Executive Director of Assessment (N.B.) v. Ferme Montagnaise Inc. et al., (2003) 266 N.B.R.(2d) 293 (TD)

• Judge: LaVigne, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: September 29, 2003
• Jurisdiction: New Brunswick
• Citations: (2003), 266 N.B.R.(2d) 293 (TD);2003 NBQB 385

Assessment Director v. Montagnaise Inc. (2003), 266 N.B.R.(2d) 293 (TD);

    266 R.N.-B.(2e) 293; 698 A.P.R. 293

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Temp. Cite: [2003] N.B.R.(2d) TBEd. NO.004

Executive Director of Assessment (applicant) v. Ferme Montagnaise Inc., Couvoir Westco Ltée, Ferme Du Moulin Inc., Enterprise Chapi Inc., M.J. Michaud Poultry Farm Ltd., Samalex Inc., La Ferme Amalex Ltée, Ferme De La Rivière Inc., La Ferme Frontière Inc., La Ferme Nordic Inc., Entreprise Veroco Inc., and Louiselle Bouchard (respondents)

(E/M/5/03; 2003 NBQB 385)

Indexed As: Executive Director of Assessment (N.B.) v. Ferme Montagnaise Inc. et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Edmundston

LaVigne, J.

November 4, 2003.

Summary:

The respondent taxpayers owned real properties which were improved with poultry barns, garages and sheds for poultry farming. The Executive Director of Assessment (Di­rector) assessed their properties. The tax­payers appealed the assessments on the basis that they constructed the buildings at costs lower than that set out in standard costing manuals. The Assessment and Planning Appeal Board allowed the appeals. The Director appealed.

The New Brunswick Court of Queen's Bench, Trial Division, allowed the appeal.

Real Property Tax - Topic 3503

Valuation - General principles - Meaning of "real and true value" - The respondent taxpayers owned real properties which were improved with poultry barns, garages and sheds for poultry farming - The Exec­utive Director of Assessment assessed their properties - The taxpayers appealed the assessments on the basis that they con­structed the buildings at costs lower than that set out in standard costing manuals - The Assessment and Planning Appeal Board allowed the appeals - The Director appealed - The New Brunswick Court of Queen's Bench, Trial Division, held that the Board erred in law in relying on the taxpayers' actual costs to the exclusion of all other costs - By using the taxpayers' actual reduced costs as replacement cost, the Board wrongly introduced subjective valuation as the test for actual ("real and true") value - See paragraphs 46 to 69.

Real Property Tax - Topic 3503

Valuation - General principles - Meaning of "real and true value" - The respondent taxpayers owned real properties which were improved with poultry barns, garages and sheds for poultry farming - The Exec­utive Director of Assessment assessed their properties - The taxpayers appealed - The Assessment and Planning Appeal Board allowed the appeals - The Director ap­pealed - The New Brunswick Court of Queen's Bench, Trial Division, agreed that "in cases of construction for special pur­poses the assessor must necessarily cal­culate the replacement value in order to determine the real value. The absence of reliable market evidence compels resort to replacement cost as a means of arriving at the real and true value. It was therefore appropriate in this case to use a depreci­ated replacement cost analysis." - See paragraph 55.

Real Property Tax - Topic 3506

Valuation - General principles - Prohibition against arbitrary methods - Taxpayers owned real properties which were im­proved with poultry barns, garages and sheds for poultry farming - They appealed their tax assessments - The Assessment and Planning Appeal Board applied the same per meter cost to all improvements on all real properties, irrespective of their nature and use as poultry barn, garage or utility shed - The Board also added a $500 value for land to each building on all real prop­erty, irrespective of the size of the real property and added a $400 cost for a well to each building, even if the building did not have a separate well - The New Bruns­wick Court of Queen's Bench, Trial Divi­sion, held that the Board erred in using this blanket approach - The Assessment Act required that each property be assessed individually - See paragraphs 35 to 45.

Real Property Tax - Topic 3551

Valuation - Business property - Actual value - "Actual value" or "actual cash value" defined - [See both Real Property Tax - Topic 3503 ].

Real Property Tax - Topic 3702

Valuation - Business property - Replace­ment cost - Circumstances when replace­ment cost may be used - [See second Real Property Tax - Topic 3503 ].

Real Property Tax - Topic 7220

Assessment appeals - Practice - Judicial review - The New Brunswick Court of Queen's Bench, Trial Division, held that the appropriate standard of review to be applied to a decision of the Assessment and Planning Appeal Board was reason­ableness simpliciter - See paragraphs 20 to 22.

Cases Noticed:

Ryan v. Law Society of New Brunswick (2003), 302 N.R. 1 (S.C.C.), refd to. [para. 13].

Dr. Q., Re (2003), 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170 (S.C.C.), refd to. [para. 13].

Montreal v. Sun Life Assurance Co. of Canada, [1952] 2 D.L.R. 81 (P.C.), refd to. [para. 38].

CBR Cement Canada Ltd. v. Assessor of Area No. 01 - Colwood, [1998] B.C.T.C. Uned. E67 (S.C.), refd to. [para. 39].

Trans-Canada Pipe Lines Ltd. v. MacAulay (Township), [1962] O.J. No. 106 (H.C.J.), refd to. [para. 40].

Director of Assessment (N.B.) v. Rick's Flowers & Garden Ltd. et al., [1996] N.B.R.(2d) (Supp.) No. 12 (T.D.), refd to. [para. 41].

R. v. Assessors of the Town of Rothesay (1964), 46 D.L.R.(2d) 156 (N.B.C.A.), refd to. [para. 48].

Lord Advocate v. Earl of Home (1891), 28 Sc.L.R. 289, refd to. [para. 49].

The King v. Jones: Re Assessors of Carle­ton, [1950] S.C.R. 286; [1950] 2 D.L.R. 81, refd to. [para. 50].

Minister of Municipal Affairs (N.B.) v. Corbett (1968), 1 N.B.R.(2d) 82 (C.A.), refd to. [para. 66].

Joyce Avenue Apartments Ltd. v. New Brunswick (Director of Assessment), [1993] N.B.J. No. 68 (T.D.), refd to. [para. 73].

Lawson (Roy M.) Ltd. et al. v. Minister of Municipal Affairs (N.B.) (1982), 41 N.B.R.(2d) 608 (C.A.), refd to. [para. 74].

Counsel:

Jean Eugene Trahan, for the applicant;

Charles D. Whelly, Q.C., and Matthew M. Tweedie, for the respondents.

This appeal was heard on July 30 and September 29, 2003, by LaVigne, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Ed­mundston, who deliv­ered the following decision on November 4, 2003.