The judicial review launched by TimberWest (TSX:TWF.UN) focuses on property that is classified as managed forest lands in Campbell River and is also owned by Merill & Ring Canadian Properties Inc.
A bylaw passed in May 2014 required TimberWest to pay a tax rate that was about two and a half times higher than what Merill & Ring was required to pay and will jump to about five times as much by 2016.
TimberWest argued that the Local Government Act requires tax rates to be imposed on a designated area and set across a property class as a whole.
But Justice Lauri Ann Fenlon says the company's argument doesn't hold up when the sections of the act it cites are read in the context of the Community Charter and the legislature's intention.
Fenlon dismissed TimberWest's request for a judicial review, saying the Local Government Act exempts the city from having to apply the same tax rate to lands within the same class.