Bally Haly 2026 Case, Newfoundland & Labrador
Recent Assessment Decision
Submitted by: Michael Crosbie K.C., McInnes Cooper, St. John’s NL
On December 18, 2025, Justice Alexander MacDonald filed a General Division Decision concerning Assessment Appeals relating to the (new) Bally Haly Golf Course.
Justice MacDonald overturned the Commissioner’s Rulings and sent the assessments back to the Commissioner to be reconsidered in light of the Court’s comments.
These assessments were the subject of comments during the Cross Canada Legal Update in October 2024 at the 58th CPTA National Workshop. ( Click here to download a copy of the presentation )
This Decision is: Bally Haly Golf Course and Country Club Limited v Torbay (Town), 2025 NLSC 183. The Golf Course actually is located in 3 municipalities: Torbay, Logy Bay-Middle Cove–Outer Cove (“LB-MC-OC”) and St. John’s. The Decision only concerns the 2024 tax year Assessments in Torbay and LB-MC-OC.
The Decision will be of interest to assessment law practitioners because it dealt with the Assessor’s and Commissioner’s use of a Land Swap Deed and of a Mortgage in order to determine the assessed value of a Golf Course.
The basic situation was that Bally Haly Golf and Country Club closed its golf course (Old Bally Haly) and acquired the Clovelly Golf Course (which it renamed as [new] Bally Hally) whose owner in return acquired the Old Bally Haly Golf Course for land development purposes.The March 2023 Deed to Bally Haly from Clovelly stated a purchase price of $9,365,081 and the March 2023 Deed to Clovelly from Bally Haly stated a purchase price of $4,750,000 (net effect of Bally Haly paying $4,615,0810). Bally Haly also registered a Notice of Mortgage in the amount of $7,500,000 concerning the property purchased from Clovelly.
Unlike previous years, the Assessment Agency did not apply an income approach in order to determine the 2024 assessed value of $5,400,000, which 2024 Assessment more than doubled the previous years’ assessment of the (new) Bally Haly Golf course (Old Clovelly).
Bally Haly appealed its assessments using evidence based upon an income approach and a comparative sales approach performed by Jerry Kirkland AACI of Kirkland Balsam, which value approaches indicated an “Actual Value” of $2,100,000.
With regard to the Land Swap Deed, Justice MacDonald noted at paragraph 64:
Kirkland … told the Commissioner that the consideration of $9,365,081 contained in the Deed was not a reliable indicator of actual value and said that the sale was not competitive and representative of an open market. He said there were “special circumstances” referred to in Murphy, Re [(1994) Nfld. & P.E.I.R 243 (NLTD)] surrounding the sale. These were:
(a) Bally Haly was not motivated by economics. It was motivated to replace its course to satisfy the needs of its membership. Bally Haly’s old course was adversely affected by neighborhood developments;
(b) Bally Haly was subject to “undue stimulus” because it needed a new location for its golf operations;
(c) Both properties were not on the open market; and
(d) The transaction was a swap of properties.
Justice MacDonald further noted at paragraphs 71, 74, 77 and 81:
71 The Commissioner is entitled to use the Deed sales price. Bally Haly cannot appeal this choice. However, he must consider whether this sale was a “free” one with no special circumstances that would suggest the sale price was not the product of ordinary market forces.
74 I do not review the Commissioner’s reasons on a correctness standard. I do not need to agree with the reasons. But I need to know why the Commissioner decided that there were no special circumstances. Are these words sufficiently transparent, justifiable, and intelligible for the parties to understand whether or how the Commissioner decided the issue?
77 Did the Commissioner conclude that these are not special circumstances that would suggest that the sale price was not the product of ordinary market forces? I do not know because he did not say so.
81 Therefore, the Commissioner made a legal error when he did not give adequate reasons on this issue. I refer the matter back to him with advice that I provide later in this decision.
With regard to the Mortgage, Justice MacDonald held:
83 The Commissioner made this decision without referring to Bally Haly’s other loan documents. There is no evidence he or the Assessor even saw them. I do not know whether the Mortgage is a conventional real estate mortgage or a collateral one securing all Bally Haly’s debt.
84 Real property mortgages are often “collateral” in that they secure a borrower’s entire debt, not just the value of the land. A lender will then often secure remaining non-real property assets by personal property security or otherwise.
85 Thus, there may be no correlation between the value of the property and the face value of a collateral mortgage.
86 Accordingly, the Commissioner made a palpable and overriding error when he concluded the Mortgage was a reliable indicator of the course value when he did not consider or refer to evidence of the underlying banking arrangements.
Consequently, the problem with the Commissioner’s Decisions and the 2024 Assessments was that the Assessment Agency responded to Bally Haly’s evidence based upon income and comparative sales approaches by providing Land Swap Deed and Mortgage evidence, both of which pieces of evidence in law were defective. The Land Swap Deed was defective as evidence because of the appraisal legal principle that a sale must occur in an open and competitive market situation. The Mortgage was defective as evidence because no evidence as to the terms of the Mortgage were provided.
Though Justice MacDonald did not mention the case, the case Beta Management Inc. v Edmonton (City), 2017 ABQB 571 at paragraph 119 provides an excellent explanation of the legal requirement that in order for a sale to be usable as value evidence the sale has to occur in an open market situation where the sale price is tested through competition.