B.C. homeowner's court challenge threatens to open 'floodgates' to assessment appeals

A B.C. Supreme Court judge has sided with a Whistler homeowner in a court battle the provincial body responsible for property valuations warned could open the "floodgates" for British Columbians to challenge the assessment process in court.

In a decision released last week, Justice Lindsay Lyster found the Property Assessment Review Panel (PARP) failed to give a fair hearing to a property owner who asked the members of the panel to recuse themselves because they were paid through taxes levied according to the same property values they were tasked with deciding.

Lawyers for B.C.'s Attorney General appeared at the hearing alongside lawyers for the review panel and B.C. Assessment because the case is the first judicial review of a panel decision.

The province claimed the case could threaten the streamlined process written into law to handle thousands of B.C. property assessment appeals each year.

But the judge said procedural fairness had to come first.

"I appreciate that the PARP operates under significant time constraints, and must process a large number of appeals in a short period of time. However, those constraints do not eliminate the PARP's obligation to provide the property owners appearing before it with a fair hearing," Lyster said.

"This was not a fair hearing."

'Priced below B.C. Assessment'

B.C. Assessment would not comment on the decision, and the lawyer representing the homeowner would not comment while the province still has a window to appeal.

On the surface, the 22-page decision reads like a descent into a rabbit hole of laws, statutes and legalese.

But beneath the bureaucratic language is a fundamental challenge to the work of an agency whose annual valuations have become a reflection of the province's over-heated real-estate estate market.

The B.C. Assessment Authority delivers assessments for more than two million properties each January. The amount is determined by considering nearby sales and comparing factors like the size, age, location and best use of the property.

Homeowners have until Jan. 31 to file appeals with the Property Appeal Review Panel which then has until March 16 to adjudicate all the decisions.

People who are not happy with an outcome then have until April 30 to file a challenge to the Property Assessment Appeal Board, which, like the Property Assessment Review Panel, is considered an independent tribunal.

It's not the first time the homeowner — a numbered company — has challenged the status quo.

In a 2019 appeal board decision confirming a $3.8 million assessment of the same property — which is now assessed $1 million higher — Ivan Bern, the lawyer representing the homeowner, accused B.C. Assessment of being "complicit in the problem canvassed almost daily in the media, concerning the dramatic rise in market values of B.C. real estate."

Bern claimed the assessor "continuously" errs on the side of massive increases unsubstantiated by market evidence.

"One need only glance at current listings throughout B.C., and note the phrase in marketing literature 'priced below B.C. Assessment,' " the decision quotes Bern as saying.

"That is a big selling feature to prospective buyers, because it tells them that they can acquire the property at a market discount to what the experts at B.C. Assessment have divined the actual value to be."

Claim of institutional bias

The B.C. Assessment Authority told the court between 22,000 and 32,000 appeals have been filed with the review panel in the past five years.

Hearings typically last 30 minutes, including eight minutes for the complainant, eight minutes for B.C. Assessment to respond, six minutes for questions and deliberation and four minutes to deliver the decision.

The judge's decision says things went off the rails at the hearing in question on Feb. 23, 2021.

According to court filings, Bern spent eight minutes arguing that the panel was institutionally biased and should disqualify itself because "all panel members are remunerated, based on the tax levies, that are set in relation to the assessments issued by B.C. Assessment."

At the 18-minute mark, the panel said they didn't think they could deal with the challenge, but effectively offered to kick it up to the appeal board.

Bern said he wanted to proceed with the hearing, but asked whether he could cross-examine the assessor. The chair of the panel wouldn't let him.

The hearing wrapped in 38 minutes with the panel confirming the latest, $4.8 million property assessment.

The province argued that the homeowner should have taken the case to the second level of challenge — the appeal board — before going to court.

But Lyster said the appeal board doesn't have the mandate to consider questions of institutional bias.

"I have considered the submissions made with respect to the potential for the floodgates to be opened," she wrote.

"But the court cannot shirk its constitutional function."

'Not a frivolous application'

Lyster said the review panel should have considered the bias application.

"The merits of the institutional bias application are not before me, but it was not a frivolous application," she wrote.

The judge said the panel compounded its error by seemingly holding it against Bern for using his allotted time for presenting evidence to argue about bias.

She also said the panel should have at least considered letting Bern cross-examine the assessor.

"Holding parties to reasonable time limits is not inherently unfair," she said.

"But in a situation such as this, where a party brings a procedural application which takes a few minutes, the PARP must be prepared to still give that party sufficient time to present its evidence."

The B.C. Supreme Court ruling would normally result in a new hearing, but the tight deadlines — mandated by law — make that impossible because the dates for holding review panel hearings in 2021 have already come and gone.

The homeowner said they would be happy instead with a declaration of procedural unfairness that could serve as a guide to the panel in the future.