From the sanctified grounds of religious buildings to the surprising sanctuaries for fruit trees and bomb shelters, we probe the public policy implications when specific properties are relieved from bearing the tax burden, leaving others to shoulder the financial weight. Our discussion navigates the murky waters of the Rural Area Taxation Act, shedding light on the ripple effect tax exemptions have on society.
Also on the show, BC Hydro pulled the plug on a forestry company's cryptocurrency aspirations.
Finally, a sexual assault conviction is overturned as a result of Crown Counsel cross-examining the accused on whether the complainant was attractive and the trial judge making their own assessment of the complaint's attractiveness.
Follow this link for a transcript of the show and links to the cases discussed.
From the sanctified grounds of religious buildings to the surprising sanctuaries for fruit trees and bomb shelters, we probe the public policy implications when specific properties are relieved from bearing the tax burden, leaving others to shoulder the financial weight. Our discussion navigates the murky waters of the Rural Area Taxation Act, shedding light on the ripple effect tax exemptions have on society.
Also on the show, BC Hydro pulled the plug on a forestry company's cryptocurrency aspirations.
Finally, a sexual assault conviction is overturned as a result of Crown Counsel cross-examining the accused on whether the complainant was attractive and the trial judge making their own assessment of the complaint's attractiveness.
Follow this link for a transcript of the show and links to the cases discussed.
time for our regularly scheduled segment. Joining us now, Barrister and Solicitor, with Mulligan Defense Lawyers. It's Michael Mulligan. Michael morning, Welcome to Legally Speaking.
Michael Mulligan:How you doing.
Adam Stirling:I'm doing great. Always good to be here. All right, what is on the agenda for UNI today?
Michael Mulligan:The first case of the agenda today deals with the issue of who does and who does not pay property tax, and it's a bit more complicated than I think many people would think. First of all, we're, all you know, we're used to discussing property taxes that are imposed by municipalities. Right, that process is going on right now in various municipalities. But don't think that you can avoid property taxes by simply getting out of all the municipalities they thought of that. There's no escape. We have in British Columbia an act called the Rural Area Taxation Act which provides for the taxation of real property that's not in any municipality at all. So there's no getting around it that way. You can't just get far enough away. And the particular issue that was just dealt with in court by the BC Supreme Court was an appeal concerning whether there should be taxation applied to a 31 acre island located just off of Schwartz Bay. It's a island assessed at being worth $8.5 million. It's called NAP Island, KNAPP Island.
Michael Mulligan:And the particular issue there is that that act that I mentioned, that the Rural Area Taxation Act, provides a number of exceptions to who can avoid paying any property tax, and the exemptions are similar but not exactly the same as the exemptions which exist in the community charter, which exempts a bunch of categories of property from paying any property tax in a municipality. And that act, by the way, is quite interesting. What we've chosen to exempt, like we've exempted some things which you would say, yeah, that's kind of as obvious, like buildings owned by the municipality itself. They don't have to pay themselves tax. That would be a ridiculous process. We've also exempted things like hospitals don't have to pay property tax. Yeah, that probably makes sense. Everyone's using those a public facility.
Michael Mulligan:Other unusual things, though, include fruit trees are exempt. You don't pay property tax based on increased value created by fruit trees. We've also, oddly, exempted what amounts to things like bomb shelters. So if you construct something designed to provide protection either for people or, frankly, domestic animals, not farm animals in the event of an emergency within the meaning of the emergency and disaster management act, no tax on the cost of that. So if you want to have a super deluxe underground bomb shelter for you and your dog. You're in good shape. Your property taxes can't go up thanks to that exemption to the community charter waiting for some person to make their whole house the bomb shelter, but yes, correct.
Michael Mulligan:There's gonna be some shack above ground and a police should mention below ground. No property tax. Just don't get a farm animal in there. As long as it's for you and your domestic animals, you're in good shape.
Adam Stirling:Absolutely.
Michael Mulligan:That's right. So you might want to redesign that house, and so one of the other exemptions that exists in the community charter and has a similar provision in that act that deals with rural property is an exemption for religious buildings. That's really interesting. The language is different for that exemption in the community charter from the areas outside of municipality. They're similar but not quite the same Now, I should say, on both fronts. That does raise, I think, a really interesting public policy question people should think about, which would be should we be as a matter of public policy exempting? I mean, community charter exempts things like buildings set apart for public worship and the land on which the building stands, and there's the similar exemption exists in that for rural areas. But one of the things people should just think about, of course, is that when municipalities are setting their mill rate, like their tax rate, they kind of figure out how much money they need and then they set the tax rate accordingly. And if you exempt a bunch of things like fruit trees and bomb shelters from having to pay tax, well that means everyone else's tax rate is higher, right. And so in Canada, of course, we have a constitutional right to freedom of conscience and religion, right. But part of that includes a freedom from being compelled to do religious things right. And here, given how the legislation works, you are effectively compelled to subsidize buildings for public worship. Whether you like it or not, whether you agree with the religion or not, whether you're a member of any religion or not, you're subsidizing them. That's what's going on, right. The same public services are being consumed, and if you don't tax them, it's going to come out somewhere, just like if you don't tax bomb shelters, everyone else's taxes are just a little bit higher. So that's something people should think about generally.
Michael Mulligan:Now, with all that background, the particular issue with respect to the half-million dollar island near Schwartz Bay involved whether that island amounted to a quote place of public worship close quote, which is the language used in that rural area taxation act and it was an interesting state of affairs. The island itself was owned by the spouser partner of a Shinto priest, and that person the partner, had owned that island for some time they're going back more than 20 years and the Shinto priest and his partner had for many years lived on Salt Spring Island, where they had a facility there which was exempt from taxation, and that area on Salt Spring Island was called Brightwoods and it was exempted. It was a seven and a half acre site, involved meeting rooms and smaller rooms in a sacred forest or walking paths in a shrine, and nobody lived there, all right, and so that fell within that exemption under the community charters, so it didn't pay any tax. Well, they decided to shut down that facility and decommissioned it in 2021 and move to this island. The island had facilities on it which are related to religious practices, and there was evidence about the particular religion, which includes things like trees being a particular importance to it, encourages prayer practices, seated or walking together or guided or not, and it encourages a relationship with nature, and there were things built on the island which were designed to facilitate all of that walking trails and buildings and water treatment facilities and various things. Yes, and so when the couple moved there, they applied for the exemption under that, the terms of the act, and they said, okay, well, you know, this is now our area for public worship and so therefore, we wished to not pay any tax on it, just like we didn't pay any tax on Salt Spring Island and the facility there they shut down.
Michael Mulligan:The challenge became, first of all, at the first level of the first level of assessment about the property assessment appeal board. They looked at, well, was this really an area for public worship? And they pointed out that, for example, for the last 20 years, all the same improvements existed on the island, but they were for private use, right, guests could be invited there if the owners could go there if they wished. And they pointed out that the claim transition from private worship to public worship would not be apparent to anyone who was sailing past the island. Nothing changed. And, for example, they pointed out that in large type, there was a big sign at the only way you could get to the island saying Private Harbor. That's stuck up there at the only access place. That is not compelling A piece of evidence when you're trying to argue that this is an area for public worship. There's no other way to get to the island. And so they didn't succeed. I know we forgot something. We should have taken down the sign.
Michael Mulligan:And so the board found that the principal use of the improvements were for private worship, not public worship, because there was just no way somebody could conclude that they could go there. Right, I guess it'd be interesting if somebody did show up there and tried to use the trails for the intended purpose, what the response would be. But there was no evidence about that, and so the appeal to the BC Supreme Court was an appeal based, and I must say they didn't disagree with those factual findings I guess it's pretty hard to disagree with. Obviously there's a sign there and there just wasn't a disagreement about those things. But they made an argument premised on a principle that the Supreme Court has talked about when interpreting statutes, and the concept there is there should be a presumption against discrimination when you're interpreting. Well, what does something mean? You should have a non-discriminatory interpretation of things so that people are treated the same way.
Michael Mulligan:Right, people are treated the same way, and so their argument amounted to well, look, this facility we had for some 20 years on Salt Spring Island, that was sort of the equivalent. We really were moving our operation from there to the island and so therefore the island ought to be treated the same way, and that it would be. You should not discriminate between these two facilities. That was really the essence of the argument. It did not succeed in the BC Supreme Court on the judicial review. They found that that finding, given the particular circumstances here including, by the way, the couple lived on the island right, they weren't living at the facility that used to exist on Salt Spring Island, this was their new residence. Right, they moved there. There was a house, I think a couple of other places people could stay, who were invited guests, who got passed the sign, and so they found that that principle really didn't have any application here and this wasn't an area for public worship, and so they are going to need to pay tax on the $8.5 million assessed value of the private island.
Michael Mulligan:But again, the big policy thing to think about is that what should be exempted? Should areas for public worship be exempted at all, because that does impose a burden on people that aren't using those things, and it's sort of dissimilar to some of the other exemptions that you would say well, like a hospital or the municipal yard or the city hall or something, right? Well, this is just sort of a facility for everyone, right? As I said, the concept of freedom of religion means that you also have a freedom from being forced to participate in something. And here, whether you like it or not, all across province of British Columbia, whether you're in or outside of municipality, you are compelled to financially subsidize places of public worship. So I hope people think about whether that's appropriate or not, but in any case that won't be an issue with respect to the island out by Schwartz Bay.
Adam Stirling:Michael Mulligan with Mulligan Defense Lawyers. Legally speaking will continue right after this. Laterally speaking continues. On CFAQ stand seven, he joined with Michael Mulligan from Mulligan Defense Lawyers. Up next, michael, it says you're a forestry company trying to diversify into. Does that say cryptocurrency?
Michael Mulligan:That is a hard right turn for being a forestry company Now, isn't?
Adam Stirling:it. That is, that is how did it go Not well?
Michael Mulligan:Oh, so you're exactly right. This was a case involving a forestry company that decided that wanted to quote, diversify, close quote into cryptocurrency mining, and not in a small way. The forestry company, which interestingly claimed that it was doing so in partnership with the First Nation, and that became interesting in its judgment wished to construct large facilities, data centers, in northern British Columbia to be used for the purpose of cryptocurrency mining, and to do so they needed power, a lot of power, and they filed an application to get hooked up to BC Hydro, which you can do, and BC Hydro has, broadly speaking, a monopoly over the provision of electrical power in British Columbia, and so the starting point would be that if you need to hook up for electricity, they've got to provide it. Otherwise, your house, your business, is going to be pretty dark and not working so well. Now, if you do that, you do have an obligation to pay for system infrastructure. That's only for your sole benefit. So if you need some thick wires or a new transformer or poles put in or whatever, you can be on the hook for paying for it.
Michael Mulligan:But what happened here is that the Lieutenant Governor and Council BC government issued an order in council back in 2022 directing that the BC Hydro stop hooking up cryptocurrency mining companies to the power system why, you might ask. Well, to give you an idea, this particular project and there's a affidavit from the CEO of BC Hydro indicated that the amount of power being requested here was 2.5 million megawatt hours of electricity per year. And you might wonder what is 2.5 million megawatt hours per year? Well, to provide some scope and scale to that figure, the CEO indicated that BC Hydro's nine largest customers they deliver no more than 500,000 megawatt hours of electrical power to each and the nine sites require something in there of a million megawatt hours per year. So it would be like two and a half times the amount of power used by the current nine largest customers of BC Hydro every year.
Michael Mulligan:There was some dispute about whether that would amount to sucking up something in the order of half of the power that would be produced by Site C. That's a lot of power and this is for cryptocurrency, Cryptocurrency mining Great. So half of Site C turned into power supply for the cryptocurrency mining venture by the forestry company, and so they were told no and based on this order in council, which is what got challenged in court and there were a couple of arguments that were made, or a few arguments are made. One argument interesting one was the sort of non-discrimination argument like we talked about in the moving the religious center to the island by Schwartz Bay saying, well, hey, you shouldn't discriminate against us, we're just asking for power. Bc Hydro has been awfully supplier of electricity in British Columbia and so it's just not fair that you could have an order in council just singling out some particular industry saying no power for cryptocurrency mining, but we give power to whatever aluminum smelting or something else. On that basis, the court analyzed all of that but ultimately concluded that this wasn't the case of discrimination in that legal sense. The issue here was the concern about the cost of service, which is what exactly would be implications of this enormous additional power draw in terms of the cost of producing that power, what that would mean we'd have to immediately start working another dam to supply those needs, and so it wasn't found to be discriminatory.
Michael Mulligan:The other interesting argument was this one, and it's interesting in the context of the controversy lately about proposed amendments by the government to the land act, arguing that they need to be brought in line with the declaration of the rights of indigenous people act right. And one of the other arguments the company made was hey, you didn't consult with First Nations before turning down this application. And they pointed to the Declaration of the Rights of Indigenous Peoples Act and said, hey, that says you should be doing that. What's going on? You didn't consult with our proposed, with our partner here. Your decision to turn this down should be struck down on the basis that you fail to consult with them. That was an interesting argument and it would be, I think, even more interesting if that Land Act proposals were passed.
Michael Mulligan:But here the judge, analyzing it, concluded that the applicant for this review, the particular applicant, was the forestry company wanting to become a cryptocurrency mining company on the side, and the applicant wasn't the First Nation. And so, on that basis, the judge found that there just wasn't enough evidentiary basis here to conclude that the First Nation was part of this or what exactly their role would be, and it wasn't them bringing the challenge to the you can't plug in here order. And so the judge found that the DRIPA Declaration of the Rights of Indigenous Peoples Act was not breached when the government did not consult with the proposed partner for the cryptocurrency mining facility. And so the outcome of this is no extension cord to the Sightseed Dam, and the forestry company will have to come up with some other plan if they wish to diversify away from cutting down trees.
Adam Stirling:I'm just sitting here imagining the hardware that would require two and a half million megawatt hours a year. It's hilarious.
Michael Mulligan:You might as well go to Home Depot and get a really, really thick extension cord.
Adam Stirling:Well, I was just thinking, because I'm doing the math in my head and I'm thinking without much computational horsepower could you actually corner global markets and make huge money? It's one of those thought experiment type scale projects that I never thought anybody would actually be audacious enough to attempt, or ask to attempt, as it were. We've got one more. It says in proper cross examination by Crown about the attractiveness of a complainant in a sexual assault case and unbalanced scrutiny of evidence by a judge. And the result Three minutes.
Michael Mulligan:Yeah, I think I can do it in three minutes.
Michael Mulligan:This is the case of a Duncan and it's a sexual assault case where the Crown decided to cross examine the accused who testified and testified that he did not sexually assault the complainant, and the Crown embarked on a line of cross examination about whether the accused thought the woman was attractive and whether she was pretty or whether she was I don't know if you use sexy, but was cross examining about that and the accused was left sort of stumbling over. You know, I don't think that's not appropriate and the judge relied in part on the accused not saying yes, this person was attractive when the judge thought the person was attractive. And so the judge and one of the reasons for convicting the accused was the judge concluded that they thought they, the judge thought the complainant was attractive and found that the accused not acknowledging that she was attractive was an indication that he wasn't telling the truth when he said that he didn't sexually assault her Very interesting reasoning that has been considered in other cases. The Ontario court of appeal concluded a number of years ago that it was not appropriate for Crown to be asking questions but whether the accused thought somebody was pretty or attractive or sexually attractive and that that's not relevant consideration to whether somebody committed a criminal act of sexual assault. And similarly, the DC court of appeal has cited that case and also concluded that it's not appropriate to, for example, cross, get across, examine somebody in a sexual assault case and accused about their sexual orientation. Um, and the court of court of appeal in British Columbia approving of that Ontario case thing, you it's not appropriate to be asking questions about whether you think the complainant is sexy. Um also confirmed that it's not appropriate to, for example, ask somebody whether they're um heterosexual or homosexual.
Michael Mulligan:Uh, uh, for example, in the context of an allegation of sexually assaulting a child, finding it's just not appropriate that somehow you would suggest that because somebody might uh be a particular sexual orientation is more likely they would have sexually assaulted a child. And so there's been a lot of judicial cold water poured on that line of thinking, I think quite appropriately Uh. And so here uh the judge's decision to uh first of all allow the crown to engage in that line of cross examination and then, in fact, relying upon it, um, in deciding not to accept the accused's denial that he committed the offense, uh was found on appeal to be inappropriate Um and not a sound basis to uh, have rejected uh his evidence, and also not appropriate that the judge would be using their own formulation about whether they thought the person was, um, attractive or pretty, uh, and so all of that led to the result that the conviction has been overturned, uh, and there's been a new trial order, um.
Adam Stirling:Michael Mulligan, with Mulligan defense lawyers legally speak.