Executive Summary: Key Legal and Evidentiary Issues

• Use of identical accommodation sales data in both the cost and income assessment models, and whether this dual use is legally permissible under Kindersley.
• Reliance by the Assessment Appeals Committee on a prior leave-to-appeal decision as if it were binding precedent, rather than conducting its own independent legal analysis.
• Proper interpretation of the Saskatchewan Court of Appeal’s decision in Kindersley regarding multiple use of sales in different valuation models and stratifications.
• Scope of the Committee’s duty to grapple meaningfully with core arguments and evidence raised by the taxpayer about market adjustment factors and comparability of sales.
• The role of prior-year assessment decisions and leave rulings in subsequent assessment years, and whether they can short-circuit fresh adjudication.
• Appellate oversight of administrative tribunals’ reasoning, especially when they treat non-precedential leave decisions as determinative of substantive issues.

Background and facts of the assessment dispute
Souris Valley Lodging Inc. owned two hotel properties located in the Rural Municipality of Edenwold No. 158, categorized within Cluster 91, a rural community with strong urban influence. For the 2022 taxation year, the Saskatchewan Assessment Management Agency (SAMA) assessed these hotel properties using the modified cost approach. Under this method, SAMA determined the replacement cost new less depreciation for the hotel improvements and then applied a market adjustment factor (MAF) to arrive at the assessed value to be added to the land.
To build its 2022 models for accommodation properties, SAMA created two MAF models. The first was the Cluster 30 Model, based on ten accommodation property sales from more urban, higher-population locations connected by major highways, resulting in a MAF of 0.88. The second was a Multi-Cluster or Non-Cluster 30 Model derived from several other clusters (41–43, 62, 64 and 81), which encompassed mid-size to smaller urban communities, bedroom communities with varying degrees of urban influence, and northern communities.
Because there were no actual sales in Cluster 91 during the relevant period, SAMA used the comparable neighbourhood method. It concluded that the Cluster 30 sales were the most comparable to the subject hotels and accordingly applied the Cluster 30 Model and its 0.88 MAF to Souris Valley’s properties. At the same time, those same Cluster 30 accommodation sales were also used by SAMA to derive a capitalization rate for a separate valuation model, the income approach to value, which SAMA applied to accommodation properties in cities.

Prior year (2021) assessments and earlier appeals
The 2021 assessments of the same hotel properties were carried out using the same basic approach and the same market evidence. Souris Valley appealed the 2021 assessments to the local Board of Revision, arguing that the 0.88 MAF associated with the Cluster 30 Model overstated value and created inequity when compared with other accommodation properties that benefited from lower MAFs under the Non-Cluster 30 Model. The Board accepted that position and ordered that the lower 0.36 MAF be applied instead.
The Rural Municipality (represented by SAMA) appealed that Board decision to the Assessment Appeals Committee of the Saskatchewan Municipal Board. The Committee allowed the appeal and restored SAMA’s original 2021 assessments, but it declined to decide whether it was an error for SAMA to use the Cluster 30 sales both to construct the cost-approach MAF and to derive an income-approach capitalization rate. Souris Valley then sought leave to appeal the Committee’s 2021 decision to the Court of Appeal. In a chambers decision on leave, a single judge of the Court of Appeal (Kalmakoff J.A.) dismissed the leave application, including on the proposed ground that Kindersley prohibited SAMA from re-using the same sales across the two different models. The judge stated that Souris Valley had misread Kindersley and that the case did not stand for a blanket prohibition on re-use of sales for both a cap rate and a MAF.

Appeal of the 2022 assessment to the Board of Revision
For the 2022 assessment year, Souris Valley again appealed to the Board of Revision. It argued that SAMA erred in applying the 0.88 MAF to its hotels, asserting that this factor was excessive, did not reflect market conditions, and led to an assessment that did not bear a fair and just proportion to market value when compared with similar accommodation properties. It pointed out that other, allegedly comparable hotels were assessed using the Non-Cluster 30 Model with a significantly lower MAF.
Crucially, Souris Valley also challenged SAMA’s methodology in using the same set of Cluster 30 sales both to develop the MAF under the modified cost approach and to derive a capitalization rate for the income approach applied to other accommodation properties. It relied on the Court of Appeal’s earlier decision in 994552 N.W.T. Ltd. v Kindersley (Town), arguing that Kindersley stood for the principle that overlapping sales arrays cannot be used to value properties in more than one stratification and that such re-use constituted an error of assessment principle.
The Board, however, dismissed Souris Valley’s 2022 appeal. It applied what it described as a “reasonable person” standard of review to SAMA’s assessment work and concluded that Souris Valley had not discharged its onus of demonstrating error. The Board accepted SAMA’s explanation of its models and did not interfere with the 0.88 MAF or the broader methodology.

Appeal of the 2022 assessment to the Assessment Appeals Committee
Souris Valley then appealed the Board’s 2022 decision to the Assessment Appeals Committee. It advanced several grounds of appeal: that the Board had applied the wrong standard of review; that its reasons were inadequate; that it relied improperly on the prior year’s (2021) assessment and decisions; that it erred in finding SAMA could lawfully use the same accommodation sales both for the income-approach cap rate and the cost-approach MAF; and that the Board misapprehended or failed to consider relevant evidence.
The Committee first addressed standard of review. Relying on the Saskatchewan Court of Appeal’s administrative-law guidance, it found that the Board had applied an incorrect standard by framing its task in terms of a “reasonable person” reviewing the assessor’s work. With the parties’ agreement, the Committee set aside the Board’s decision on that basis and undertook its own analysis of the correctness of the assessment. It distilled the dispute into two key questions: whether SAMA had erred in developing and applying the 0.88 MAF to the subject properties, and whether SAMA’s use of the same accommodation sales in different models (cost and income) was properly before the Board and, if so, whether it was an error.
On the first question, the Committee concluded that Souris Valley had not produced sufficient persuasive evidence that the Non-Cluster 30 sales were more comparable than the Cluster 30 sales or that the 0.88 MAF resulted in an erroneous or inequitable assessment. It characterized Souris Valley’s material as essentially its own opinion rather than compelling contrary evidence, and it was satisfied that SAMA’s explanation of the assessment model was complete, extensive and convincing. On that basis, it dismissed the attack on the 0.88 MAF.

The Committee’s reliance on the prior leave decision
On the second question—the legal propriety of using the same Cluster 30 accommodation sales to develop both a cost-approach MAF and an income-approach capitalization rate—the Committee treated the earlier 2021 leave-to-appeal decision as effectively settling the issue. It noted that Souris Valley had put forward essentially the same record and arguments in 2022 as it had in 2021 and referred to appellate comments in Brandt about how similar approaches and arguments across years would, in practice, often yield similar results.
The Committee then turned squarely to the 2021 leave decision (CACV4035). It cited the single judge’s analysis rejecting Souris Valley’s reading of Kindersley and his conclusion that Kindersley should not be interpreted as forbidding the use of sales to determine both a cap rate under the income approach and a MAF under the cost approach, but rather as prohibiting multiple use of sales within one model in a way that mingles comparable and non-comparable properties. Treating that analysis as “directly relevant” and stating that the leave decision “determines the issue in its entirety,” the Committee held that SAMA made no error in using the accommodation sales in separate models and dismissed the appeal.

Court of Appeal’s analysis of leave decisions and tribunal reasoning
Souris Valley obtained leave to appeal the Committee’s 2022 decision to the Saskatchewan Court of Appeal on three questions of law, but the Court found it necessary to address only the first: whether the Committee erred by relying on the 2021 leave decision and its interpretation of Kindersley as determinative of Souris Valley’s argument about re-using the same sales in separate models and stratifications.
The Court began by reaffirming a core appellate principle: leave decisions are not adjudications on the merits and are not binding precedent. A court considering leave decides only whether the proposed appeal warrants the court’s attention, not whether the appeal should ultimately succeed. Accordingly, the observations of a single judge on a leave application—even if they touch on the legal issues—do not bind future panels and do not carry full precedential weight. The Supreme Court of Canada and other appellate courts have consistently recognized that a denial of leave does not endorse the underlying decision or its reasoning.
The Court then turned to administrative-law fundamentals. Administrative decision-makers must provide reasons that meaningfully address the central issues and concerns raised by the parties. While tribunals are not required to respond to every argument, they must grapple with key issues in a way that shows they were alert and sensitive to the matters in dispute. A tribunal cannot simply default to another decision, such as a leave ruling, and treat it as conclusively resolving a live question of law and evidence before it.

Error of law in treating the leave decision as determinative
Applying those principles, the Court closely examined the Committee’s reasons. It noted that the Committee explicitly stated that the 2021 leave decision “determines the issue in its entirety” and, in substance, used that decision as the sole basis for rejecting Souris Valley’s challenge to SAMA’s use of the same accommodation sales in different models. There was no independent analysis of Kindersley or of the particular assessment practice at issue; instead, the Committee effectively adopted the leave judge’s comments as if they were binding law and treated its own role as already pre-decided.
The Court held that this approach was legally flawed in two interrelated ways. First, it misapplied the law on the precedential status of leave decisions by treating the 2021 ruling as if it had the force of binding appellate precedent. Second, by relying on the leave decision in that way, the Committee failed to discharge its duty to conduct an independent analysis and to engage meaningfully with Souris Valley’s key legal argument about the use of sales across different models and stratifications. This constituted an error of law sufficient to warrant appellate intervention.
While SAMA argued in the Court of Appeal that any error was merely technical and without practical effect—on the theory that both the Committee and the leave judge had correctly understood and applied Kindersley—the Court rejected that characterisation. It emphasized that the problem was not the substantive interpretation of Kindersley as such, but the Committee’s abdication of its decision-making role by deferring to a non-precedential leave ruling instead of deciding the issue itself on the basis of assessment law and the record before it.

Outcome and next steps on remittal
In its conclusion, the Court of Appeal held that the Committee erred in law by treating the 2021 leave decision as determinative of whether SAMA could properly use the same accommodation sales in separate valuation models and stratifications. Because the Committee’s error went to the heart of its reasoning on a central legal and evidentiary issue, the Court allowed Souris Valley’s appeal and remitted the matter to the Committee for reconsideration in accordance with proper legal principles. The Court expressly left it to the Committee on remittal to decide, among other things, a preliminary jurisdictional issue—whether the Committee in fact had jurisdiction to hear Souris Valley’s argument about re-use of sales in different models that had been raised in the earlier assessment year.
In terms of practical consequences, the Court did not undertake its own reassessment of the hotel properties and did not fix a new assessed value or direct application of a specific MAF or cap rate. Instead, it ordered that the dispute over the assessment methodology and the 0.88 MAF be reconsidered by the Committee. The Court ordered that Souris Valley Lodging Inc. have its costs of the leave application and the appeal “in the usual way,” but it did not set out any specific dollar amount for those costs or for any change in assessed value or tax liability. As a result, while Souris Valley is clearly the successful party in the Court of Appeal, the total monetary amount of any costs, damages, tax savings or assessment reductions in its favour cannot be determined from this decision alone and will depend on subsequent steps before the Committee or in the costs process.