Gander International Airport Authority Inc. v. Gander (Town), 2011 NLCA 65

• Judge: Green, C.J.N.L., Welsh, Rowe, Barry and White, JJ.A.
• Court: Court of Appeal (Newfoundland)
• Case Date: October 04, 2011
• Jurisdiction: Newfoundland and Labrador
• Citations: 2011 NLCA 65;(2011), 313 Nfld. & P.E.I.R. 125 (NLCA)

Airport Authority v. Gander (2011), 313 Nfld. & P.E.I.R. 125 (NLCA);

    974 A.P.R. 125

MLB headnote and full text

Temp. Cite: [2011] Nfld. & P.E.I.R. TBEd. OC.001

Town of Gander (appellant) v. Gander International Airport Authority Inc. (respondent)

(08/61; 2011 NLCA 65)

Indexed As: Gander International Airport Authority Inc. v. Gander (Town)

Newfoundland and Labrador Supreme Court

Court of Appeal

Green, C.J.N.L., Welsh, Rowe, Barry and White, JJ.A.

October 4, 2011.

Summary:

The Gander International Airport Authority (GIAA), a not-for-profit corporation, was responsible for the Gander International Airport. The Municipal Assessment Agency determined the fair market value of the Airport under the Assessment Act to be $24.8M resulting in notices of assessment in 2004 and 2005 of approximately $254,000 for real property taxes each year. The GIAA appealed the notices of assessment to an Assessment Review Commissioner, arguing that the assessor had erroneously determined the fair market value of the Airport using the cost approach. GIAA argued that there was no market for the Airport and that, therefore, a nominal value of $1 was the only assessable value of the Airport that could be applied under the Act. The Commissioner upheld the assessor's use of the cost approach for the determination of the fair market value of the Airport. GIAA appealed. On appeal, the assessor submitted a revised assessment in the aggregate amount of $14.754M.

The Newfoundland and Labrador Supreme Court, Trial Division, in a decision reported at 277 Nfld. & P.E.I.R. 146; 850 A.P.R. 146, allowed the appeal, set aside the assessor's notices of assessments for 2004 and 2005 and set aside the Commissioner's decision. The court directed that the assessments for 2004 and 2005 should be amended to reflect a nominal assessed value of $1 for the Airport. The Town of Gander appealed.

The Newfoundland and Labrador Court of Appeal, Green, C.J.N.L. and Barry, J.A., dissenting, dismissed the appeal.

Real Property Tax - Topic 3622

Valuation - Business property - Market value - Methods of assessment - The Gander International Airport Authority (GIAA), a not-for-profit corporation, was responsible for the Gander International Airport - The Municipal Assessment Agency determined the fair market value of the Airport under the Assessment Act to be $14.754M resulting in notices of assessment in 2004 and 2005 for real property tax purposes - The GIAA appealed the notices of assessment to an Assessment Review Commissioner, arguing that the assessor had erroneously determined the fair market value of the Airport using the cost approach - The GIAA argued that there was no market for the Airport and, therefore, a nominal value of $1 was the only assessable value of the Airport that could be applied under the Act - The GIAA leased the Airport from the federal government - The Airport could only be used for that purpose and could not be sold - The GIAA operated with a deficit almost every year - There would be no potential buyer for the property with its restricted use - The Commissioner upheld the assessor's use of the cost approach for the determination of the fair market value - Harrington, J., allowed GIAA's appeal, set aside the notices of assessments and set aside the Commissioner's decision - This was a special or limited purpose property - The court directed that the assessments should be amended to reflect a nominal assessed value of $1 for the Airport - The Newfoundland and Labrador Court of Appeal, dismissed the Town of Gander's appeal - The trial judge did not err in concluding that the Airport was properly assessed at $1 - Where an alternate use of the property was not possible, it could not be said that, if sold on the open market, a willing buyer would offer more than a nominal amount - See paragraphs 11 to 40.

Real Property Tax - Topic 3665

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

Cases Noticed:

Powell v. Kippens (Town) et al. (1996), 142 Nfld. & P.E.I.R. 187; 445 A.P.R. 187 (Nfld. T.D.), refd to. [para. 9].

Newterm Ltd. v. St. John's (City) (1988), 74 Nfld. & P.E.I.R. 328; 231 A.P.R. 328 (Nfld. C.A.), refd to. [para. 9].

Courtney v. Cleary (2010), 299 Nfld. & P.E.I.R. 85; 926 A.P.R. 85; 2010 NLCA 46, refd to. [para. 10].

Canada (Attorney General) v. Western Higbie et al., [1945] S.C.R. 385, refd to. [para. 13].

3163083 Canada Ltd. v. St. John's (City) (2005), 245 Nfld. & P.E.I.R. 1; 730 A.P.R. 1; 2005 NLTD 32, affd. (2005), 252 Nfld. & P.E.I.R. 290; 756 A.P.R. 290; 2005 NLCA 76, refd to. [para. 27].

Montreal (City) v. Sun Life Assurance Co., [1952] 2 D.L.R. 81 (P.C.), refd to. [para. 29].

Canadian National Railway et al. v. Vancouver (City), [1950] 4 D.L.R. 807 (B.C.C.A.), refd to. [para. 35].

Calgary (City) v. Municipal Government Board (Alta.) et al. (2004), 339 A.R. 393; 312 W.A.C. 393; 2004 ABCA 10, refd to. [para. 35].

Office Specialty Ltd. v. Assessment Commissioner of the York Assessment Office, [1975] 1 S.C.R. 677; 2 N.R. 612, refd to. [para. 52].

McMurray Bowling Ltd. v. Fort McMurray (New Town) and Assessment Appeal Board (Alta.) (1979), 20 A.R. 556 (Q.B.), refd to. [para. 55].

Montreal v. Canada (Attorney General), [1923] A.C. 136; 70 D.L.R. 248 (P.C.), refd to. [para. 55].

Phillips and Taylor v. Sault St. Marie (City), [1954] S.C.R. 404, refd to. [para. 55].

Reference Re Goods and Services Tax, [1992] 2 S.C.R. 445; 138 N.R. 247; 127 A.R. 161; 20 W.A.C. 161, refd to. [para. 55].

Banner Coal Co. v. Gervais, [1922] 3 W.W.R. 564 (Alta. C.A.), refd to. [para. 55].

Trizec Manitoba Ltd. v. Winnipeg (City) (1986), 42 Man.R.(2d) 98; 28 D.L.R.(4th) 161 (C.A.), leave to appeal dismissed (1986), 74 N.R. 240 (S.C.C.), refd to. [para. 55].

Statutes Noticed:

Assessment Act, R.S.N.L. 1990, c. A-18, sect. 17 [para. 19].

Authors and Works Noticed:

Bonbright, James C., The Valuation of Property: A Treatise on the Appraisal of Property for Different Legal Purposes (1st Ed. 1937), in Shevchuk, John H., Special Purpose and Market Value: A Legal Perspective (2007), pp. 40 to 62 [para. 46].

Hogg, Peter W., Constitutional Law of Canada (5th Ed.) (2007 Looseleaf Supp.), points 10.2(a), 10.2(b) [para. 14].

Shevchuk, John H., Special Purpose and Market Value: A Legal Perspective (2007), pp. 40 to 62 [para. 46].

Counsel:

Jamie M. Smith, Q.C., for the appellant;

Michael J. Crosbie, Q.C., for the respondent.

This appeal was heard on May 12, 2011, before Green, C.J.N.L., Welsh, Rowe, Barry and White, JJ.A., of the Newfoundland and Labrador Court of Appeal.

The judgment of the Court of Appeal was delivered on October 4, 2011, and the following opinions were filed:

Welsh, J.A. (Rowe and White, JJ.A., concurring) - see paragraphs 1 to 40;

Barry, J.A., dissenting (Green, C.J.N.L., concurring) - see paragraphs 41 to 56.