MOOSE JAW — A resident’s tax-title dispute with the City of Moose Jaw has concluded after a King’s Bench judge ruled that the municipality can take possession of the man’s property and buildings.
Justice Michael Megaw recently released his decision about the matter, with the report summarizing the conflict between the city and Vernon Lester Anderson — owner and shareholder of D-S Automotive Ltd. — and awarding the municipality with the property.
The property is 134 Manitoba Street West and contains the historic Morrison Blackwood Hardware Building — built in 1927 — and an adjacent multi-tenant retail building. Anderson acquired the retail building in 1976 and the hardware building in 1998.
Background
In 2016, Anderson learned that the assessed value of his land was increasing — from $542,300 to $1,724,100, a rise of roughly 317 per cent — and “vigorously disagreed” by complaining to the city and the Saskatchewan Management Assessment Agency (SAMA), the decision said.
The property owner demanded that the parties reduce his assessment value, but he was unsuccessful in his efforts, and since he disagreed with the high level of municipal taxation, he refused to pay taxes until the valuation became “appropriate,” the document continued.
“(Anderson) has stated throughout this matter that he is not trying to avoid paying taxes, rather, he wants to ensure the level of taxation is appropriate,” Justice Megaw noted.
City hall began tax enforcement proceedings by registering a tax lien against the property on Aug. 29, 2018, providing a tax arrears notice on April 18, 2019, and asking the provincial mediation board on Nov. 8, 2019, to take the property title, the report said.
The city informed Anderson on May 19, 2021, that it would take the property title if he didn’t pay his arrears within 30 days, and on Dec. 3, 2021, took that step.
“(The municipality) has remained as the registered owner of the property since that time. The municipal taxes were not paid prior to the city obtaining title to the property,” the report said.
However, before it took the property title, the city sent Anderson a standard tax notice form in October 2021 since he was still the registered owner, the document continued. On Jan. 11, 2022, Anderson visited city hall and gave the front office cashier a cheque for $155,737.76, which was the outstanding tax amount and which the cashier accepted.
However, the city recognized that the cashier erred in accepting the money and sent Anderson a letter on March 10, 2022, saying it had taken the property and he could no longer pay taxes on it, the report said. The municipality also sent back the cheque.
Anderson declined to accept the money and return it to the city, so in July 2022, city hall said it planned to obtain vacant possession of the property, and in September, it served him with a “demand for possession and notice to tenant of intention to apply for a writ of possession” under The Landlord and Tenant Act, the document continued.
However, Anderson refused to vacate the property because of the ongoing dispute, so on Nov. 11, 2022, he commenced legal proceedings against the city by seeking to retain possession of the property based on his payment for outstanding taxes.
“In this regard, it appears he relies on the equitable doctrines of promissory estoppel and laches as against the city,” Justice Megaw write.
“Estoppel” keeps a party from alleging a fact or acting in a certain way and then claiming something opposite to suit their purposes, according to legaldictionary.com. In other words, a party cannot deny a fact already settled as truth.
Meanwhile, the “doctrine of laches” is a legal defence that may be claimed in a civil matter, which asserts that there has been an unreasonable delay in filing the lawsuit, which has prejudiced the defendant or prevented him from putting on a defence.
In response, the city sought an order for possession of the property and asked the court to dismiss Anderson’s entire application since it allegedly failed to disclose a “reasonable cause of action,” the report added.
Judge’s analysis and decision
There was no dispute by either party about what happened, while the factual record was clear and Anderson did not dispute it, although he submitted further material with assertions and arguments that advanced his concerns and criticisms of the process against him, Justice Megaw wrote.
However, the judge did not consider that material, nor did he accept Anderson’s claim that the city acted in “bad faith” by rejecting his payment since the former provided no evidence to substantiate his claim.
The judge used case law from the Saskatchewan Court of Appeal to rule that because Anderson failed to pay his outstanding municipal taxes on time, his right to the property was “extinguished” since the city appropriately acquired the land through The Tax Enforcement Act (TEA).
However, Justice Megaw acknowledged that Anderson was arguing that the city was “estopped” from finalizing the tax enforcement proceedings because the front desk cashier accepted the tax arrears payment, while the city identified this claim “as being grounded in promissory estoppel.”
The judge referred to another appeals court case that ruled promissory estoppel can only be used as a defence — “a shield” — and “not (as) a sword.” Instead, promissory estoppel can only guide the administration of a contract.
“There is no evidence that the actions of the city in originally accepting the payment of the municipal taxes were intended to induce a course of conduct on the part of either Mr. Anderson or D-S,” Megaw wrote, noting that the city’s action of forwarding the tax notice was part of its standard operating procedures and was not “intended to create any different legal relationship” with Anderson.
The judge added that the city employee accepting the cheque “was simply an error,” while under the TEA, Anderson and D-S became tenants of the city after the latter obtained the property title.
Meanwhile, Justice Megaw referred to another appeals court ruling to discuss Anderson’s plea that “the doctrine of laches” applied to this situation. The justice ruled that the “mere passage of time” was insufficient to invoke this doctrine, while the city enforced the tax arrears “in the usual and ordinary course” of time.
The judge added that the city was entitled to a “writ of possession” granting it exclusive possession of 134 Manitoba Street West.
