Executive Summary: Key Legal and Evidentiary Issues

• Dispute over the fairness and accuracy of a 2024 municipal assessment valuing an auto dealership property at $22,308,900, using a cost approach for improvements and sales comparison for land.
• Challenge to the Central Alberta Regional Assessment Review Board’s exclusion of a KIA dealership sales brochure and Altus’s income-approach analysis as procedurally unfair.
• Interpretation of the City’s reference to the income approach in its disclosure and whether it opened the door for Altus to advance a full income-based valuation in rebuttal.
• Debate over the admissibility and weight of land sales outside the traditional three-year window, and whether using a five-year window for limited sales was reasonable.
• Critique of Altus’s dollar-per-square-foot methodology for dealership comparables, including its failure to account for differing land and improvement characteristics.
• Application of the Vavilov reasonableness framework to determine whether the CARB’s reasons and outcome met the standards of justification, transparency, and intelligibility.

Factual background

The case concerns the 2024 property tax assessment of a commercial property in Red Deer, Alberta, housing an MGM Ford dealership (the Property). The City of Red Deer issued a 2024 notice of assessment valuing the Property at $22,308,900. The City arrived at this figure by using the Marshall & Swift cost approach for the building improvements, resulting in an improvement value of $8,232,036, and a sales comparison approach for the land, yielding a land value of $14,076,900. Altus Group Limited, acting as agent for the registered owner, filed a complaint with the Central Alberta Regional Assessment Review Board (CARB), challenging the City’s assessed value. In its complaint, Altus initially identified a requested assessment of $19,950,000 and alleged multiple flaws in the City’s valuation. In its formal Complainant Disclosure (Altus Initial Submission), Altus reduced its requested assessment to $11,037,500. To support this significantly lower value, Altus relied on four dealership comparables and advanced a valuation methodology focused on a dollar-per-square-foot ratio across the comparable dealership properties.

Proceedings before the CARB

The City responded with its City Disclosure (City Response Submission), arguing that the assessment of $22,308,900 was fair and equitable. It contended that the dealership comparables used by Altus were in less desirable locations and that Altus’s dollar-per-square-foot analysis failed to consider key cost components and differences in the improvements. The City provided land sales data from 2020 to 2023 to support its position on land value, and argued that the simple per-square-foot approach advanced by Altus masked important differences in land size, location, and improvement characteristics between properties. Altus then filed a Rebuttal Submission (Altus Rebuttal Submission). In rebuttal, Altus argued that the City’s land sales should not be considered because they were “pre-facto,” i.e., outside the traditional three-year valuation window. Altus also added a sales brochure for a KIA dealership to bolster its dollar-per-square-foot argument and, for the first time, presented an income approach valuation supporting an alternative requested value of $13,214,780.

Hearing and evidentiary rulings

The CARB hearing proceeded on July 22, 2024. As a preliminary matter, the City challenged parts of the Altus Rebuttal Submission. The City asked the CARB to exclude the KIA dealership sales brochure, on the basis that it had not been part of any party’s initial disclosure, and to exclude Altus’s income approach analysis, which had likewise not been advanced in Altus’s initial submission. The CARB agreed. It ruled that the KIA brochure and the pages containing the income-approach argument were new information improperly introduced at the rebuttal stage, and therefore should be excluded from the evidence. On the substantive merits, the CARB confirmed the City’s assessment. It rejected Altus’s dollar-per-square-foot methodology, found that the City’s use of land sales data extending beyond the usual three-year window was permissible given limited sales, and concluded that relying on a five-year window was acceptable in the circumstances. The CARB ultimately held that the assessment of $22,308,900 represented a reasonable estimate of the market value for the Property and declined to alter it.

Judicial review application and issues

Altus sought judicial review in the Court of King’s Bench of Alberta, naming the CARB and the City of Red Deer as respondents. Altus advanced two broad grounds. First, it alleged procedural unfairness in the CARB’s exclusion of (a) the KIA sales brochure and (b) Altus’s income-approach material in rebuttal. Second, it argued the CARB’s decision on the merits was unreasonable, contending that the Board had either misapplied the governing assessment law or failed to engage adequately with the grounds and evidence identified in Altus’s complaint. The parties agreed that the standard of review on the merits of the CARB’s decision was reasonableness. Both relied on established assessment jurisprudence, including Mountain View (County) v Alberta (Municipal Government Board), 2000 ABQB 594, and Bramalea Ltd. v British Columbia (Assessor of Area #09–Vancouver), as the governing framework for fair and equitable assessments and the treatment of comparables in property taxation disputes.

Court’s analysis on procedural fairness

On judicial review, the Court first addressed the procedural fairness challenge. Regarding the income approach, Altus relied on a passage in the City Response Submission that referenced income-approach methodology and stated that the assessment of the subject property was estimated by way of the income approach. The Court acknowledged that, on its face, this language could be confusing. However, when the record was reviewed as a whole, the Court accepted the City’s position that the income approach had not actually been used in preparing the assessment and was not being advanced as a substantive valuation method by the City before the CARB. The City’s reference was characterized as a stray or erroneous statement, likely the product of boilerplate or precedent language not carefully tailored to the file. In that context, it was open to the CARB to treat Altus’s full income-approach analysis in rebuttal as improper new evidence and exclude it. The Court held that this exclusion was fair and correct and emphasized the need for care when reusing precedent forms or templates in tribunal practice. With respect to the KIA dealership sales brochure, Altus argued that it should have been admissible because the City had introduced land sales documentation in its Response Submission, which Altus saw as sales-comparison evidence. The City maintained that these land sales were offered not as full-blown sales-comparison evidence, but to challenge Altus’s dollar-per-square-foot analysis and to illustrate differences in the market value of unimproved land by location. While the Court again recognized the face of the City’s materials could be read differently, it was satisfied, looking at the whole record, that both the parties and the CARB understood the land-sales references in that limited way. Accordingly, the CARB’s decision to exclude the KIA brochure as new evidence at rebuttal was also found to be procedurally fair.

Reasonableness review of the CARB decision

Turning to the substantive review, the Court applied the modern reasonableness standard articulated in Canada (Minister of Citizenship and Immigration) v Vavilov. Under this framework, tribunal decisions are reviewed for justification, transparency, and intelligibility, with the reviewing court intervening only where serious shortcomings in rationale or outcome make the decision untenable in light of the legal and factual constraints. The burden rested on Altus, as the party attacking the decision, to show that the CARB’s reasoning or result failed to meet this standard. The Court concluded that the CARB’s decision was reasonable. It was clear that the CARB understood Altus’s central argument—namely, that the assessment was not fair or equitable when measured against other dealership properties on a dollar-per-square-foot basis—and explicitly rejected that approach. The CARB found that Altus’s square-foot calculations were overly simplistic and failed to consider differing characteristics of both the land (including location and size) and the improvements (such as building specifications and cost components) across the comparables. At the judicial review stage, Altus complained that the CARB had not expressly addressed every ground listed in the original Complaint Form. The Court rejected the idea that this omission, by itself, rendered the decision unreasonable. It underscored that reasonableness review is not a “treasure hunt for error” and that courts should not parse tribunal reasons in search of minor missteps or omissions. What mattered was that the CARB had grappled with and decided the core issue—the validity of Altus’s dollar-per-square-foot method and the fairness of the resulting assessment—and provided reasons sufficient to explain why it confirmed the City’s valuation. On that basis, the Court found that the CARB’s reasons met the Vavilov standard of justification, intelligibility, and transparency.

Observations about tribunal practice and record-keeping

In its concluding remarks, the Court commented on the CARB’s practice of “carrying over” evidence from one hearing to another. The certified record included a transcript that bundled three different matters together, reflecting the CARB’s practice of allowing evidence in one file to apply in subsequent hearings. Counsel confirmed that this was indeed the Board’s practice. While noting that this practice did not result in any actual prejudice in this particular case and therefore did not form a ground of judicial review, the Court observed that it was not best practice. The Court suggested that each hearing should be self-contained, with any relevant evidence from another matter formally introduced into the record of the specific case, both to ensure clarity about what evidence is properly before the Board and to facilitate efficient judicial review by having a discrete transcript for each matter.

Outcome and implications

The Court of King’s Bench ultimately dismissed Altus Group Limited’s application for judicial review. The CARB’s evidentiary exclusions were upheld as procedurally fair, and the Board’s decision confirming the City of Red Deer’s assessment of $22,308,900 was found to be reasonable in light of the record and applicable legal principles. As a result, the City of Red Deer and the Central Alberta Regional Assessment Review Board, as respondents, emerged as the successful parties. The judgment does not specify any quantified amount of costs, damages, or other monetary award ordered in their favour; beyond the confirmation of the municipal assessment figure itself, no total dollar amount for court-ordered costs or monetary relief can be determined from the decision.