3163083 Canada Ltd. v. St. John's (City), (2005) 252 Nfld. & P.E.I.R. 290 (NLCA)

• Judge: Roberts, Welsh and Rowe, JJ.A.
• Court: Court of Appeal (Newfoundland)
• Case Date: December 29, 2005
• Jurisdiction: Newfoundland and Labrador
• Citations: (2005), 252 Nfld. & P.E.I.R. 290 (NLCA);2005 NLCA 76

3163083 Can. v. St. John's (2005), 252 Nfld. & P.E.I.R. 290 (NLCA);

    756 A.P.R. 290

MLB headnote and full text

Temp. Cite: [2006] Nfld. & P.E.I.R. TBEd. JA.004

City of St. John's (appellant) v. 3163083 Canada Limited (respondent)

(05/32; 2005 NLCA 76)

Indexed As: 3163083 Canada Ltd. v. St. John's (City)

Newfoundland and Labrador Supreme Court

Court of Appeal

Roberts, Welsh and Rowe, JJ.A.

December 29, 2005.

Summary:

A Labatt's brewery was assessed as having a market value of $3,575,000, including $450,280 attributed to brewing tanks, for the 2001 to 2003 tax years. Labatt's appeal to the Assessment Review Court was allowed. The brewing tanks were ruled not to be "real property". The $450,280 attributed to the tanks was removed from the assessment. The assessment was further reduced to $2,700,000 based on the replacement cost approach. Labatt appealed again, submitting that the assessed value should be $552,000 based on the direct comparison approach. The City challenged the ruling that the tanks were not "real property", but did not file a notice of appeal, submitting that it was unnecessary to do so where the issue was squarely before the court for review.

The Newfoundland and Labrador Supreme Court, Trial Division, in a judgment reported ((2005), 245 Nfld. & P.E.I.R. 1; 730 A.P.R. 1, allowed Labatt's appeal. The market value of the property was $552,000 based on direct comparisons. The City, not having appealed the ruling respecting the brewing tanks, was precluded from challenging that ruling, although the court did opine that the tanks would constitute assessable real property. The City appealed.

The Newfoundland and Labrador Court of Appeal dismissed the appeal. The trial judge did not err respecting the assessed value of the property (excluding the brewery tanks). The court disagreed with the trial judge's obiter finding that the brewery tanks would constitute assessable real property.

Real Property Tax - Topic 1561

Persons and property liable to assessment - Real property - Land defined - Including improvements, fixtures and structures - [See second Real Property Tax - Topic 3920 ].

Real Property Tax - Topic 3622

Valuation - Business property - Market value - Methods of assessment - The land and buildings comprising a Labatt's brewery was determined by the Assessment Review Court as having a market value of $2,700,000 based on the cost approach (depreciated replacement cost) - That method of assessment was chosen because there was no market for a brewery, hence no comparable sales - Labatt appealed, submitting that the assessed value should have been $552,000 based on the direct comparison approach - The trial judge allowed the appeal - The market value of the property was $552,000 based on direct comparisons - The St. John's Assessment Act required that fair market value be determined on the basis of the highest and best use of the property for which there was a market - Since there was no market for a brewery, the highest and best use for which there was a market was general industrial use - Accepting the comparative sales of similar industrial use properties used by Labatt's expert witness, the court accepted that the fair market value of the land and building was $552,000 - The Newfoundland and Labrador Court of Appeal affirmed the trial judge's decision - See paragraph 9.

Real Property Tax - Topic 3665

Valuation - Business property - Considerations - Use restrictions (incl. special use properties) - [See Real Property Tax - Topic 3622 ].

Real Property Tax - Topic 3702

Valuation - Business property - Replacement cost - Circumstances when replacement cost may be used - [See Real Property Tax - Topic 3622 ].

Real Property Tax - Topic 3920

Valuation - Particular business properties - Brewery - [See Real Property Tax - Topic 3622 ].

Real Property Tax - Topic 3920

Valuation - Particular business properties - Brewery - The trial judge stated that although it was unnecessary to decide the issue, the court would be "quite comfortable in concluding that ... brewing tanks [in a brewery being assessed] are 'real property'" for the purposes of s. 2(1)(j) of the St. John's Assessment Act - The Newfoundland and Labrador Court of Appeal disagreed, opining that brewery tanks were not assessable real property - The tanks were part of the brewing machinery and equipment housed in the building - They were not part of the building - See paragraphs 12 to 25.

Real Property Tax - Topic 7204

Assessment appeals - Practice - Issues on appeal - Labatt's brewery property was assessed as having a market value of $3,575,000, including $450,280 attributed to brewing tanks - Labatt's appeal to the Assessment Review Court was allowed - The brewing tanks were ruled not to be "real property" - The $450,280 attributed to the tanks was removed from the assessment - In a separate ruling, the assessment was further reduced to $2,700,000 based on the replacement cost approach - Labatt appealed the assessment, submitting that the assessed value should be $552,000 based on the direct comparison approach - The City did not file a notice of appeal, but challenged the ruling respecting the tanks on the basis that since the ruling on the tanks was in issue in Labatt's appeal, a notice of appeal was unnecessary - The trial judge rejected the submission - The ruling on the tanks was a "stand alone ruling, with separate reasons and a separate filing number" - Absent an appeal by the City, the court lacked jurisdiction to deal with the ruling on appeal - The City could not "piggy back" on Labatt's assessment appeal respecting the land and building - The Newfoundland and Labrador Court of Appeal agreed that absent the City filing a notice of appeal, the decision that the brewery tanks were not assessable could not be appealed - See paragraph 10.

Cases Noticed:

Metals & Alloys Co. Ltd. v. Regional Assessment Commissioner, Region No. 11 and East York (1985), 7 O.A.C. 241; 49 O.R.(2d) 289 (C.A.), leave to appeal denied (1985), 60 N.R. 77; 17 D.L.R.(4th) 576 (S.C.C.), refd to. [para. 24].

St. Lawrence Cement Inc. v. Regional Assessment Commissioner, Region No. 15 (1985), 52 O.R.(2d) 545 (S.C.), refd to. [para. 24].

Greenmelk Co. v. Chatham (Township), [1955] O.W.N. 757 (C.A.), refd to. [para. 24].

Acadian Pulp & Paper Ltd. v. New Brunswick (Minister of Municipal Affairs) (1973), 6 N.B.R.(2d) 755 (C.A.), refd to. [para. 24].

Irving Oil Co. v. New Brunswick (Minister of Municipal Affairs) et al., [1977] 1 S.C.R. 310; 8 N.R. 25; 13 N.B.R.(2d) 37; 13 A.P.R. 37, refd to. [para. 24].

Statutes Noticed:

St. John's Assessment Act, R.S.N.L. 1990, c. S-1, sect. 2(1)(j) [para. 13].

Counsel:

Linda S. Bishop, for the appellant;

Michael J. Crosbie, for the respondent.

This appeal was heard on November 21, 2005, before Roberts, Welsh and Rowe, JJ.A., of the Newfoundland and Labrador Court of Appeal.

On December 29, 2005, Rowe, J.A., delivered the following judgment for the Court of Appeal.