The Township of Spallumcheen will have to pay a resident more than $350,000 after selling his property over unpaid taxes, without his knowledge.
Anthony Brent Morgan sued the township after it sold his nine acres of land in 2017, according to a B.C. Supreme Court decision rendered May 6.
Morgan, 57, had purchased the land near Armstrong on Round Lake Road in 2011, with plans to build a house and a workshop for his carpentry business on it. However, he ran into difficulty paying the property taxes and fell into arrears. By September 2017 he owed about $6,700 in unpaid taxes, according to the decision.
On Sept. 24, 2017, the township sold Morgan’s property in a tax sale for $11,300.
At the time of the sale, Morgan owed about $7,680 in taxes and penalties, and the property was valued at $159,000.
Under the Local Government Act, municipalities can sell parcels of land at an annual tax sale if the owner’s unpaid taxes have reached the point of delinquency.
However, the municipality is required to give written notice of the sale to the owner, as well as the end date for the redemption period.
Morgan says he was not notified that his property had been put up for a tax sale and then sold, and was left unaware until after the redemption period had ended, meaning there was no way to renege on the sale.
According to the agreed statement of facts, the township tried to extend the redemption period but was then faced with a lawsuit on the part of the buyer of the land. The township capitulated and the sale went through in February 2019, about six weeks before Morgan took legal action.
The township conceded that it had not followed the correct proceedings but disputed the amount of damages Morgan should receive, arguing he should be compensated for the land’s value on Sept 24, 2018, the day Morgan officially lost the property.
Morgan countered by arguing he should receive damages based on the land’s current market value — about $190,000 more than what the township was seeking.
Justice G.P. Weatherill ultimately sided with Morgan, ordering the township to pay $352,316.28.
Weatherill said the failure to notify the plaintiff about the sale should bring with it “significant consequences.”
“In my view, the exercise of the legislative power to sell property at a tax sale for pennies on the dollar (as occurred here) brings with it a duty on the local government to, among other things, ensure the property owner and charge holder know about the sale and are given ample opportunity (the legislation provides for one year) to redeem the property,” reads Weatherill’s statement.
“It is only after the property owner/charge holder have been duly notified of the tax sale and have been given the opportunity to redeem the sale and have failed to do so, that the sale is allowed to be finalized.”
Spallumcheen CAO Doug Allin said the township respects the Supreme Court’s decision and is taking steps to ensure a similar mistake doesn’t happen again.
“Since 2017, the Council of the Township of Spallumcheen has undertaken significant review of our processes and has instituted substantial changes which has included changes to administration and changes in process, ensuring legislative requirements are met,” Allin said.
An apology was issued on behalf of township administration for “this regrettable situation.”