Edmonton East (Capilano): Standard Of Review Heads South

The Supreme Court of Canada released its administrative law decision in Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47 ("Edmonton East") in late 2016.1 The decision was one of our Top Ten Appeals of 2016. It marked a significant shift in how courts determine the standard of review for questions of law on judicial review. The result is that it will be more difficult for individuals and companies to challenge the acts and decisions of government actors, even if the government actors have stepped outside of their legislated authority.

Background

Edmonton East involved a shopping mall in Edmonton whose property value was assessed as $31 million for municipal taxation purposes. The company that owned the mall disputed the assessment by filing a complaint with Edmonton's Assessment Review Board (the "Board"). The company argued that the true value of the mall was $22 million, which would result in a much lower municipal tax burden. But then before the Board, the City of Edmonton claimed that it had actually made an error, and the true value of the mall was $45 million.

Following a hearing, the Board increased the assessed value to $41 million. The company applied for judicial review and the Alberta Court of Queen's Bench made an order setting aside the Board's decision. The Court of Appeal affirmed this order.

The key issue before the courts was whether the Board had the jurisdiction to increase the assessed value given that the company had filed a complaint seeking to decrease the assessed value.

The relevant statutory scheme can be summarized as follows:

The Municipal Government Act ("MGA") only permits an "assessed person" or "taxpayer" to contest a municipal property assessment before an assessment review board.2 The review board may decide to "change" or not to "change" the assessment.3 The board has a duty to not alter an assessment that is fair and equitable.4 The review board only has jurisdiction to hear complaints about any matter shown on an assessment notice,5 and can only hear matters in support of an issue on the complaint form.6 An assessed person has the right to request information from the municipality, and the review board cannot consider information that was requested by, but not provided to, the assessed person.7 The assessed person must provide evidence 42 days before the hearing date; the municipality must provide such disclosure 14 days before the hearing date; and the assessed person must provide the rebuttal evidence 7 days before the hearing date.8 Crucially, the MGA at the time included a statutory right of appeal to the Court of Queen's Bench, with leave, on a "question of law or jurisdiction".9 More generally, assessment review boards are established by the various municipalities in Alberta, meaning that each board is unique and that different boards can apply the MGA differently throughout the province.10 This statutory scheme was the subject of much debate between the Supreme Court majority and dissent, and was key to the Court of Appeal's application of a correctness standard of review.

Alberta Court of Appeal

The Alberta Court of Appeal applied a correctness standard of review and upheld the lower court's order overturning the Board's decision. Justice Slatter for a unanimous Court of Appeal wrote a cri de coeur focusing on the values underlying judicial review.11 The Court of Appeal noted that "standard of review" is not a value unto itself but rather exists to maintain the integrity of our governance system, illustrated by the need to defer to administrative tribunals.12 A key value, and the "polar star" of the analysis, is to consider what the legislature intended.13 Where the legislature provides a statutory right of appeal from a tribunal to a court (as the MGA did here), the reviewing court becomes "internal" to the system of administrative justice, rather than the reviewing court being "external" to the administrative system.14 The Court of Appeal further stated that the Dunsmuir factors should not be applied as a "mechanical and formalistic test".15 Even where the nature of the question at issue leads to a presumption of deference, the presumption can be rebutted depending on the circumstances of the case.16 Applied to the facts at bar, the Court of Appeal considered the Board's expertise on the particular subject-matter relative to the expertise of the reviewing court.17 This factor militated in favour of correctness, since the Board does not have expertise regarding statutory interpretation, whereas the superior courts do. The Court of Appeal applied a correctness standard of review and upheld the lower court's order setting aside the Board's decision.

Supreme Court of Canada

The Supreme Court divided sharply in a 5-4 split, with the majority applying a reasonableness standard and overturning the Court of Appeal, and the dissent holding that correctness applied.

The Supreme Court Majority

The Supreme Court majority created a formal rule to determine standard of review for questions of law, applied a reasonableness standard to the Board's decision, and overturned the lower courts to affirm the Board's decision.

Justice Karakatsanis writing for the majority began her analysis by suggesting that the day "may be approaching" when it is possible to write an administrative law judgment "without a lengthy discussion of the standard of review."18 She then twisted years of...