performance of this duty is wholly dependent upon the assessor having access to information regarding property sales. Hence, owners and others in possession of information relating to the value of any property, including information and documents pertaining to the purchase and sale of property, must furnish the assessor with that information pursuant to section 171. An owner who fails to do so, or who wilfully furnishes the assessor with false information, is guilty of an offence under section 172. Not only that, should an assessment appeal be taken, section 172 bars boards of revision, as well as the Assessment Appeals Committee, from considering evidence of information that is substantially at variance with the information provided to the assessor. [32] Hence, the sale verification information obtained by the Assessor in relation to the sale of the Southland Mall was of considerable importance and merited considerable weight. This is not to say it was open to either the Board of Revision or the Committee to have regard for the sale verification information to the exclusion of such other information before the Board as was relevant and not excluded from consideration by subsection 172(5) of The Cities Act. However, it must be born in mind that weighing evidence in the context of fact-finding is primarily the province of the fact-finder and, in the absence of the unreasonable, does not generally open the door to interference. It must also be born in mind that there exists presumption in favour of the correctness of an assessment and therefore an onus on the appellant to establish that the Assessor erred: Estevan Coal Corporation v. R.M. of Estevan No. 5, 2000 SKCA 82 (CanLII), [2000] W.W.R. 474. [33] With this mind, we note that, while the Committee relied heavily on the sale verification information in upholding the decision of the Board of Revision regarding the sale price of the Southland Mall, the Committee did not reach this conclusion on the basis of the sale verification information to the exclusion of other relevant information open to consideration. This is clear from the reasons for its decision. It said this: Unlike the Northgate sale, no evidence was brought forward to the Board or Committee concerning the Southland sale that would render the information provided in the verification form invalid. [34] It also said that the way in which Cadillac Fairview and Ontrea had allocated the overall purchase price among the various properties included in the portfolio sale was consistent with the evidence as to how this ought to be done, saying: An expert witness for the appellant testified that the proper way to establish value of the portfolio is to value the individual parts and then sum them to arrive at the total. The evidence presented in the form of the sales agreement for the portfolio indicates this is exactly what happened in this case. The sales agreement indicates that indeed each of the malls in the portfolio was valued separately using its own net operating income multiplied by capitalization rate that reflects the economic conditions for each mall. This would indicate to the committee the conditions that affected the value of the Southland Mall were taken into consideration at the time…. [35] Finally, to suggest that Cadillac Fairview and Ontrea used an unrealistic capitalization rate in allocating $19,000,000 of the portfolio sale price to the Southland Mall sale (and overvalued the property in consequence), is largely beside the point. The point is not whether Ontrea paid more for the property relative to what someone else, over decade later, thought it was worth. The point is how much Ontrea in fact paid for its share of the fee simple interest in the property, assuming it acquired its interest on an arm’s length sale. Beyond that the point is whether and to what extent the amount paid required adjustment pursuant to Document 1.1.6. [36] That, then, brings us to the issue of whether the Committee erred in law in upholding the decision of the Board of Revision regarding the adjustment of the sale price of the Southland Mall. (b) The adjustment of the sale price [37] As noted above, the Assessor made two adjustments to the sale price, one to account for the time that had elapsed between the date of the sale and the base date, and the other to account for the fact the sale involved 50% interest in the property. Beyond this he concluded that no further adjustment was required. In other words he concluded, based largely upon the affidavit of value accompanying the transfer and upon the sale verification information he obtained from Cadillac Fairview and Ontrea, that the sale price satisfied the remaining criteria of Document 1.1.6, namely that: (a) it represented the fee simple interest in the property, (b) did not include atypical financing terms and conditions; (c) did not include any non-realty items; and (d) did not include atypical conditions of sale. [38] Let us consider in greater detail the basis upon which the Assessor reached this conclusion. The affidavit of value expressly stated that “the value of the parcel of land together with all buildings and other improvements” was $19,000,000 in aggregate. And the certificates of title that issued following the sale expressly linked the $19,000,000 to the “fee simple interest” in the property. In addition, the sale verification information supplied by Cadillac Fairview and Ontrea on the heels of the sale expressly disclosed that the sale price reflected the fair market value of the property; that the sale was not accompanied by any atypical financing terms or conditions; and that the sale was recorded as cash transaction. There is nothing whatever in any of this to suggest the price included any non-realty item or that the sale was accompanied by any atypical conditions. Indeed, the clear implication is to the contrary. And the person who supplied the sale verification information on behalf of Cadillac Fairview and Ontrea, both sophisticated corporations, was identified as the “Manager, Assessment Valuations” of Cadillac Fairview, fact that served to lend an added measure of reliability and weight to the sale verification information. [39] Again, the appellant company contended that the Committee made too much of the sale verification information in deciding that the Board had not erred in upholding the Assessor’s conclusion that the sale price did not require further adjustment. And again it was said that the Assessor in effect abdicated his responsibilities by effectively leaving it to the parties to the transaction to determine if any further adjustments were required. For reasons already expressed, we do not generally agree with these propositions. [40] Indeed, we, too, are of the opinion it was open to the Assessor, based on the affidavit of value, the certificates of title, and the sale verification information he obtained on the heels of the sale, to reasonably conclude that no further adjustments to the sale price were required. This is not to say his conclusion was beyond effective challenge on appeal to the Board of Revision, subject to the presumption in favour of the correctness of an assessment and the resulting onus on the appellant to show it was made in error. However, based on the evidence adduced before the Board, the company failed to satisfy the Board that the sale price warranted any adjustment beyond that already made by the Assessor, and failed to convince the Committee that the Board had erred in this regard. [41] That is all very well, according to the company, but having regard for the whole of the evidence before the Board, both the Board and the Committee fell into error. The Committee is said to have erred in law in two respects. First, it failed to appreciate that the sale price included “non-realty item”. Second, it failed to decide whether the Board erred in finding that the sale price was unaffected by any “atypical financing terms” or any “atypical condition of sale”. [42] As for the first, the company says that on the whole of the evidence the sale price clearly included mark-up or premium that amounted to “non-realty item”. The argument in support of this proposition unfolded along these lines: Ontrea agreed to pay Cadillac Fairview $19,000,000 for 50% interest it the Mall on the undertaking by Cadillac Fairview to continue to manage the Mall. This undertaking was of significant value because of Cadillac Fairview’s expertise and muscle in the market place, and was rolled into the purchase price, constituted premium, and called for adjustment of the sale price to account for this “non-realty item”. [43] Whether Ontrea paid such premium is essentially matter of fact. The Board of Revision found that no such premium had been paid, and the Committee upheld this finding. In our judgment this finding cannot be said to have been so devoid of evidentiary support as to expose it to interference. [44] True, there was some opinion evidence that the price of $19,000,000 included premium attributable to the continued management of the Mall by Cadillac Fairview, though no one would venture an opinion about whether and to what extent this might be quantified. Some of the opinion evidence was of questionable admissibility, some of questionable reliability, and some of questionable weight, though it is unnecessary to elaborate in light of the fact the appeal to this Court is limited to questions of law or jurisdiction, and in light of what follows. [45] The Agreement of Purchase and Sale makes no mention of any such premium even though the terms used in the Agreement are defined at length and with precision. Nor does the allocation of the purchase price, recorded in the Agreement and made on the basis of the capitalized net income generated by the Mall, make mention of the payment of such premium. Nor does the affidavit of value accompanying the transfer (and the expert opinion evidence of its import), suggest that non-realty item of this nature found its way into the sale price. Indeed, the implication is to the contrary. Nor does the sale verification information supplied by Cadillac Fairview and Ontrea shortly after the completion of the sale suggest the payment of any such premium. Moreover, the evidence disclosed that separate management agreement was entered into on the closing of the sale (as anticipated at the time of the sale), wherein it was agreed that Cadillac Fairview would manage the Mall in return for 4% of the gross revenue derived from the Mall, plus expenses. [46] The point is threefold: Having regard for the whole of the evidence, together with the presumption in favour of the correctness of the assessment and the resulting onus upon the appellant to demonstrate error, we are of the opinion it was open to the Board of Revision to find that no such premium had in fact been paid; that it was not open to the Committee, in reviewing the Board’s decision for error, to interfere with this finding of fact; and that it is not open to us, in reviewing the Committee’s decision for error of law, to reverse the Committee’s decision in this respect. [47] With that, we may turn to the second of the errors the Committee is said to have made in relation to the adjustment of the sale price of the Southland Mall, namely that it failed to decide whether the Board erred in finding that the sale price was unaffected by any “atypical financing” or “atypical condition of sale”. [48] The submission in support of this proposition is founded on evidence before the Board demonstrating that on the closing of the sale Cadillac Fairview and Ontrea entered into “Co-owners Agreement”, as well as number of supplementary agreements to implement the terms of that Agreement. Under the Co-owners Agreement, the two corporations, as co-owners of the Mall and the leases pertaining to the Mall, agreed upon their respective rights, obligations, entitlements, and benefits, including the means to secure performance as against one another, namely by means of charge, pledge, debenture, buy-sell, and so on covering their respective 50% interests. They also agreed to lease the Mall to an operating tenant, Southland Leaseholds, subsidiary of the two corporations, and to cause Southland Leaseholds to enter into management agreement with Cadillac Fairview providing for the management of the Mall by the latter for the prescribed fee of 4% of gross revenue, plus out-of-pocket expenses. [49] Based upon the foregoing, the appellant company contended that, notwithstanding the indications to the contrary in the sale verification information obtained by the Assessor soon after the sale, it is apparent the sale featured number of atypical financing terms or atypical conditions of sale. The Assessor did not think so, having been furnished several years later with the Co-owners Agreement and those associated with it, nor did the Board of Revision. Having regard for the way in which this issue was presumably put to the Board, it saw nothing in the Agreement of Purchase and Sale, the Co-owners Agreement, and the agreements arising out of the latter, to warrant further adjustment of the sale price. It said this: The agent also asserts that the sale price should be adjusted for atypical financing. Clause 6.14 of the agreement provides that the Agreement for Sale constitutes the entire contract with respect to the transaction. The fact that the parties entered into subsequent dealings of complex nature to conduct their business is irrelevant for assessment purposes to the transfer of an ownership interest and the leasehold interests obtained under the Agreement for Sale. The transaction as provided for in the Agreement for Sale was cash purchase. The agent argued that cash purchase in itself was not market norm. In determining what is typical, the Board must consider the marketplace for shopping malls not the marketplace in general. Large corporations and pension funds purchase shopping malls. Pension funds have enough money to be able to make cash purchases and cash purchase of shopping mall by pension fund is not atypical. No adjustment to the sale price needs to be made for cash purchase. [50] These findings were not expressly addressed by the Committee, though it is not clear why. Perhaps the matter was not argued or, if argued, was thought to be obviously lacking in merit. Or perhaps it was overlooked. Whatever the explanation, this much is clear: The matter was raised as ground of appeal and, on the assumption it was argued and not abandoned, the Committee was obliged to determine it. And not having done so, the Committee erred in law: Cairns Developers Ltd. v. City of Regina and Saskatchewan Assessment Management Agency, 2000 SKCA 89 (CanLII); 199 Sask. R. 51. [51] The question, then, is one of remedy. Must this branch of the case be remitted to the Committee for decision, or can we decide it? There seems no good reason to suppose we cannot do so, bearing in mind the nature of the issue and what was said of our jurisdiction in Cairns Developers Ltd. v. City of Regina and Saskatchewan Assessment Management Agency. Since the Board found that the Assessor had not erred in concluding that the sale price did not warrant further adjustment pursuant to the governing provisions of Document 1.1.6 of the Manual, the issue is whether this finding is unreasonable or unsupported by the evidence, or is grounded in misapprehension of these provisions. This amounts to question of law, so it is within our jurisdiction to decide it. [52] This said, one might quibble with the Board’s reasoning at turn or two, but in our opinion there exists no tenable basis to interfere with its decision in this respect. It was open to the Board, having regard for the sale verification information, the Agreement of Purchase and Sale, and the Co-owner’s Agreement, to reasonably conclude that the Appellant company had failed to demonstrate error on the part of the Assessor in deciding that no adjustment for atypical financing or atypical conditions of sale was required. [53] As noted by the Board, what is typical or atypical depends on the context in which the issue arises. In this instance, the issue arose in the context of cash sale of 50% interest in shopping mall in operation at the time of the sale. Since the mall was then in operation, naturally there were leases in existence, leases which in the ordinary course fell to be assigned to and assumed by the purchaser (to the extent of its interest), on completion of the sale. And naturally it became necessary in the ordinary course for the two owners to agree upon the allocation of the benefits and burdens of equal ownership of the mall, including the means to secure, as between one another, the realization of the benefits and the assumption of the burdens. Likewise, it became necessary in the ordinary course for the two owners to agree upon the management of the mall. To this end they agreed, first, to incorporate company and lease the land and building to that company as operating tenant and, second, to cause that company to engage the vendor to manage the property. [54] On the face of it, there is nothing apparently atypical in any of this if one adopts the notion, as the Board correctly did, that what is or is not atypical has to be determined in context. Just as importantly, there is nothing in any of this to sustain the notion the Board erred in finding that these post-sale agreements were not shown to have affected the sale price of the 50% interest in the land and building purchased by Ontrea pursuant to the Agreement of Purchase and Sale. There is, of course distinction between, on the one hand, the sale of the 50% interest in the land and building and, on the other, the business concerns that followed in the wake of that sale. The Co-owners Agreement and the steps taken to implement it had to do with the latter and did not serve apparently to affect the sale price of the land and building. So we are of the opinion there is no tenable basis to interfere with the decision of the Board in this regard. [55] For these reasons we are of the view that, while the Committee may have erred in failing to decide the ground of appeal taking issue with the adjustment of the sale price, the error is immaterial. [56] On the whole, then, we can see no basis for interfering with the Committee’s conclusions that (a) the sale pertaining to the Southland Mall qualified for inclusion in the array of sales from which the MAF was to be derived and (b) that the sale price did not warrant adjustment beyond the two adjustments made by the Assessor. 2. The Sale of the Victoria Square Mall [57] On January 22, 1992 Edgefund Realty Investment Corporation transferred title to the Victoria Square Mall to Bellfund Realty 420 Corporation. The certificate of title that issued on registration of the transfer stated the value of the property to be $18,950,000. On being informed of the transfer, the City Assessor asked Bellfund Realty 420 to complete the usual Sale Verification Form. Harry John Riva, as agent for the corporation, completed the Form and returned it to the Assessor, informing him that: The sale price was $18,985,000 as agreed upon between the parties on April 4, 1991. Payment of the price was financed in the amounts, first, of $11,761,000 at the rate of 11% for term of approximately one and half years and, second, of $7,224,000 at the rate 3% for term of approximately twelve years. The price was attributed to the land and building in the respective amounts of $4,321,000 and $14,664,000. The sale was not made between related businesses and neither the seller nor the buyer was compelled to act. The total sale price represented the fair market value of the property. [58] Having been supplied with this information, the Assessor concluded that the sale price was $18,985,000, that it resulted from an arm’s length sale, and that it required no adjustment except to account for the time that had elapsed between the date of the sale (January 22, 1992) and the base date (June 30, 1998). In the result, the Assessor thereafter included this sale in determining the MAF he used in assessing enclosed shopping malls. [59] Some eleven years later, when the MAF was being challenged as incorrect, Mr Riva addressed this sale in an affidavit sworn on June 5th, 2003 “for submission to the Assessment Appeal Committee of the Saskatchewan Municipal Board.” He did so as vice-president and corporate counsel for Bimcor Inc., company engaged in the business of providing advice and management to pension fund corporations such as Bellfund Realty. He said he was involved in the Victoria Square Mall transaction (presumably as an advisor to Bellfund Realty, since he did not purport to have any connection to Edgefund Realty). [60] He then went on to describe how Edgefund Realty had come to own the Mall in the first place. He did not say how he had come by this knowledge. But he said Edgefund Realty had bought the land and building from Cairns Homes Limited (in 1984 it seems) on cash-to-mortgage basis, saying Edgefund Realty assumed an existing mortgage on the property (presumably 1983 mortgage by Cairns Homes in favour of Investors Syndicate in the original amount of $12,100,000) and paid the balance of the purchase price with cash raised though the sale of bonds to three pension funds, Northern Telecom Pension Trust Fund, Bell Canada Pension Fund, and CBC Pension Fund. The obligation under the bonds were secured by trust company (National Trust Company) which took second mortgage on the property (in the amount of $7,500,000 it seems) to secure its potential liability on the bonds. At the time Edgefund Realty bought the Mall from Cairns Homes, according to Mr Riva, pension funds were prohibited by law from buying real estate encumbered by third-party mortgage, so companies such as Edgefund Realty would buy properties such as this on financing terms such as these, making it possible for pension funds to participate in the real estate market in this way. [61] Mr Riva continued, saying that by 1991 the law had changed, so when Edgefund Realty decided in 1991 to sell the Mall, Bellfund Realty purchased it. It purchased it subject to the two mortgages, and paid fee to Edgefund Realty in connection with the transaction. He did not specify the amount of the fee or the rationale for its payment. However, he did say that Bellfund Realty, which was wholly owned by the three pension funds, bought the Mall on their behalf. He also said that after the completion of the sale the three pension funds forgave the outstanding indebtedness on the bonds. [62] Mr Riva went on in his affidavit to venture the opinion (or advance the argument) that the transaction between Edgefund Realty and Bellfund Realty was not an arm’s length sale for the reason, among others, that the property had not been exposed to the open market and that the sale constituted conversion of the bond holder’s interest in the property to an ownership interest. [63] He also went on, in justification of the nature of his response to the Sale Verification Form he had completed some eleven years earlier, to say that the information was true but incomplete because the Sale Verification Form did not require him to address such matters as the relationship between the parties, the exposure of the property to the market, the method by which the parties arrived at the sale price, and the basis upon which they arrived at the value of the property. They arrived at the value, he added, by means primarily of an income based appraisal, though other methods of valuing the property were also employed. [64] Mr Riva’s affidavit made its way before the Board of Revision on the appeal of the 2004 assessment. However, the agent representing the appellant company did not call him to testify. Nor did the agent produce the Agreement of Purchase and Sale between Edgefund Realty and Bellfund Realty. So based largely on the affidavit the agent contended that the transaction did not constitute “sale” but “bond redemption” and that, even if it were otherwise, the sale was not made “at arm’s length”. The Assessor thought otherwise. And the Board was not satisfied the Assessor was wrong about this. [65] In arriving at its conclusion, the Board noted in its 2004 decision that the transaction relating to the Victoria Square Mall clearly entailed change of ownership and (even though the Agreement of Purchase and Sale had not been produced) it was evident that Edgefund sold the property to Bellfund and Bellfund paid for it. How Bellfund paid for it, the Board said, “should not cloud the essence of the transaction.” And how Bellfund choose to handle the financing of the purchase after the fact “does not affect the transfer of the property between unrelated businesses (as was verified by Bellfund)—between willing, knowledgeable, and unrestricted parties for fair market value.” [66] Hence, the Board found that the Assessor had not erred in treating the sale of the Victoria Mall as an arms length sale, concluding in consequence that he had not erred in relying upon this sale in calculating the MAF. [67] The Board then went on of its own motion to order the Assessor to adjust the sale price, however slightly, by increasing it to account for the fact the two mortgages assumed by the purchaser carried, in the first instance, higher than market-rate of interest and, in the second, lower than market-rate. The Board did so in light of the Assessor’s testimony, and in doing so it suggested that such adjustment, while unlikely to substantially affect the MAF, was nevertheless required in light of the mandatory nature of the adjustment provisions of Document 1.1.6 of the Manual. In response, the Assessor increased the sale price and, in turn, increased the MAF specifically attributable to this property (the “target MAF” as it is called). He increased the target MAF from 1.06 to 1.07. [68] Dissatisfied with the Board’s treatment of the sale of the Victoria Square Mall, the appellant company appealed to the Committee. It did so on the grounds in aggregate that the Board erred in finding (in 2003 or 2004 as the case may be) that: (i) the transaction constituted sale; (ii) the sale was made at arm’s length; and (iii) the sale price warranted adjustment, however slight. The first was apparently abandoned, leaving only the second and third to be dealt with by the Committee. [69] In the reasons for its decision the Committee said nothing of the second, having to do with whether or not the sale constituted an arm’s length sale. Instead, it concentrated on whether the sale price required adjustment, not by reason of the rates of interest on the mortgages (as thought by the Board of Revision), but by reason of the bond redemption associated with the sale (as contended for by the appellant). The Committee said this: …the appellant has alleged that there needs to be an adjustment made because the sale [featured] redemption of bonds as part of the financing arrangement in the sale of the mall. The purchaser did not think it significant enough to note in the sale verification questionnaire. There was no “red flag” raised by the answers given that there was need for any further adjustments. The Board found it hard to believe that the filling out of the forms would be taken lightly by the purchaser and found that the assessor had used due diligence in determining that the sale price needed no adjustment for redemption of the bonds. The Committee finds that the Board did not err on this point and the sale of the Victoria Square should remain as part of the sales analysis in the determination of the MAF…. [70] This is all the Committee had to say about the subject of adjustments. In other words it said nothing, at least expressly, about the Board’s order requiring the Assessor to adjust the sale price, however slightly, to account for the fact the two mortgages against the title to the property carried, on the one hand, higher than market-rate of interest and, on the other, lower than market-rate. While the Committee did not expressly mention the matter, it appears to have given effect to the ground of appeal placing the matter in issue, for the Committee directed the Assessor to use target MAF of 1.06, not 1.07. [71] It concluded by saying three sales were to be used to determine the median MAF, namely the sale of the Sherwood Village Mall (about which there was no dispute) and the sales of the Southland and Victoria Square Malls. These sales, it said, yielded median MAF of 1.06, saying this is the MAF that was to be used by the Assessor in determining the fair value of enclosed shopping centres such as the Normanview Mall. [72] The grounds of appeal upon which the appellant company obtained leave to appeal the Committee’s decision regarding the sale of the Victoria Square Mall relate one way or another as did those regarding the sale of the Southland Mall, to: (a) the inclusion of the sale of the Victoria Square Mall in the array of sales from which the MAF was derived and (b) the adjustment of the sale price. (a) The inclusion of the sale [73] As remarked upon earlier, the Board of Revision was not satisfied the Assessor erred in treating the sale as an “arm’s length sale”, within the meaning of the definition of that term in Document 1.1.2(c). In other words the Board was not satisfied that the sale fell to be excluded from the array of sales relied upon by the Assessor in determining the MAF. [74] In reviewing the decisions of the Board, the Committee did not address the question of whether it might have erred in this regard. Again, it is not clear from the record why the Committee did not do so. Assuming the ground of appeal pertaining to the matter was not abandoned and was argued, it was incumbent upon the Committee to decide the question. And on that assumption its failure to do so constitutes error: Cairns Developers Ltd. v. City of Regina and Saskatchewan Assessment Management Agency. [75] Once again, bearing in mind the nature of the matter there is no reason to suppose we should remit this branch of the case to the Committee for decision. Since the Board found that the Assessor did not err in treating this sale as an “arm’s length sale” within the meaning of Document 1.1.2(c) of the Manual, the issue is whether this finding is unreasonable or unsupported by the evidence, or is based on misinterpretation or misapplication of the requisites of Document 1.1.2(c). As before, this amounts to question of law and is therefore within the jurisdiction of the Court to determine. [76] Turning to the determination of the question, we observe that the evidence before the Board consisted of the sale verification information supplied to the Assessor by Bellfund Realty in response to the Sale Verification Form, together with the affidavit of Mr Riva. Leaving aside the affidavit for the moment, the sale verification information certainly provided the Board with an ample evidentiary basis for concluding that the Assessor had not erred in treating the sale as an arm’s length sale. The issue, then, is whether the affidavit served to shed decidedly different light upon the question of whether the sale amounted to an arm’s length transaction. [77] In considering the issue, it must be remembered that it was open to the Board, in weighing the evidence before it, to ascribe greater weight to the sale verification information than to the information contained in Mr Riva’s affidavit. After all, he was not called to testify; nor did he or any one else produce the Agreement of Sale and Purchase between Edgefund Realty and Bellfund Realty even though that Agreement constituted the very foundation for the sale. Nor did he identify the source of his purported knowledge of the 1984 sale of the property by Cairns Homes to Edgefund Realty. And his affidavit amounts on the whole to an amalgam of factual assertion, opinion, assumption, argument, and justification. Justification, that is, for his earlier failure to provide the Assessor with more information about whether the sale price resulted from an arm’s length sale. [78] His justification, it may be noted, was not entirely accurate. Moreover it was somewhat disingenuous. He said the Sale Verification Form he completed did not require him to address such matters as the relationship between the parties. That is not so. The Sale Verification Form asked whether the parties were related and whether either was compelled to buy or sell the property as the case may be. And in response, he stated that the parties were not related and not compelled to act. He also said in his affidavit that the Sale Verification Form did not require him to address such matters as the method by which the parties arrived at the sale price, and the basis upon which they arrived at the value of the property. At the least this borders on the disingenuous, because in response to the Sale Verification Form he stated that the sale price amounted to the outstanding indebtedness on the property; suggested that the sale was unattended by any creative financing; and broke the price down between the land, on the one hand, and the building, on the other. In addition, he stated that the sale price represented the fair market value of the property. [79] Having regard for the foregoing, we cannot say that the decision of the Board in the respect under consideration is unsupported by the evidence. Nor can we say the decision is unreasonable in the sense the Board could not reasonably have concluded, based on the evidence and the weight ascribed to it, that the appellant company failed to demonstrate that the sale was not an arm’s length sale. [80] What remains, then, is to consider whether the Board misconstrued or misapplied the term “arm’s length sale” as defined in Document 1.1.2(c). Let us consider this having regard for the several indicia or elements of the definition. [81] To begin with, the term is defined in large part to mean “a transfer of real property for cash or cash equivalents…between willing, unrestricted, unrelated, knowledgeable” buyer and seller. There is little if anything to suggest the Board misconstrued or misapplied these indicia. The sale obviously featured transfer for cash or cash equivalent, and it was quite clearly made between willing and knowledgeable corporations. According to the completed Sale Verification Form, the buyer and seller were unrelated and free of compulsion. [82] Still, the appellant company contended that Edgefund Realty and Bellfund Realty were neither unrelated nor unrestricted. The pension funds, it was said, were in effect the beneficial owners of the Mall and in effect sold it to Bellfund Realty, an entity owned by them. We do not agree. Edgefund Realty was an independent corporation, independent that is of the pension funds and Bellfund Realty. Neither owned shares in Edgefund Realty and it owned the Mall in its own right. True it owned it subject to the two mortgages, one of which secured the obligation under the bonds. The fact the pension funds held the bonds is meaningless in the context of whether Edgefund Realty and Bellfund Realty were related. It is also meaningless in the context of whether either corporation was restricted. The appellant contended otherwise, suggesting it was not open to Edgefund Realty to sell the property without first obtaining the approval of the pension funds. It is not clear why Edgefund might have needed such approval, and this amounts to questionable matter of fact in light of the evidence. To suggest we might reverse the decision of the Board on this basis is untenable. Moreover, there is no evidence to the effect Edgefund Realty was not free to sell the property to anyone else on the same terms upon which it sold the property to Bellfund Realty. [83] Moving the analysis along, then, the definition of “arm’s length sale” also stipulates that both buyer and seller must be “seeking to maximize their position.” The appellant contended that the Board misapplied this element of the definition, for Edgefund Realty could not be seen to have been intent on maximizing its position, not in light of the fact it derived nothing from the sale. This contention can go nowhere in light of the evidence, including the evidence that the corporation obtained relief from the liabilities associated with its ownership of the property, received fee in connection with the sale, and sold the property for fair market value. [84] Thus far into the analysis, it is clear that we do not subscribe to the notion the Board misconstrued or misapplied those elements of the definition of “arm’s length sale” requiring that the sale feature “transfer of real property for cash or cash equivalents…between willing, unrestricted, unrelated, knowledgeable, seller and buyer who are both seeking to maximize their position”. And since, the sale was accompanied by transfer “registered in accordance with The Land Titles Act on or before December 31, 2002”, in the words of the second part of the definition, there remains only one conceivable basis for supposing the Board might have erred as alleged: That it misinterpreted or misapplied the first of the indicia of an “arm’s length sale”, namely that the sale feature transfer of real property for cash or its equivalents “in an open market.” [85] Hence the analysis reduces to whether the Board, faced with Mr Riva’s statement in his affidavit that the Victoria Square Mall was not exposed to the open market, erred in finding that the sale amounted to transfer “in an open market”. In saying the property was not exposed to the open market, Mr Riva presumably meant that it had not been listed for sale or advertised for sale. Assuming this to be the fact (notwithstanding the frailties associated with the affidavit), the question is whether the sale, not having been preceded by listing of the property for sale, or by advertisement, or by some other means of bringing the prospective sale to the attention of other potential buyers, satisfies the requirement of the phrase “in an open market”. [86] What this phrase was intended to add to the heavily laden definition of “arm’s length sale” is not entirely clear. The definition otherwise speaks to transfer for cash or its equivalents between willing, unrestricted, unrelated, and knowledgeable buyer and seller, both seeking to maximize their position. sale that meets these criteria goes long way toward constituting an arm’s length sale in the classical sense. Yet, the phrase “in an open market” must have been intended to add something to the definition. [87] What it was intended to add, or not add, is perhaps best considered in light of the purpose of the provisions of Documents 1.1.2(c) and 1.1.6. Their purpose lies in ensuring the appropriate determination of neighbourhood MAF by the sales comparison method, MAF that reflects the market value of the properties comprising the array of sales used to determine the MAF. As noted in Cadillac Fairview Corp v. Saskatoon (City) (cited earlier), the object of determining and applying market adjustment factor is “to bring the fair value of improvements close to the market value in the interests of greater equity” in assessment. “Market value”, in the context of the scheme of the Manual, is most reliably reflected in the sale prices of comparable properties, provided the prices derive from arm’s length sales, as contemplated by Document 1.1.2(c), and reflect typical market value transactions, as contemplated by Document 1.1.6. So the purpose of the provisions of these Documents is to ensure that the sale price of comparable property is reasonably reflective of the market value of that property before being used in determining an appropriate median MAF. [88] Viewed in this context, the phrase “in an open market” may be seen to have been intended in significant part to ensure that sale “in restricted market” is not used for MAF calculation purposes. Why? Because the sale price of property sold in restricted market, in contradistinction to an open market, is not apt to be sufficiently indicative of the market value of that property to be relied upon for the purpose of determining market adjustment factor by the sales comparison method. restricted market, it might be noted, would include one confined to limited class of potential purchaser, as for example market confined to members of certain sect, let us say, or of certain fraternal organization or family or some such limited class of potential purchasers. [89] The Committee seems to be of similar mind. In City of Regina v. Continental Saxon Holdings Ltd (Appeal 0305/2001and 0326/2001), the Committee said this: 37 The owners argued that in order to meet the definition of arm’s length sale the property has to be advertised on the open market. In the arguments, however, two concepts [open market and exposure to the market] were somehow married by referring to “open exposure”. 38 But the two are separate features of an arm’s length sale. 39 For the Southland or the Northgate sales, the owners did not show that either sale was in any way limited to this purchaser or that the vendor was not “open” to receive or decline offers from any potential purchaser. 40 As to the second requirement of reasonable exposure, lack of exposure is not fatal to the use of sale in the calculation of MAF. If the lack of exposure has an effect that can be measured, then the sale is to be adjusted by that amount, as noted above. [90] It is more difficult at times to identify what statutory phrase or its equivalent means, than what it does not mean. And it is often unwise to remark upon what phrase encompasses, as opposed to what it does not encompass, when there is no need to do so. That is the case here, where the question is whether the phrase in issue operates to exclude from consideration an otherwise arm’s length sale made in the absence of advertising the property for sale, or listing it for sale, or otherwise bringing the prospective sale to the attention of other potential buyers. It will suffice, then, for us to express the opinion the phrase was not intended to operate to exclude such sales. Why? Because that would serve to remove from consideration many otherwise arm’s length sales, sales that are just as indicative of market value as those made following listing, advertisement or whatever. In other words, and in many instances, this would serve to defeat the purpose of the provisions of Documents 1.1.2(c) and 1.1.6. [91] The appellant cited two cases to support its position that the phrase “in an open market” ought be construed to require exposure to the market by advertisement or listing or the equivalent, namely: Canadian Pacific Railway v. Windebank [1917] 1W.W.R. 447 (Man. C.A.); and Wallace v. New Brunswick (Minister of Transportation) (1984), 31 L.C.R 39, (N.B.Q.B.). Given the factual and legal context in which each of those cases played out, we did not find either particularly helpful. This is especially so of the former, but even the latter is distinguishable on the basis of its factual and legislative underlay. [92] On the whole, then, we do not think the decision of the Board, to the extent it sanctioned the Assessor’s use of the Victoria Square Mall in calculating the MAF, is unreasonable or unsupported by the evidence, or is grounded in misinterpretation or misapplication of the governing provisions of the Manual. It follows that such error as the Committee may have made in failing to address the matter is immaterial. (b) The adjustment of the sale price [93] According to the appellant’s fifth and last ground of appeal, the Committee misconstrued the decisions of the Board of Revision, or ignored evidence, in deciding that the sale of the Victoria Square Mall did not require adjustment pursuant to Document 1.1.6. In considering this, it is important to note that this ground of appeal, as advanced on argument before the Court, takes issue with the Committee’s decision in relation only to the order of the Board requiring the Assessor to adjust the sale price to account for the atypical rates of interest on the mortgages. [94] Recall that the Board, in its 2004 decision, ordered the Assessor to adjust the sale price of the Victoria Square Mall, however slightly, to account for the rates of interest on the two mortgages. In doing so, the Board observed that the Assessor had testified to thinking the sale price should have been adjusted to reflect the fact the first mortgage carried higher than market-rate of interest, whereas the second carried lower than market-rate. The Board also observed that the Assessor had testified to thinking such adjustment would serve to slightly increase the sale price but would not significantly affect the MAF. In the light of this testimony, and the mandatory nature of the language of the adjustment provisions of Document 1.1.6, the Board thought it had no choice but to order him to adjust the sale price, “however slight the adjustment will be, for the atypical interest rates on the mortgages”. [95] The Board thought it had no choice in the matter even though, according to the Assessor’s testimony, such adjustment would serve to increase the sale price of the Victoria Square Mall. An increase in the sale price was predestined to increase the MAF specifically pertaining to the sale of the Victoria Square Mall (the “target MAF” as it is called) and therefore the median MAF derived from this and the other sales used by the Assessor in calculating the median MAF. Indeed, the Assessor, acting on the order of the Board, apparently increased the target MAF from 1.06 to 1.07. [96] The implications of making this order seem to have been overlooked by the Board. The order was inevitably bound to lead to an increase in the sale price and, in turn, an increase in the target MAF and the median MAF, the fair value of the subject property, and the assessment. The significance of this lies in the fact the appeal to the Board was taken by the taxpayer, not the City, meaning it was not open to the Board in the absence of cross-appeal by the City to increase the assessment. [97] Presumably, this is what the appellant company had in mind in appealing to the Committee on the ground the Board erred in ordering the Assessor to make this adjustment. And it would seem the Committee thought the Board should not have done so. While the Committee did not specifically address the matter, it found that the sale was to be used on the basis of target MAF of 1.06, not 1.07. Thus, it appears to have concluded, for whatever reason, that the Board ought not to have made the order. If this be right—and it appears to be so—the appellant succeeded in convincing the Committee not to act on the adjustment ordered by the Board. [98] Yet, the appellant, in advancing the ground of appeal under consideration, complained about the Committee’s decision in this regard. The Committee, it said, should have recognized that an adjustment of this nature was required, not one that would serve to increase the sale price as the Board thought, but one that would serve to decrease it, and decrease it substantially. So, the matter morphed into something else by the time it reached the Court. [99] In the circumstances, we are of the opinion it is not open to the appellant, having succeeded in convincing the Committee to disallow the increase in the sale price ordered by the Board, to now claim that the Committee misunderstood the Board’s decision, or overlooked evidence, and that the sale price should be decreased, and decreased substantially, to account for the atypical rates of interest on the mortgages. This would entail opening up the case on this issue, requiring the issue to be remitted to the Board for rehearing and determination, despite the fact the appellant did not appeal to the Board on this basis. Even if it were otherwise, we are not convinced the Committee erred in law by misconstruing the decision of the Board, as alleged in the ground of appeal under consideration, or overlooked evidence. Indeed, it is difficult to credit the premises of this ground of appeal. [100] For these reasons then, we are the opinion this ground of appeal, as argued before the Court, cannot succeed. [101] It follows that the appeal in relation to the treatment of the sale of the Victoria Square Mall fails, as does the appeal concerning the sale of the Southland Mall. There will be judgment accordingly, dismissing the appeal in its entirety, with costs to the respondent, such costs to be taxed in the usual way. [102] In leaving the case, we observe that other companies, owning or operating similar malls, also took issue with their 2003 and 2004 assessments. They, too, appealed to the Board of Revision and then to the Assessment Appeals Committee. And they, too, were granted leave to appeal to this Court. They were granted leave to appeal on the same grounds as those raised by HDL Investments. Counsel for the companies agreed to treat the appeal by HDL Investments as representative of the other appeals and to be bound by the result of this appeal. So the other appeals are also dismissed, with costs in favour of the respondent, such costs to be taxed by the Registrar in accordance with the usual practice. Dated this 16th day of December 2009. “Cameron J.A.” Cameron J.A concur: “Hunter J.A.” Hunter J.A “Cameron J.A.” for Wilkinson J.A.
This appeal concerns the assessment for municipal purposes of a building located in the City of Regina and used commercially as an enclosed shopping mall. The building was assessed in each of the years 2003 and 2004 on the basis of its 'fair value' as determined by the City Assessor. The owner of the building, the corporate appellant, was dissatisfied with the Assessor's determination of fair value and appealed the assessment to the local Board of Revision, then to the Assessment Appeals Committee of the Saskatchewan Municipal board. The appeals were allowed in part, but the corporate appellant remained dissatisfied. It applied for leave to appeal to this Court pursuant to s. 33.1 of The Municipal Board Act. The issues on appeal all relate to the determination of the fair value of the building and, more particularly, to the market adjustment factor used in that determination. The grounds take issue one way or another with the inclusion of the sales of the Southland and Victoria Square Malls in the array of sales from which the MAF was derived, or alternatively, with the adjustment of the sale price of these properties. HELD: Appeal dismissed. The appeal in relation to the treatment of the sale of the Victoria Square Mall fails, as does the appeal concerning the sale of the Southland Mall. The Court notes that other companies, owning or operating similar malls, also took issue with their 2003 and 2004 assessments. They, too, appealed to the Board of Revision and then to the Assessment Appeals Committee. They too were granted leave to appeal to this Court on the same grounds as the appellant in this case. Counsel for the companies agreed to treat this appeal as representative of the other appeals and to be bound by the result of this appeal. These other appeals are also dismissed.