Executive Summary: Key Legal and Evidentiary Issues

• The dispute centered on the 2017 property tax assessments of ten limited service hotels in Saskatchewan and whether SAMA properly applied the Assessment Appeals Committee’s directions for reassessment.

• Hotel owners argued SAMA should have used a revised room expense ratio only for recalculating net operating income, not throughout the entire assessment model.

• The reviewing judge applied the reasonableness standard to SAMA’s interpretation of the Committee’s order, which was not contested by the owners.

• The court examined whether SAMA’s application of the revised room expense ratio to all relevant parts of the assessment model was consistent with the Committee’s decision.

• The court found SAMA’s interpretation and actions aligned with the Committee’s explicit instructions to recalculate both net operating income and the capitalization rate using the revised ratio.

• The appeal was dismissed and SAMA was awarded one set of costs against the owners; no damages were awarded.

Facts and outcome of the case

Background and factual context

This case involved an appeal concerning the 2017 property tax assessments of ten limited service hotels located in the cities of Melfort, Yorkton, Estevan, Weyburn, and the town of Kindersley. The Saskatchewan Assessment Management Agency (SAMA) provided property tax valuation services to these municipalities and used the income approach for mass appraisal, specifically applying a room expense ratio of 3.89% of effective gross income in its assessment model. The hotel owners challenged this ratio, arguing it was too low, and appealed to the board of revision, which agreed with the owners and directed reassessment using a room expense ratio of 38.51%.

SAMA appealed the board’s decision to the Assessment Appeals Committee of the Saskatchewan Municipal Board. The Committee directed SAMA to recalculate the net operating income for the properties using the 38.51% room expense ratio and to recalculate the capitalization rate based on the original sales array, using the recalculated net operating income. SAMA then issued revised assessments in accordance with its understanding of these directions.

Judicial review and appellate proceedings

The hotel owners were dissatisfied with SAMA’s reassessment and applied for judicial review, arguing that SAMA misinterpreted the Committee’s decision by applying the revised room expense ratio throughout the entire assessment model, rather than limiting it to the net operating income for the subject properties. The reviewing judge rejected this argument, finding that SAMA’s interpretation was reasonable and consistent with the Committee’s directions. The judge also found no breach of procedural fairness.

The owners appealed to the Court of Appeal for Saskatchewan. The appeal was heard on September 4, 2025, and the decision was released on September 17, 2025. The only issue on appeal was whether the reviewing judge erred in holding that SAMA’s interpretation of the Committee’s decision was reasonable.

Court’s analysis and decision

The court examined the Committee’s decision and the context of the proceedings. It found that the Committee had explicitly directed SAMA to recalculate both the net operating income and the capitalization rate using the revised room expense ratio of 38.51% of effective gross income. The court determined that SAMA’s interpretation was reasonable and that the Committee’s directions required the revised ratio to be applied throughout the entire assessment model. The court also noted that the judicial review was properly focused on SAMA’s reassessment decision, which was constrained by the Committee’s order.

Outcome

The court dismissed the owners’ appeal, upholding the reviewing judge’s decision and SAMA’s reassessment. One set of costs was awarded to SAMA against the owners. No damages were awarded.