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2. Ross v. Assessor of Area #10

Citation: Ross v. Assessor of Area #10

Date: 20000107

2000 BCCA 5



Registry: Vancouver








Before: The Honourable Madam Justice Southin
The Honourable Mr. Justice Donald
The Honourable Madam Justice Saunders
Guy Holeksa

Counsel for the Appellant

Beverly Ross appearing on behalf of the Respondents
Place and Date of Hearing:

Vancouver, British Columbia

9 November 1999

Place and Date of Judgment:

Vancouver, British Columbia

7 January 2000

Written Reasons by:
The Honourable Madam Justice Saunders

Concurred in by:
The Honourable Madam Justice Southin
The Honourable Mr. Justice Donald

Reasons for Judgment of the Honourable Madam Justice Saunders:

[1] This appeal concerns a property assessment in which the only characteristic differentiating the subject property from nearby lands is the zoning.

[2] The property in question is owned by the respondents. It comprises three lots in the downtown core of New Westminster, British Columbia. The property is now being used below capacity, including by an autobody business. The lots are zoned C-4, which permits commercial or residential use, or a combination of the two, to a building density of 5.2 square feet for each square foot of land. It is not disputed that the highest and best use of the lots is holding for future development.

[3] Other nearby lots for which the highest and best use is also holding for future development are zoned RM-6. RM-6 zoning permits only residential use to a maximum density of 4.0 square feet for each square foot of land. At least one autobody shop, a competitor of the shop on the subject lands, has premises on land zoned RM-6.

[4] Since 1991 the Assessor has assessed land in the New Westminster downtown core zoned C-4 at a higher square foot value than land zoned RM-6. For the 1998 Assessment Roll the base value of C-4 land was $48 per square foot and of RM-6 land was $45 per square foot.

[5] The subject land was assessed at the C-4 base rate, $48 per square foot, for the 1998 Assessment Roll.

[6] The respondents appealed the assessment to the Assessment Appeal Board, as they had previous assessments. The main issue was the application of the principle of equity in taxation. The respondents contended that the only realistic use for both C-4 and RM-6 land in the downtown core, regardless of zoning, is new residential development, for which there is currently little or no demand. They said, therefore, that there is no justification at this time for a differential in assessments for otherwise similar properties.

[7] The Assessment Appeal Board concluded that the market would differentiate in value C-4 land from RM-6 land, and dismissed the appeal. In doing so, it stated:

The primary issue in this appeal is whether or not the properties have been equitably assessed. To address that issue, consideration must be given to the question of whether or not zoning is a proper characteristic to be considered in determining when properties are "similar" for the purposes of assessment and equity.


The Assessment Act and the common law require that properties be equitably assessed as against similar properties in the community. It is indeed the case, as the Appellant has argued, that if one property, though assessed at actual value, is shown to be inequitably assessed as against similar properties in the community, then equity must be achieved, either by a reduction in the assessment of the one, or by an increase to actual value in the assessed values of the others. But what is key is the determination of what properties are "similar", such that equity demands that they be assessed in a similar or consistent fashion.

The task of the Assessor is to assess properties at actual or market value. That value must be deduced from an analysis of the market as at valuation date. It is not something that can be definitively proved. It is an opinion. However, there will usually be some market evidence as to how the market responds to differences between properties. For example, it will usually be possible to determine whether or not the market pays a premium for, say, lake front property as opposed to land locked property, or for a corner lot as against an in-line lot. If the market pays a premium for the lake front lot, or the corner lot, then it can be said that those properties are not absolutely similar, and on that basis it would be proper to assign a different assessed value to properties in the lake front group or corner lot group, than to those in the land locked or in-line group. Similarity is not an absolute. There is a continuum of similarity ranging from perfect similarity (as in, for example, condominiums in a development) to virtually zero similarity. In the case of perfect similarity, equity requires that properties in that group bear the same assessed value. However, as we move along the continuum and begin to see differences between properties, (like, for example, if one of the condominiums was otherwise identical, but was the penthouse) then, since the difference is one to which the market would respond, equity would permit, indeed require, that the assessed value for the penthouse be higher than for the others.

Thus, "similar", as used in the equity edict, is a term of appraisal art. It can be defined as 'having characteristics or factors to which the market tends to respond in a similar fashion'.


As is clearly demonstrated by [the] appraisal, zoning is a characteristic to which, all other things being equal, the market will react; by application of a discount for the land in the RM-6 pockets, or alternatively, a premium for the lands zoned C-4.

[8] The respondents then brought a Stated Case. The chambers judge answered yes to the following two questions:

3. Did the Board err in law by misapplying the law requiring similar properties in the same geographic area to be assessed in a manner ensuring equitable taxation?

5. Did the Board err in law by acting upon a misconception of the law and a view of the facts which could not reasonably be entertained?


[9] In reaching his conclusion that the respondents should succeed, the chambers judge said at paras. 21 - 26:

Hood J. in Ross and Grubb v. Assessor of Area #10 (June 14, 1991) No. 98-10-00001 (A.A.B.) concluded the Board did not err in using zoning as a major factor in assessing the same C-4 lots as are at issue here.

That is quite a different conclusion, as is implied in his reasons at p. 1865, than saying zoning is enough on its own as has been done here. Future development or events may provide other assessment factors. At present there are none known to the court.

The City must be left free to zone as it considers to be in the best interests of the community and so the developmental consequences of zoning can properly - but not always - rightly influence assessment decision but it was neither consistent nor fair that there be a differential between the two zones. The evidence did not show prospects for development encouraged by RM-6 zoning within a reasonable temporal horizon.

Assessment may vary from tax period to tax period. Indeed, the evidence showed the two zones bore the same assessment rate for five years, 1986 to 1991. Circumstances alter cases.

The evidence showed the entire area - C-4 and RM-6 - to be of the same species at the time of assessment other than that it encompassed the two zones, C-4 and RM-6.

The sole reason for the higher assessment of C-4 property, all else being equal (of the same species), is summed up in the Board's finding: "As for equity, (the assessor) throughout her tenure in the Burnaby/New Westminster office, the market has indicated a value spread between properties in the downtown core zoned C-4 and those zoned RM-6. The market based spread for the 1998 tax year was $3.00." (That tenure commenced in 1992, prior to which there had been no value spread).

[10] It is from this decision on the Stated Case that the Assessor appeals. The Assessor contends that the chambers judge erred:

a) holding that similar properties that have different zoning which leads to different market values must be assessed at the same value; and

b) overturning the Board decision when it was not unreasonable and was based on ample evidence.

[11] The respondents' position may be distilled to two arguments. The first is that the current market for land in this area does not differentiate in value based on the zoning. Secondly, they argue that zoning is not a characteristic of land and does not set value, it merely designates how land may be used. For these reasons the respondents say that the Assessment Appeal Board was wrong, and the chambers judge was correct.

[12] The chambers judge answered affirmatively to two questions: had the Board misapplied the law requiring similar properties to be assessed to ensure equitable taxation, and did the Board act upon a misconception of the law and a view of the facts that could not be reasonably entertained.

[13] Both the Board and the chambers judge correctly stated the broad principle of law relied upon by the respondents, the principle of equity in taxation. Fairness between taxpayers requires similar properties to be assessed equitably. These principles were confirmed by this Court in Vancouver Assessor, Area 9 v. Bramalea Ltd. (1990), 52 B.C.L.R. (2d) 218 (C.A.) and Vancouver Assessor, Area 9 v. Lount (1995), 10 B.C.L.R. (3d) 92 (C.A.).

[14] The issue in this case is the application of that principle to these facts. Can zoning alone create a dissimilarity between properties which should be reflected in their assessments? If so, was it reasonable on the evidence for the Board to conclude there was such a dissimilarity in this case?

[15] Similarity is a spectrum, aptly described by the Assessment Appeal Board in the passages above. Points of similarity and dissimilarity will lead to different value responses from the market. The market value will reflect potential uses of the property, and in this zoning may be a factor. While zoning in itself does not determine the highest and best use of land, it is a factor which the Board may properly consider. While zoning sometimes may overstate the practical uses of the property, or may limit the use of the property (subject to any application to rezone, the risks of which will be reflected in the market price), it may be a factor which influences the market value of the land, and hence its actual value. Zoning, thus, may be a basis on which to assess otherwise similar parcels differently, subject to evidence that this point of dissimilarity is reflected in the market value.

[16] The Board found that lands zoned C-4 and RM-6 in the downtown core of New Westminster have different market value and, based upon this difference, found that the differently zoned properties have different actual values.

[17] In his reasons the chambers judge said:

The evidence [before the Assessment Appeal Board] did not show prospects for development encouraged by RM-6 zoning within a reasonable temporal horizon.


The evidence showed the entire area - C-4 and RM-6 - to be of the same species at the time of assessment other than that it encompassed the two zones, C-4 and RM-6.

With respect, these statements overlook the evidence that was before the Board that from 1992 to the date of assessment, C-4 and RM-6 property had a different market value. The Board's decision on this point was not made in an evidentiary vacuum and was one which the evidence could reasonably support. A court is not permitted to interfere in findings of fact reasonably made on the evidence before the Board.

[18] I conclude that the Board did not misapply the law concerning equitability of treatment as between different taxpayers, or misconceive the law. Nor was its decision unreasonable based upon the evidence before it. In my view, the chambers judge erred in his answer to questions 3 and 5 of the Stated Case.

[19] I would allow the appeal.


"The Honourable Madam Justice Saunders"

I AGREE: "The Honourable Madam Justice Southin"

I AGREE: "The Honourable Mr. Justice Donald"

Michael C. Lount

Michael C. Lount, B.A. Sc., AACI, is president of M.C. Lount & Associates Ltd., a leading expert in the field of property tax assessments. Mr. Lount is a 30-year member of the Appraisal Institute of Canada and holds their senior AACI designation. He also holds a Bachelor of Applied Science degree in Civil Engineering from the University of British Columbia. He can be reached at 604-727-7902 or contact us here

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