Sarchuk,
TCJ:—The
appeals
of
William
A
White
from
reassessments
of
income
for
his
1976,
1977
and
1978
taxation
years
were
heard
in
Calgary,
Alberta,
on
December
16,
1983.
The
appellant
is
a
resident
in
the
Village
of
Bellevue,
Alberta.
In
1963,
he
acquired
131.5
acres
of
land
near
the
village
for
$14,600.
From
the
time
of
acquisition
until
the
date
of
its
sale
the
appellant
maintained
his
principal
residence
on
the
property
and
attempted
to
carry
on
a
ranching
operation
thereon.
In
1976,
he
sold
the
property
for
proceeds
of
disposition
of
$260,000.
In
his
return
of
income
for
the
1976
taxation
year
he
reported
capital
gain
arising
from
the
sale
in
the
amount
of
$49,452.
By
notice
of
reassessment
dated
July
29,
1982
the
respondent
increased
the
capital
gain
reported
by
$155,430.
The
issue
is
whether
or
not
the
respondent
was
correct
in
reassessing
the
appellant
so
as
to
increase
the
capital
gain
and
to
increase
the
reserves
allowed
in
the
1976,
1977
and
1978
taxation
years
on
the
assumption
that
the
fair
market
value
of
the
property
disposed
of
by
the
appellant
at
Valuation
Day
as
$39,199.62
and
not
$196,500
as
claimed
by
the
appellant.
Mr
White
is
a
life
long
resident
of
the
Crowsnest
Pass
area
(Crowsnest)
and
in
particular
of
the
Village
of
Bellevue,
now
part
of
the
Municipality
of
Crowsnest
Pass
(The
Municipality)
and
has
for
a
number
of
years
carried
on
business
in
the
surrounding
area.
In
1969,
he
formed
Bill
White
Insurance
Agencies
Ltd
in
Blairmore,
a
larger
centre
approximately
four
miles
from
Bellevue.
The
business
involved
insurance
and
real
estate
with
primary
emphasis
on
the
residential
market.
In
1971,
Crowsnest
was
served
by
the
appellant’s
firm,
by
Radford
Insurance
Agencies
Ltd
and
by
Vets
Insurance
Agencies
Ltd.
It
was
the
appellant’s
estimate
that
his
company
handled
40
per
cent
of
the
real
estate
business
in
the
area.
The
Municipality
consists
of
a
narrow
east-west
corridor
located
in
the
extreme
southwest
of
the
province
of
Alberta.
Bellevue
is
not
industrialized
and
was
described
by
Mr
White
as
a
“bedroom”
community
for
the
area.
Some
Bellevue
residents
were
employed
in
other
towns
and
commuted
daily
to
coal
fields
as
far
as
60
miles
away.
The
economic
stability
of
the
area
was
dependent
on
coal
and
it
was
Mr
White’s
testimony
that
during
the
1960s
and
early
1970s
business
was
slow
with
only
one
colliery
operating.
However,
in
1970,
Kaiser
Resources
Ltd
moved
in
and
commenced
a
substantial
mining
operation
near
Sparwood,
British
Columbia,
located
west
of
the
Crowsnest
Pass,
approximately
40
miles
from
Bellevue.
The
coal
industry
became
revitalized.
Sales
of
coal
were
made
to
Japan
and
existing
companies
such
as
Coleman
Collieries
Ltd
and
Fording
Coal
Ltd
began
to
enlarge
their
mining
capabilities.
Mr
White
testified
that
as
the
coal
industry
expanded
the
real
estate
business
in
the
whole
of
the
Crowsnest
area
profited
as
well.
The
supply
of
homes
was
short
and
residences
sold
almost
immediately
upon
listing.
In
1970-71
Mr
White
was
involved
with
Craig
Construction
which
bought
the
last
14
lots
in
Blairmore
and
commenced
the
largest
residential
project
in
years.
It
was
his
opinion
that
Bellevue
was
a
suitable
residential
location
for
colliery
employees
from
all
parts
of
the
Crowsnest
area.
Bus
transportation
was
available,
the
climate,
location
and
the
fact
that
Bellevue
was
distanced
from
the
actual
mining
areas
made
it
desirable
as
a
residential
area.
The
property
in
question
was
situated
in
the
northwest
quadrant
of
Bellevue.
The
southern
portion
was
relatively
flat
and
there
was
some
residential
development
adjacent
to
the
White
property.
The
existing
elementary
school
was
located
to
the
west,
while
downtown
Bellevue
was
approximately
eight
blocks
away.
There
was
no
high
school
in
Bellevue.
At
the
time
of
purchase
the
property
consisted
of
a
cleared
17-acre
field
and
a
residence
with
all
services
including
water,
gas
and
power.
The
appellant,
working
on
a
part-time
basis,
cleared
and
prepared
a
further
65
acres.
In
1976,
the
White
property
was
sold
for
approximately
$2,000
per
acre
to
Fech
Properties
of
Canada
Ltd,
a
company
in
the
business
of
land
acquisition
and
development.
The
basis
for
the
sale
price
was
a
1974
report
prepared
by
Mr
G
Zezulka
of
Reliance
Agencies
Ltd
(who
was
not
called)
suggesting
a
value
of
$230,000.
The
Valuation
Day
value
employed
by
the
appellant
in
his
tax
return
was
arrived
at
by
discounting
the
1976
sale
price
of
$2,000
per
acre
to
December
31,
1971.
Mr
Glen
Balderston,
an
accredited
appraiser
with
membership
in
the
Appraisal
Institute
of
Canada,
testified
for
the
appellant.
He
has
been
a
full-time
appraiser
with
Reliance
Agencies,
Lethbridge,
Alberta,
since
1976
and
a
partner
in
that
firm
since
1979.
Prior
to
that
he
was
employed
as
a
mortgage
officer
with
the
Royal
Trust
Company
and
as
senior
appraiser
with
the
Alberta
Housing
Corporation.
In
conducting
the
present
appraisal
in
addition
to
his
personal
knowledge
of
the
Crowsnest
area
he
was
assisted
by
reference
to
other
sources
including
the
files
of
Reliance
Agencies
Ltd,
and
information
obtained
from
the
Revenue
Canada
data-bank.
He
held
discussions
with
the
administrator
of
the
Municipality
and
with
the
principals
of
Vets
Insurance
Agencies
Ltd.
Prior
to
amalgamation
into
the
Municipality,
the
area
consisted
of
a
series
of
small
residential
communities
including
Coleman,
Blairmore
and
Bellevue.
These
towns
developed
because
the
geographical
features
of
the
pass
created
a
situation
where
habitable
area
at
a
reasonable
cost
was
not
readily
available.
Where
it
was
available
small
communities
sprang
up.
The
towns,
according
to
Balderston,
were
not
isolated
economically
but
operated
as
a
single
unit.
This
was,
in
his
view,
a
major
factor
in
the
ultimate
amalgamation.
Bellevue
was
primarily
the
residential
part
of
Crowsnest
with
a
small
business
sector.
The
main
commercial
services
were
concentrated
in
Blairmore.
Employment
and
income
sources
in
Bellevue
and
the
rest
of
Crowsnest
were
tourism
and
the
coal
industry.
The
real
estate
market
in
Bellevue
fluctuated
depending
on
the
strength
or
weakness
of
the
primary
industries.
It
reached
a
nadir
in
the
late
1960s
but
there
was
a
Significant
upsurge
in
1971.
There
was
a
strong
dependency
on
coal
in
Crowsnest
and
as
the
coal
market
became
strong
with
the
1970-71
expansion
of
Coleman
Collieries
Ltd,
the
arrival
of
Kaiser
Resources
and
the
opening
of
the
Elkfort
mine
by
the
Fording
Coal
Company
Ltd
the
real
estate
market
also
became
stronger.
Bellevue
was
described
as
being
excellently
located.
It
was
removed
from
the
heavy
industrial
activity
in
other
parts
of
Crowsnest
and
thus
was
ideally
suited
for
residential
development.
It
was
well
located
with
respect
to
shopping,
major
transportation
routes,
schools
and
services.
From
a
real
estate
point
of
view
it
was
aesthetically
pleasing.
Balderston
stated
that
there
were
no
sites
comparable
to
the
White
property
either
in
Bellevue
or
in
any
of
the
other
towns.
It
was
his
opinion
that
the
highest
and
best
use
of
the
property
in
1971
was
for
redevelopment
as
a
residential
subdivision.
However,
because
of
a
marked
lack
of
reasonably
similar
comparables
a
valuation
technique
known
as
the
market
data
approach
would
not
be
appropriate.
As
a
result
he
utilized
the
residual
development
approach.
Assuming
that
an
average
acre
of
land
normally
yields
four
to
six
lots
measuring
50’
x
100’
(the
standard
residential
lot
size
in
Bellevue)
and
making
the
necessary
adjustments
for
the
topography
of
the
property
and
for
municipal
reserve
commitments
he
concluded
that
the
property
would
yield
373
building
lots.
To
establish
a
potential
gross
sales
price
Balderston
used,
notwithstanding
a
lack
of
sound
comparable
sales,
a
market
data
approach
which
he
said,
established
that
residential
lots
were
selling
in
the
Crowsnest
from
$10
to
$30
per
front
foot.
He
conceded
that
only
three
of
the
comparables
were
located
in
Bellevue
and
were
sales
made
in
late
1972
and
1973.
Nonetheless,
it
was
his
conclusion
that
lots
on
the
White
property
could
be
expected
to
sell
for
$12
per
front
foot
for
lower
plateau
lots
and
$14
per
front
foot
for
hillside
lots.
On
this
analysis
he
determined
that
the
potential
gross
sales
price
for
the
lots
on
the
White
property
would
be
$233,400.
To
determine
the
present
worth
Balderston
analysed
potential
development
costs
including
the
cost
of
basic
services.
He
testified
that
in
his
opinion
the
village
of
Bellevue,
as
it
then
was,
would
have
welcomed
the
development
and
would
have
borne
all
of
the
servicing
costs.
This
was,
according
to
Balderston,
the
policy
of
Bellevue
in
the
1960-1971
time
period.
He
allocated
to
sales
costs
5
per
cent
of
the
potential
gross
sales
price,
the
sum
of
$5,000
as
miscellaneous
financing
and
development
costs
and
the
sum
of
$56,700
as
the
developer’s
profit
margin.
These
development
costs
of
$73,700
subtracted
from
the
potential
gross
sales
price,
produced
a
net
return
from
the
raw
land
of
$159,700.
It
was
his
opinion
that
the
appropriate
discount
factor
to
represent
the
cost
of
the
funds
invested
in
the
property
over
the
number
of
years
necessary
to
sell
the
developed
lots
was
8
per
cent
and
that
this
accurately
reflected
the
prevailing
market
rates
in
existence
in
1971.
Since
in
his
view
the
subject
property
would
be
developed
over
a
seven-year
period
with
sales
of
lots
commencing
immediately
upon
registration
of
the
subdivision,
applying
the
8
per
cent
discount
factor
indicated
a
present
worth
of
the
land
of
$119,000
or
approximately
$912
per
acre.
The
respondent
called
Robert
Michael
Schmitt,
an
appraiser
with
Revenue
Canada
since
1976.
He
has
conducted
a
number
of
appraisals
in
that
time,
including
five
or
six
V-Day
valuations
of
properties
in
the
Crowsnest.
In
1983
he
becme
accredited
with
the
Canadian
Institute
of
Chartered
Accountants.
After
physically
examining
the
White
property
and
the
neighbouring
area
he
concluded
that
there
were
only
three
possible
uses
for
the
land.
It
could
be
used
for
farming/ranching,
or
as
a
hobby
farm
with
some
acreage
subdivision
as
the
opportunity
arose,
or
it
might
possibly
be
developed
as
a
residential
subdivision.
It
was
his
conclusion
that
the
highest
and
best
use
of
the
White
property
was
that
of
a
hobby
farm,
coupled
with
some
sporadic
sales
of
lots
if
and
when
an
opportunity
presented
itself.
He
agreed
with
Balderston
that
there
were
no
com-
parable
sales
in
Bellevue
(nor
in
the
rest
of
the
Crowsnest)
so
that
data
to
provide
reliable
analysis
was
not
available.
With
what
comparables
were
available
he
attempted
to
determine
“what
a
dollar
could
buy
in
the
area”
and
for
that
purpose
compared
the
White
property
to
small
tracts
of
land
(some
of
which
included
homes)
which
could
be
used
for
residential
purposes
and
which
were
adjacent
to
town
sites.
All
of
the
evidence
indicated
that
the
development
of
residential
sites
in
the
whole
of
the
Crowsnest
area
at
the
relevant
time
occurred
on
small
parcels
of
land
with
no
more
than
10
to
15
houses
being
built
at
one
time.
However,
no
such
developments
had
been
built
in
Bellevue
and,
in
fact,
it
was
his
evidence
that
there
was
no
record
of
any
single
family
dwelling
construction
starts
in
Bellevue
from
1965
to
1971
inclusive,
and
nine
from
1972-1975
inclusive.
There
was
a
significant
increase
in
1976.
Mr
Schmitt
attempted
to
determine
comparable
values
of
land
in
the
three
categories.
The
property
was
not
suitable
for
a
farming
operation,
the
climate
not
being
suitable
for
crops
and
there
was
no
room
for
expansion
to
support
a
cattle
operation.
Comparable
range
lands
had
a
value
of
$70
to
$100
per
acre.
To
analyze
the
property
as
a
hobby
farm
with
minimal
small
acreage
sale
potential
was
difficult
since
as
he
admitted
the
comparables
available
were
less
than
satisfactory
for
a
market
data
approach,
and
were
of
limited
assistance
in
trying
to
place
a
value
on
an
unusual
property.
This
absence
of
sales
of
similar
properties
created
substantial
difficulties
for
Mr
Schmitt
(as
well
as
for
Mr
Balderston)
in
relation
to
a
possible
residential
development
as
well.
There
were
no
sales
of
larger
(or
smaller)
parcels
of
development
land
even
remotely
similar
in
Bellevue
nor
in
the
whole
of
the
Crowsnest
area
in
1971.
This
lack
of
local
data
forced
Mr
Schmitt
to
examine
the
1971
real
estate
market
in
several
other
small
Alberta
towns
of
comparable
size.
It
was
his
evidence
that
there
was
more
demand
for
homes
and
greater
activity
in
the
construction
and
building
trades
in
Pincher
Creek,
in
Fort
MacLeod
and
in
Claresholm.
Small
parcels
of
land
16
acres
and
4
acres
in
size
were
sold
in
the
Pincher
Creek
area
in
1971
for
$462
and
$597
per
acre
respectively.
In
that
same
year
serviced
lots
in
Pincher
Creek
were
selling
for
$600
to
$650
per
lot
and
for
$500
per
lot
in
Fort
MacLeod
and
Claresholm.
He
made
reference
to
a
Lethbridge,
Alberta,
development
where
an
immediate
demand
for
land
existed
and
which
demand
was
known
to
the
public
and
where,
notwithstanding
these
factors,
the
land
was
valued
at
$400
per
acre.
These
areas
had
a
higher
level
of
demand
than
Bellevue
and
it
was
Mr
Schmitt’s
opinion
that
serviced
lots
in
Bellevue
would
have
a
lower
value.
If
there
was
in
fact
a
demand
for
serviced
lots
in
Bellevue
strong
enough
to
encourage
development,
values
might
range
from
four
to
five
hundred
dollars
per
acre.
However,
it
was
his
opinion
that
since
Bellevue
had
approximately
404
existing
single
family
dwellings
in
1971,
taking
into
acount
the
fluctuating
economic
history
of
Bellevue,
its
location
in
the
pass
and
other
factors,
it
was
not
realistic
to
suggest
that
131.5
acres
could
be
brought
on-stream
for
subdivision
use
during
the
next
few
years.
There
was
no
cogent
and
acceptable
evidence
upon
which
a
doubling
of
the
number
of
residential
dwellings
in
Bellevue
could
be
anticipated
or
expected.
Since,
in
his
view,
it
was
not
feasible
to
subdivide
and
market
the
whole
of
the
131.5
acres,
such
a
development
being
excessive
for
the
needs
of
the
area,
the
value
would
be
somewhat
less
than
$400
per
acre.
In
summary
Mr
Schmitt
conceded
that
there
was
evidence
of
slow
growth
in
Bellevue
and
that
there
would
be
some
limited
potential
for
a
few
lots.
In
his
view,
although
the
present
use
of
the
White
property
as
a
hobby
farm
with
its
aesthetic
appeal
and
its
capability
of
supporting
some
stock
was
its
best
use,
he
considered
that
subdividing
and
selling
6
to
12
acreage
parcels
in
the
next
5
to
10
years
could
be
feasible.
On
this
basis
it
was
his
view
that
the
White
property
would
have
a
value
range
of
$200
to
$300
per
acre.
He
selected
the
upper
limit
of
$300
producing
an
appraised
value
as
of
December
31,
1971
of
$39,500.
Mr
Schmitt
stated
that
there
were
inherent
errors
in
the
approach
taken
by
the
appellant’s
appraiser,
particularly
in
the
fact
that
his
opinion
was
based
exclusively
on
the
residual
development
approach.
Certain
crucial
assumptions
made
by
the
appellant’s
appraiser
were,
according
to
Mr
Schmitt
“erroneous”.
These
included
the
assumptions
that
there
was
a
significant
need
and
demand
for
residential
building
sites
in
Bellevue
in
1971-72,
and
that
the
village
of
Bellevue
as
it
then
was
would
(or
could)
have
absorbed
all
initial
costs
of
servicing
the
development.
Mr
Schmitt
categorically
stated
that
he
found
no
evidence
of
a
strong
expansionary
trend
in
the
Bellevue
area.
He
made
reference
to
population
statistics
which
showed
a
relatively
static
situation
and
to
the
fact
that
no
building
permits
had
been
issued,
which
established
that
there
were
no
building
starts
in
the
relevant
period
of
time.
Other
towns
such
as
Blairmore
were
preferable
to
Bellevue
as
residential
communities
since
they
were
larger
with
similar
aesthetic
appeal,
provided
greater
amenities
and
were
closer
to
the
mining
sites
and
showed
greater
real
estate
activity.
He
referred
to
a
1969
report
prepared
by
Kaiser
Resources
dealing
with
its
proposed
expansion
and
its
effect
on
the
area.
The
report
suggested
that
any
population
increase
would
take
place
in
the
British
Columbia
region
of
the
Crowsnest.
Alberta
is
divided
into
planning
areas.
Both
Lethbridge
and
the
Crowsnest
area
are
within
the
ambit
and
jurisdiction
of
the
Old
Man
River
Planning
Commission
(the
Commission).
A
report
prepared
in
1970
by
the
Commission
indicated
a
relatively
stagnant
economy
and
possible
emigration
from
the
Crowsnest
region
in
the
coming
years.
It
was
anticipated
that
if
there
was
an
expansion
in
the
coal
industry
it
would
most
likely
occur
in
the
vicinity
of
Elkfort,
Sparwood
and
Ferney
in
British
Columbia
at
the
extreme
opposite
end
of
the
Crowsnest
from
Bellevue.
Mr
Schmitt
disputed
the
appellant’s
assertion
that
in
1971
the
village
of
Bellevue
would
have
absorbed
servicing
costs.
The
supply
of
water
was
an
ongoing
problem
and
existing
needs
could
not
adequately
be
provided
for
as
at
V-Day.
Sewage
facilities
were
not
in
existence
in
Bellevue
at
that
time,
let
alone
available
to
service
a
subdivision
which
would
double
the
size
of
the
village.
It
was
Schmitt’s
opinion
that
to
support
such
financing
the
village
would
have
been
required
to
borrow
substantial
amounts
of
money
and
approval
of
a
provincial
government
authority
at
another
level
was
required
in
such
cases.
He
raised
the
issue
with
the
Commission
and
following
that
discussion
concluded
that
such
approval
would
not
likely
have
been
forthcoming.
Balderston
for
his
part
suggested
the
respondent’s
appraisal
was
based
upon
insufficient
data,
was
poorly
reasoned
and
did
not
accurately
reflect
the
value
of
the
property
on
valuation
day.
Source
material
employed
by
Mr
Schmitt,
such
as
the
book
“History
of
the
Crows
Nest
Pass”
written
in
1952
by
William
Cousins,
was
of
marginal
value
in
determining
the
economic
conditions
of
the
area
in
1971.
Balderston
urged
the
Court
to
find
that
the
respondent’s
appraiser
misinterpreted
statistical
information
relating
to
population
trends
in
Bellevue
and
suggested
that
rather
than
showing
a
population
decrease
the
statistics
indicated
an
increase.
The
market
data
approach
used
in
part
by
Mr
Schmitt
was
inappropriate
for
the
valuation
of
the
property
in
issue,
since
not
only
were
there
no
comparable
properties
but
those
used
were
not
adjusted
for
the
rather
substantial
differences
between
them.
As
a
technique
the
use
of
comparables
from
different
economic
and
geographical
areas
such
as
Lethbridge
or
Pincher
Creek
was
inappropriate.
Mr
Balderston
was
extremely
critical
of
Schmitt’s
“Rule
of
Thumb”
analysis.
Mr
Schmitt
stated
in
his
report
that
“a
rule
of
thumb
is
that
on-stream
acres
usually
market
at
the
value
of
a
serviced
lot
(eg)
sale
per
acre
of
on-stream
land
$500
—
serviced
lot
—
$500
—
per
lot”.
There
is
no
factual
basis
or
analysis
to
support
such
a
“rule”
and
although
it
was
nothing
more
than
an
attempt
to
come
to
grips
with
a
difficult
evaluation
problem,
this
approach,
Mr
Balderston
suggested,
was
not
recognized
by
the
Appraisal
Institute
of
Canada
and
he
personally
had
never
heard
of
such
an
approach
being
employed.
The
appellant’s
position
is
that
the
whole
of
the
Crowsnest
area
is
interrelated
and
that
it
is
necesary
to
view
the
economic
climate,
and
by
extension
the
real
estate
market,
in
Bellevue
in
that
context
and
not
in
isolation.
It
was
argued
that
the
size
of
a
potential
residential
development
in
Bellevue
in
1971
only
be
considered
in
that
context
as
well.
To
support
the
appellant’s
position
counsel
emphasized
that:
1.
The
area
precludes
one
large
urban
centre.
As
a
result
a
number
of
smaller
settlements
developed
wherever
land
could
be
found
which
was
suitable
for
development
and
the
towns
grew
up
physically
close
together.
2.
The
whole
area
is
dependent
upon
the
coal
industry
and
economic
conditions
and
real
estate
values
in
each
town
in
the
area
including
Bellevue
follow
the
fortunes
of
that
industry
in
lockstep.
3.
Many
colliery
employees
live
in
each
of
the
towns
including
Bellevue,
therefore,
an
expansion
of
the
coal
industry
in
one
area
had
direct
impact
on
the
other
areas.
4.
Real
estate
values
in
the
Crowsnest
tend
to
rise
and
fall
as
a
unit.
5.
The
property
was
unique
in
that
there
was
no
other
comparable
property
in
existence
in
the
totality
of
the
Crowsnest
area
in
1971.
6.
The
location
was
ideal
for
residential
subdivision
being
within
the
corporate
limits
of
Bellevue
and
close
enough
to
various
schools
and
amenities.
At
the
same
time
it
was
serviced
by
a
bus-line
capable
of
transporting
employees
to
the
various
mine
sites.
7.
Aesthetically
the
Bellevue
property
was
extremely
pleasing
and
would
be
highly
desirable
for
residential
purposes.
8.
There
was
no
concern
over
the
ability
to
re-zone
the
property
for
residential
development.
9.
Its
potential
for
development
was
enhanced
by
the
fact
that
all
necessary
services
were
readily
available.
The
respondent’s
position
was
that
certain
basic
assumptions
made
by
the
appellant
were
incorrect
and
that
the
conclusions
reached
by
the
appraiser
had
no
basis
in
fact.
The
respondent
cited
the
following
examples:
1.
There
was
no
evidence
to
support
the
assumption
that
the
village
of
Bellevue
could
embark
on
the
financial
undertaking
necessary
to
absorb
the
costs
of
servicing
the
proposed
development.
2.
There
was
no
evidence
to
support
the
assumption
of
an
existing
demand
adequate
to
impel
immediate
commencement
of
a
development
of
approximately
370
lots
which
would
be
sold
within
seven
years.
3.
There
was
no
evidence
adduced
to
support
the
allegations
of
“significant
need
and
demand”
and
“steady
growth
rate”.
There
were
no
population
statistics,
no
unemployment
statistics,
no
reference
to
reports
on
the
economy,
no
expert
evidence
as
to
the
possible
effect
on
Bellevue
of
the
hoped-for
increase.
4.
There
was
no
evidence
that
Kaiser
Resources
(or
any
other
company)
intended
to
subsidize
housing
for
employees
as
far
afield
as
Bellevue.
Counsel
for
the
respondent
suggested
that
Mr
Balderston
did
nothing
more
than
determine
how
many
housing
units
could
be
placed
on
the
White
property
and
then
assumed
that
if
they
were
available
they
would
be
absorbed.
This
was
not
supportable
on
the
evidence
and
was
not
in
fact
what
occurred.
Both
appraisals
are
subject
to
some
criticism.
I
do
not
propose
to
canvass
their
shortcomings
in
detail.
However,
a
few
comments
are
in
order.
There
was
only
one
point
of
agreement
between
the
two
appraisers,
to
wit
that
the
absence
of
relevant
comparables
precluded
the
use
of
the
market
data
approach.
The
problem
of
locating
comparable
sales
encountered
by
both
appraisers
may
have
been
the
reason
why
their
opinions
were
so
contradictory,
but
such
a
marked
disparity
in
approach,
technique
and
ultimate
conclusions
made
the
determination
of
fair
market
value
more
difficult
than
it
should
have
been.
The
respondent’s
appraisal
was
flawed
by
Mr
Schmitt’s
inability
to
support
his
conclusions
by
any
of
the
generally
accepted
appraisal
techniques.
His
fair
market
value
was
determined
in
part
by
reference
to
land
sales
in
Lethbridge,
Pincher
Creek
and
Fort
MacLeod.
While
not
necessarily
inappropriate,
in
this
case
I
am
unable
to
accept
such
comparables
as
persuasive
of
market
value.
They
were
quite
removed
from
the
appellant’s
property,
were
situated
in
geographically
different
locations
and
were
influenced
by
a
totally
different
economic
climate.
No
adjustments
of
any
kind
were
made
to
take
these
factors
into
account.
Since
he
was
prepared
to
rely
on
such
data
to
formulate
his
valuation
the
failure
to
look
for
similar
sales
in
Ferney
and
Sparwood,
towns
closer
to
Bellevue,
geographically
similar
and
equally
dependent
upon
the
coal
industry,
did
not
engender
a
great
deal
of
confidence
in
his
ultimate
conclusion.
Mr
Schmitt’s
reliance
on
the
so-called
rule
of
thumb
approach
(albeit
only
to
confirm
his
opinion
of
the
upper
limit
of
value)
by
its
very
use
raised
a
question
as
to
the
adequacy
of
the
appraisal,
particularly
in
light
of
his
equivocation
on
the
issue
of
the
weight
he
attached
to
it.
For
his
part
the
appellant’s
appraiser
based
his
opinion
on
the
residual
development
approach.
While
this
is
a
recongized
and
accepted
technique
his
opinion
as
to
fair
market
value
depends
to
a
large
extent
on
the
validity
of
certain
assumptions
made
by
him.
I
need
only
note
that
the
evidence
supporting
his
assertion
that
increased
production
by
the
coal
industry
in
the
Crowsnest
would
substantially
increase
personnel
requirements
and
would
concurrently
create
a
corresponding
increase
in
the
demand
for
residential
homes
in
Bellevue
was
tenuous.
Similarly
his
statements
that
‘‘a
significant
need
and
demand”
for
residential
building
sites
existed
and
his
assertion
that
such
demands
were
substantial
enough
to
absorb
a
subdivision
of
the
size
suggested
by
him
were
to
some
extent
unsupported
and
less
than
persuasive.
Estimates
of
market
value,
particularly
in
circumstances
such
as
these
where
no
sound
comparative
data
is
available,
are
very
dependent
upon
the
experience,
astuteness
and
common
sense
of
the
appraiser.
I
am
entitled
to
accept
or
reject,
in
whole
or
in
part,
any
of
the
evidence
before
me.
Both
appraisers
held
their
opinions
honestly,
but
in
the
final
analysis
Mr
Balderston’s
experience,
his
familiarity
and
knowledge
of
the
area
and
his
use
of
a
recognized
appraisal
technique,
all
commend
themselves
to
me.
I
am
not
prepared
to
accept
his
appraisal
in
its
totality
but
on
a
balance
of
probabilities
his
evidence
satisfied
me
that
the
highest
and
best
use
of
the
subject
property
was
subdivision
for
residential
development.
I
also
find
that
the
appellant
has
demonstrated
that
the
value
used
by
the
respondent
was
too
low.
While
he
has
succeeded
to
that
extent
I
am
not
similarly
persuaded
as
to
Mr
Balderston’s
opinion
of
the
fair
market
value
of
the
subject
property.
His
projection
that
the
property
would
be
developed
and
sold
over
a
seven-year
period
is
entirely
too
optimistic.
It
was
not
supported
by
any
independent
evidence
and
was,
as
he
said,
“a
judgment
call”.
From
his
evidence
it
was
apparent
that
a
ten-year
projection
had
been
considered
as
well.
In
my
view
development
over
the
longer
period
of
time
was
more
likely.
In
the
same
vein
while
accepting
Mr
Balderston’s
opinion
that
the
property
was
appropriate
for
future
residential
development
I
am
of
the
view
that
Mr
Balderston
failed
to
sufficiently
consider
the
size
of
the
market
and
should
have
been
more
conservative
in
his
estimate
of
the
optimum
number
of
lots
the
market
was
reasonably
capable
of
absorbing.
In
reaching
the
conclusion
that
Mr
Balderston’s
final
opinion
of
value
is,
in
light
of
all
the
circumstances,
too
generous
I
am
mindful
of
comments
made
by
Walsh,
J
in
Bibby
Estate
v
The
Queen,
[1983]
CTC
121;
83
DTC
5148
at
131
[5157]:
While
it
has
frequently
been
held
that
a
Court
should
not,
after
considering
all
the
expert
and
other
evidence,
merely
adopt
a
figure
somewhere
between
the
figure
sought
by
the
contending
parties,
it
has
also
been
held
that
the
Court
may,
when
it
does
not
find
the
evidence
of
any
expert
completely
satisfying
or
conclusive,
nor
any
comparable
especially
apt,
form
its
own
opinion
of
valuation,
provided
this
is
always
based
on
the
careful
consideration
of
all
the
conflicting
evidence.
The
figure
so
arrived
at
need
not
be
that
suggested
by
any
expert
or
contended
for
by
the
parties.
Having
regard
to
the
totality
of
the
evidence
I
find
the
fair
market
value
of
the
subject
property
as
at
December
31,
1971
to
be
$80,000.
The
appeal
is
allowed
and
the
matter
is
referred
back
to
the
Minister
for
reassessment
on
that
basis.
Appeal
allowed.
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