ENTERPRISE PROPERTIES LTD v FLAGSTAFF (COUNTY)

This decision concerned an Application for Judicial Review by the Applicant, Enterprise Properties Ltd. (“EPL”), challenging the vires of property tax bylaws and a municipal budget enacted by the Respondent, Flagstaff County (“Flagstaff”), under the Municipal Government Act, RSA 2000, c M-26 (the “MGA”).

EPL argued that portions of the bylaws and budget were ultra vires to the extent they authorized the collection of property taxes for transfer to municipal reserve funds for use beyond the fiscal year. EPL also alleged that the scheme was discriminatory. Flagstaff contended that the MGA permits municipalities to collect property taxes and allocate a portion of those revenues to municipal reserve funds.

EPL sought to rely on an expert Affidavit in support of its Judicial Review Application. Reed J. confirmed that an Application for Judicial Review pursuant to Rule 3.22 is generally confined to the record before the decision-maker, subject to limited exceptions, including where additional evidence is required to establish bias, procedural unfairness not apparent on the record, provide background context, or address an inadequate record. Justice Reed held that none of the exceptions applied and found the Affidavit was inadmissible.

Justice Reed confirmed that the standard of review for the vires of subordinate legislation is reasonableness. Reed J. emphasized that municipal bylaws benefit from a presumption of validity and that the Court’s role is not to assess policy merits, but whether the municipality adopted a reasonable interpretation of its enabling statute.

Reed J. rejected EPL’s argument and held that the statutory scheme of the MGA reasonably contemplated both transfers to and from reserve funds as part of municipal budgeting. Justice Reed found EPL’s interpretation unduly narrow and inconsistent with the text, context, and purpose of the MGA, including provisions requiring long-term financial planning. The Court also rejected the allegation of discrimination, holding that the MGA expressly permits different tax rates for different classes of property and that EPL was treated the same as other ratepayers within its class.

The Court held that Flagstaff’s authority was apparent on the face of the MGA. However, if this was not the case, Reed J. found that Flagstaff’s authority arose by necessary implication, as a statutory grant of power impliedly includes all the necessary powers required to exercise that power.

Accordingly, Justice Reed dismissed the Application. The Court held that Flagstaff, as the successful party, was presumptively entitled to costs pursuant to Rule 10.29, and directed the Parties to attempt to agree on quantum, with leave to provide submissions within 30 days if necessary.