The following version is for informational purposes only, for the official version
see: http://www.courts.gov.bc.ca/ for Stated Cases
see also: http://www.assessmentappeal.bc.ca/ for Property Assessment Appeal Board Decisions
SC 501 AA01 v. Bodine, Ralph E. & Linda S.
Link to Property Assessment Appeal Board Decision – Dated November 14, 2006
Link to Property Assessment Appeal Board Decision – Dated November 25, 2005
Link to Property Assessment Appeal Board Decision – Dated August 4, 2005
Quick Link to Stated Case #501-A (Costs)
ASSESSOR OF AREA 01 – CAPITAL
v.
RALPH E. BODINE
LINDA S. BODINE
SUPREME COURT OF BRITISH COLUMBIA (06 0045) Victoria Registry
Before the HONOURABLE MADAM JUSTICE DORGAN (in chambers)
Date and Place of Hearing: May 16, 2006, Victoria, BC
G. McDannold for the Appellant
D.L. Armstrong for the Respondents
Custom Built House – "Over-Built" – Unique Property
The property at issue comprises four legal lots in North Saanich, currently being used by the
Respondents as a single estate property. On appeal to the Property Assessment Appeal Board ("the
Board") the Assessor sought to have the assessments increased while the owners sought to have them
reduced. The Board ordered the Assessor to amend the 2005 assessments for the lots, which resulted in
a decrease in the overall assessment from $12,176,700 to $10,579,100. The Assessor appealed the
Board's decision to this Court asking 4 questions:
1. Did the Board err in law when it arbitrarily and without evidence factored in an unknown and
unquantified negative adjustment for the value of the subject property as being "overbuilt"?
2. Did the Board err in law and act on a view of the facts which could not reasonably be entertained
when it factored in a negative adjustment to compensate for the market view of the subject property
as being overbuilt?
3. Did the Board err in law and act contrary to the evidence when it found the Assessor did not inspect
the interior of the guest-house on the subject property and accordingly had insufficient evidence to
value the guest-house at $450.00 per square foot?
4. Did the Board err in law and act on a view of the facts which could not reasonably be entertained
when it found the Assessor did not inspect the interior of the guest-house on the subject property and
accordingly had insufficient evidence to value the guest-house at $450.00 per square foot?
HELD: Appeal Allowed.
This Court considered questions 1 and 2 as one question and found that there was no evidence from
which the Board could conclude the subject property was overbuilt. Further, there was no evidence from
which the Board could reasonably conclude that a negative adjustment of unknown origin or quantity had
to be applied as a consequence. In this regard the Court was satisfied the Board acted without evidence
page 1
and on a view of the facts which could not reasonably be entertained, thereby falling into error.
Accordingly, the Court answered each of Questions 1 and 2 "yes".
This Court also considered questions 3 and 4 as one question and found that the Board's rejection of
the opinion of the Appraiser from BC Assessment was based on an erroneous view of the underpinnings
of her opinion. A conclusion based on an erroneous view of the evidence leading to an erroneous finding
of fact is one that cannot be reasonably entertained. In conclusion this Court found that the answer to
each of Questions 3 and 4 was "yes".
Reasons for Judgment
June 28, 2006
[1] This is a Stated Case filed by the Property Assessment Appeal Board pursuant to s. 65 of the
Assessment Act, R.S.B.C. 1996, c. 20, at the request of the Assessor of Area #01 - Capital. It concerns
the November 25, 2005 decision of the Board which was an appeal from the decision of the 2005
Property Assessment Review Panel.
[2] The property at issue comprises four legal lots in North Saanich, currently being used by the
Respondent property owners as a single estate property. On the appeal to the Board, the Assessor
sought to have the assessments increased while the property owners sought to have them reduced. In
the result, the Board ordered the Assessor to amend the 2005 assessment rolls, on each of the lots,
which resulted in a decrease in the assessment from $12,176,700 to $10,579,100.
[3] The court is bound by the facts as stated. Those relevant to this case are as follows:
3. The lots are each regular shaped rectangular lots with north facing water frontage on Lands End
Road. They are adjacent to one another and described as Lot A, Lot B, and the easterly and
westerly halves of Lot 22.
4. Lot A has approximately 92 feet of water frontage. It is improved with a greenhouse, wood shop,
gazebo, landscaping, and rock walls.
5. Lot B has approximately 115 feet of water frontage. It is improved with a residential dwelling,
garage, rock walls, fountains and extensive landscaping. The residence is known as the "guest
house" and consists of approximately 1,632 square feet plus a finished 1,300 square foot
basement suite, which is partially above grade. The guest house has been renovated to a high
standard of finish.
6. Lot 22 has approximately 180 feet of water frontage. It is improved with the main residential
dwelling of the estate, detached multiple garages, greenhouses, formal gardens, rock walls,
fountains, and extensive landscaping. The main residence consists of approximately 10,700 square
feet. ... The level of finish of the main residence and improvements is extraordinary.
7. The estate is currently listed for sale and is one of the more expensive listings in British Columbia.
[I was advised during submissions that the property had been listed for $18,500,000 without an
offer.]
...
9. The Board found, with respect to the cost approach, that Marshall and Swift is not a suitable
reference for a custom build that has been described as "unparalleled" and "exquisite". Mr. Baker
did not seek the owner's records relating to actual construction costs, or consult with high end
contractors as part of his investigation. The Board found that in the case of clearly unique
construction methodology and quality, these would have been valuable resources. The Board
found the Marshal [sic] and Swift's $450 per square foot value for construction was not appropriate.
The Board found the best evidence of cost per square foot for the main residence was provided by
the Appellant's insurance policy.
page 2
10. The Board found the residence is overbuilt by contemporary residential standards. ... The Board
found that the only adequate methodology was to look at the comparables available, refer to a
reasonably assembled depreciated cost calculation, and factor in a negative adjustment to
compensate for the market view of this property as being overbuilt. The Board found that following
this principle produced a range of value between $6.25 million and $6.5 million, or approximately
$6.375 million for the main residence.
...
12. The Board found the Assessor's appraisal also utilized Marshall and Swift's highest category of
$450.00 per square foot for the cost approach for the guesthouse. The Board found the Appraiser
did not inspect the interior of the building nor have photographs or additional evidence on which to
rely. The Board found that Ms. McWilliams had insufficient evidence on which to so conclude.
...
[4] On this Stated Case, the following questions are asked:
1. Did the Property Assessment Appeal Board err in law when it arbitrarily and without evidence
factored in an unknown and unquantified negative adjustment for the value of the subject property
as being "overbuilt"?
2. Did the Property Assessment Appeal Board err in law and act on a view of the facts which could
not reasonably be entertained when it factored in a negative adjustment to compensate for the
market view of the subject property as being overbuilt?
3. Did the Property Assessment Appeal Board err in law and act contrary to the evidence when it
found the Assessor did not inspect the interior of the guest-house on the subject property and
accordingly had insufficient evidence to value the guesthouse at $450.00 per square foot?
4. Did the Property Assessment Appeal Board err in law and act on a view of the facts which could
not reasonably be entertained when it found the Assessor did not inspect the interior of the guesthouse on the subject property and accordingly had insufficient evidence to value the guest-house
at $450.00 per square foot?
[5] A Stated Case is, by statute, strictly limited to questions of law. Further, this court is prohibited from
substituting its own view of the evidence.
[6] Section 65 of the Assessment Act reads in part:
65. (1) ... a person affected by a decision of the board on appeal, including a local government, the
government, the commissioner or an assessor acting with the consent of the commissioner, may
require the board to refer the decision to the Supreme Court for appeal on a question of law alone in
the form of a stated case.
[7] Such a question of law, in the context of a Stated Case, in respect of a property assessment, has been
defined in Gemex Developments Corp. v. Assessor of Area 12 – Coquitlam, (1998) Stated Case 386
(B.C.C.A.), [1998] B.C.J. No. 2275, as follows:
1. A misinterpretation or misapplication by the Board of a section of the Act.
2. A misapplication by the Board of an applicable principle of general law.
3. Where the Board acts without any evidence.
4. Where the Board acts on a view of the facts which could not reasonably be entertained. ...
page 3
5. Where the method of assessment adopted by the Board is wrong in principle. [at 1969-70]
[8] From the Gemex case, numbers 3 and 4 apply to the Stated Case at bar, while numbers 1, 2 and 5 do
not.
[9] As to the questions in the Stated Case, it is convenient to deal with Questions 1 and 2 together and
Questions 3 and 4 together.
[10] Question 1:
Did the Property Assessment Appeal Board err in law when it arbitrarily and without evidence factored
in an unknown and unquantified negative adjustment for the value of the subject property as being
"overbuilt"?
[11] Question 2:
Did the Property Assessment Appeal Board err in law and act on a view of the facts which could not
reasonably be entertained when it factored in a negative adjustment to compensate for the market
view of the subject property as being overbuilt?
[12] The authorities are clear; an arbitrary decision of the Board amounts to an error in law. Arbitrary in
this context was discussed in Pacific Logging Company Ltd. v. British Columbia (Assessor) (1974) Stated
Case 99 (B.C.S.C), (1974), 16 N.R. 525, reversed on appeal [1976] B.C.J. No. 873; reversed on appeal
[1977] 2 S.C.R. 623. The Supreme Court of Canada agreed with the dissenting judgment of Mclntyre J.A.
from the British Columbia Court of Appeal who stated in part:
When I use the word "arbitrary" I mean - and from the context in which the word is used in the
case I conclude the Assessor meant - a decision made at discretion in the absence of specific
evidence and based upon opinion or preference (see Shorter Oxford English Dictionary). The resulting
assessment is then made without regard for the statutory provisions and uncontrolled by them.
...
... an assessment made in a manner not justified in law cannot stand. ...
[13] The Board's decision as it relates to the property being "overbuilt" and applying a negative
adjustment factor to compensate for that fact is found at paragraph 35 which reads in part:
[35] I agree with the Appellants, that the property is overbuilt by contemporary residential standards.
While the market allows for a degree of uniqueness in extraordinary properties, the greater the degree
of uniqueness, the smaller the market segment to which the property will appeal. I find that to apply a
cost approach without adjustment to a residential property due to the difficulty in finding comparables
is inadequate for a proper valuation. I also find that to select a figure from among a list of ineffectual
comparables without reference to a depreciated cost approach is somewhat arbitrary. I am left with the
conclusion that the only adequate methodology is to look at the comparables available, refer to a
reasonably assembled depreciated cost calculation, and factor in a negative adjustment to
compensate for the market view of this property as being overbuilt. ...
[14] Opinion evidence was placed before the Board, namely that of R. J. Baker, a witness for the property
owners, and D. McWilliams, a witness for the Assessor, who are both accredited appraisers whose
qualifications are not in issue. Neither of the experts proffered the opinion that the subject property was
overbuilt. It follows that neither of the experts proffered an opinion as to how such a conclusion should be
dealt with; for example, whether to apply a negative adjustment, and if so, how to quantify that
adjustment. As I understand the record of proceedings before the Board, the suggestion that the property
page 4
was overbuilt, and consequently its value adversely affected, was advanced, apparently persuasively, by
Mr. Armstrong in his submissions.
[15] The Board's conclusion that the property was overbuilt and its application of a compensatory
negative adjustment and the quantification of that adjustment appear to be findings made in the absence
of evidence.
[16] I find there was no evidence from which the Board could conclude the subject property was overbuilt.
Further, there is no evidence from which the Board could reasonably conclude that a negative adjustment
of unknown origin or quantity had to be applied as a consequence. In this regard I am satisfied the Board
acted without evidence and on a view of the facts which could not reasonably be entertained, thereby
falling into error. Accordingly, the answer to each of Questions 1 and 2 is "Yes".
[17] Question 3:
Did the Property Assessment Appeal Board err in law and act contrary to the evidence when it found
the Assessor did not inspect the interior of the guest-house on the subject property and accordingly
had insufficient evidence to value the guest-house at $450.00 per square foot?
[18] Question 4:
Did the Property Assessment Appeal Board err in law and act on a view of the facts which could not
reasonably be entertained when it found the Assessor did not inspect the interior of the guest-house
on the subject property and accordingly had insufficient evidence to value the guest-house at $450.00
per square foot?
[19] The portion of the Board's decision dealing with these questions reads:
[40] The Assessor's appraisal also utilized Marshall and Swift's highest category of $450 per square
foot for the cost approach for the guest-house. The Appraiser did not inspect the interior of the
building, nor have photographs or additional evidence on which to rely. I find that Ms. McWilliams had
insufficient evidence on which to so conclude.
[41] ... I find a reasonable cost per square foot for the guest-house to be something more than half of
the figure presented by Ms. McWilliams. ...
[20] In rejecting the Assessor's appraisal of the guest house based on $450 per square foot, using the
cost approach, the Board clearly relied on its finding that Ms. McWilliams did not inspect the interior of the
building and its finding that she utilized the Marshall and Swift Manual in coming to her opinion.
[21] The record shows that Ms. McWilliams did inspect the interior of the building, a fact conceded by
counsel in the Stated Case. Further, the record shows that she relied on the B.C. Assessment Authority
Green Manual, not the Marshall and Swift Manual, in coming to her opinion on the cost per square foot.
[22] Mr. Armstrong, on behalf of the property owners, argues that these errors are not errors of law but
errors of fact, from which there is no appeal.
[23] In considering the record as a whole, the Board's rejection of the McWilliams' opinion was based on
an erroneous view of the underpinnings of her opinion. A conclusion based on an erroneous view of the
evidence leading to an erroneous finding of fact is one that cannot be reasonably entertained.
[24] In Gemex the court held that it is a question of law "[w]here the Board acts on a view of the facts
which could not reasonably be entertained ..." Here, and in respect of Questions 3 and 4 of the Stated
Case, the facts relied on by the Board in coming to its decision are inconsistent with the evidence that
was before it; clearly a question of law.
page 5
[25] In conclusion, the answer to each of Questions 3 and 4 is "Yes".
[26] The parties are at liberty to speak to the matter of costs if they cannot agree.
The Honourable Madam Justice Dorgan
SC 501-A AA01 v. Bodine, Ralph E. & Linda S. (Costs)
ASSESSOR OF AREA 01 – CAPITAL
v.
RALPH E. BODINE
LINDA S. BODINE
SUPREME COURT OF BRITISH COLUMBIA (06-0045) Victoria Registry
Before the HONOURABLE MADAM JUSTICE DORGAN (in chambers)
Date and Place of Hearing: September 6, 2006, Victoria, BC
G. McDannold for the Appellant
L. Armstrong for the Respondents
Costs
The Assessor argued that he was entitled to costs following his success before the BC Supreme
Court on the Stated Case, based on the principles set out in Haggerty v. AA01, Stated Case #396. The
Respondents argued that Haggerty did not apply since that case was an appeal involving an industrial
property and that costs should not be awarded against property owners on residential Stated Case
appeals.
HELD:
This Court found that there is nothing to take this case out of the ordinary application of the court's
discretion on the question of costs. Costs follow the event.
Reasons for Judgment (Oral)
September 6, 2006
[1] THE COURT: This is the Assessor's appeal by way of Stated Case of the Property Assessment
Appeal Board's decision in respect of property owned by the Bodines. In the result, the appeal was
allowed. This court found that the Property Assessment Appeal Board had erred.
[2] The matter of costs is now before this court. While I agree that property owners ought not to be
discouraged from using the process in respect of their assessments, I do not accede to the argument that
an order for costs in a Stated Case such as it is here, a successful appeal, would discourage owners from
participating in the process.
[3] In my view, there is nothing to take this case out of the ordinary application of the court's discretion on
the question of costs. The appeal was successful. Costs follow the event.
[4] MR. McDANNOLD: Thank you.
[5] MR. ARMSTRONG: Thank you, My Lady.
[6] THE COURT: Thank you for your submissions. On the basis of Mr. Armstrong's lack of instructions as
to the amount, I decline to quantify the costs.
page 6
[7] MR. McDANNOLD: Yes. Thank you, My Lady.
page 7