Earlier this year, the B.C. Court of Appeal released its decision Musqueam Indian Band Board of Review v. Musqueam Indian Band, in which it considered the interpretation of certain provisions of Musqueam’s Property Assessment Bylaw relating to restrictions placed on the use of land. The case may be of interest to taxing First Nations, as many First Nation property assessment laws and bylaws contain similar provisions.
The case came about as a “stated case” from the Band’s Board of Review, which was considering an assessment appeal brought by the Band. The Board of Review asked the Court to determine whether the assessor could properly consider the use of the property as a golf course in assessing the value of the property.
The answer to this question turned on the interpretation of section 26(3.2) of the Band’s Property Assessment Bylaw, which stated “the assessor may include in the factors that he considers under subsection (3), any restriction placed on the use of the land and improvements by the band.” The lease to the Golf and Country Club specifically provided that the property is to be used “only for a golf and country club.”
The Band argued that the assessor should not consider the lease restriction because that restriction was not “placed by the Band”, but rather was placed by the Crown as negotiator of the lease. Because of this, the assessed value should reflect the highest and best use of the property as though it were residential, and not its actual use as a golf and country club. The Shaughnessy Golf and Country Club’s position was that the restriction in the lease should be considered, because the Crown acts on behalf of the Band when negotiating and entering into a lease of reserve lands.
The Court of Appeal framed the key questions as follows: 1. Is there a “restriction” on the use of the Property; and 2. If so, was the restriction “placed by the band”?
The Court of Appeal framed the key questions as follows: 1. Is there a “restriction” on the use of the Property; and 2. If so, was the restriction “placed by the band”?
The Court held that the lease does in fact restrict the use of the property to a golf and country club and that the Crown was acting on behalf of the band when it entered into the lease, thereby making the restriction in the lease one considered to be “placed by the band.” As a result, the assessor can take this restriction into account when determining actual value in accordance with the bylaw.
Musqueam is currently seeking leave to appeal the decision to the SCC. The Commission is reviewing this decision with First Nation assessors, and considering any implications for the drafting of its sample property assessment laws. First Nations are encouraged to review their property assessment laws or bylaws to ensure they refl ect the First Nation’s intentions in respect of use restrictions included in leasing documents.
UPDATE: On October 29, 2015, the Supreme Court of Canada granted leave to appeal, and will hear the Musqueam Indian Band’s appeal from the decision of the British Columbia Court of Appeal.