Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 10, 2015

FILE NO.: DM 2015M2

Moving Party(ies): City of Brockville

Respondent(s): Municipal Property Assessment Corporation, (“MPAC”), Region No. 2

Respondent(s): Elizabeth-Kitley Township

Property Location(s): 1807 County Road 2

Municipality(ies): Elizabeth-Kitley Township

Roll Number(s): 0801-000-010-13900-0000

Appeal Number(s): N/A

Taxation Year(s): 2003 – 2012

Hearing Event No.: 583242

Legislative Authority: Section 40.1 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: April 17, 2015 in Brockville, Ontario

APPEARANCES:

Parties	Counsel
City of Brockville	Charles Loopstra
MPAC	Karey Lunau

DISPOSITION OF THE BOARD DELIVERED BY S. McANSH

1This is a motion by the City of Brockville for an order, pursuant to s. 40.1 of the Assessment Act (“Act”), extending the time for appealing the 2003 through 2012 assessments of the wastewater treatment facility it owns in Elizabeth-Kitley Township [the “Property”] and requiring MPAC to be the appellant. They argue that MPAC made an error in recording the height of a building on the Property that is a “palpable error”, which provides me with the jurisdiction to make the order. They further argue that I should exercise my discretion to grant the order.

2MPAC argues that the error is not of a type contemplated in s. 40.1 as it could have been remedied with a timely appeal pursuant to other sections of the Act. Further, MPAC argues that Brockville has not proven the error for the taxation years in question. MPAC also argues that weighing of the prejudice to the parties favours refusing the order, as the Township would be greatly prejudiced if the appeals are allowed. Finally, MPAC argues that the doctrine of laches prohibits Brockville from obtaining relief.

DISPOSITION OF MOTION

3For the reasons set out below, Brockville’s motion is denied.

REASONS FOR DISPOSITION OF MOTION

4Brockville, as a public body, makes payments in lieu of taxes for non-exempt property it owns in another jurisdiction based on the assessed value of that property. The Property is owned by Brockville but located in the Township. Thus, Brockville is required to make payments to both the Township and the United Counties of Leeds and Grenville [the “County”], as the upper tier municipality to the Township. By agreement, dated October 2000, the Township refunded all payments related to the Property from 2002 until that agreement was terminated in 2009. The payments in lieu of taxes have not been made by Brockville to the Township since that time as a new arrangement is being negotiated between those parties. The Township indicates that $450,723 is payable for the 2010 through 2013 time period.

5The Property was reassessed at each valuation day in the time period relevant to this motion. Those assessments were as follows:

2003 – $4,726,000; 2005 – $7,029,000; 2008 – $7,105,000 2012 – $7,500,000

Brockville also notes that the 2002 assessment was $1,271,000 and emphasizes that the 2003 assessment constitutes a 272% increase from this amount. They note that there were no physical changes to the Property in that time period.

6MPAC issued an Amended Property Assessment Notice to Brockville in July of 2013 that more than halved the current value assessment of the Property for the 2012 valuation day from $7,500,000 to $3,472,000. When Brockville’s solicitor made inquiries as to the cause of the reduction they were informed that the height of one building at the Property had been incorrectly entered at 923 feet in MPACs costing system, rather than the actual 12 foot height of the building. The communication from MPAC on that error is limited to the 2012 current value assessment. Brockville brings this motion as it believes that the error in height is the only explanation for the dramatic increase in current value between 2002 and 2003.

7The relief in s. 40.1 of the Act is an extraordinary remedy to be used sparingly, or the balance of the Act will be undermined. It should only be applied “in the clearest of circumstances,” Scott v. Municipal Property Assessment Corp., Region No. 15 (2015), O.A.R.B. D. No. 54 DM 2014M6 [“Scott”] at para. 34.

8This Board has consistently held that a “palpable error” is one that is “plain and obvious,” Whitby (Town) v. Municipal Property Assessment Corp., Region No. 13, [2004] O.A.R.B.D. No. 218 [“Whitby”]; 1331679 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 15 (2008), 60 O.M.B.R. 281 at para. 13; and Municipal Property Assessment Corp., Region No. 15 v. Morcoccia, [2011] O.A.R.B.D. No. 142. This Board has also been consistent in holding that errors need not be on the face of the roll to be “palpable errors in the assessment roll.” The Board is permitted to look at factual errors behind the roll, Whitby at p. 108; 584952 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 9 (2007), 58 O.M.B.R. 106 at p. 363; and Cambridge Taylor Holdings Inc. v. Municipal Property Assessment Corp., Region No. 21 (2013), O. A.. R. B. D. No. 85 DM 118187 [“Cambridge Taylor”] at para. 52.

9Section 40.1 is unique in the Act as the only error correction mechanism that lacks a limitation period. All of the other error correction provisions in the Act have strictly enforced limitation periods that prohibit late appeals, see s. 32, 33, 34, 39.1 and 40. Finality in assessments is also reflected in the legislature’s statement in s. 41 that the roll is binding despite any errors.

10MPAC argues that the scheme of the Act demonstrates that errors are to be expected and ought to be corrected in a timely manner. MPAC notes that the Divisional Court was clear in Toronto (City) v. Wolf (2008), 2008 CanLII 39430 (ON SCDC), 241 OAC 41 at para. 20 that “there are competing purposes inherent in the scheme of the Act… there must be mechanisms to correct errors in the assessment roll. At the same time… there must be some finality in the system in order to achieve a stable and reliable tax base.” MPAC urges me to interpret and apply s. 40.1 narrowly in order to promote the balance between correctness and finality inherent in the scheme of the Act.

11Brockville notes that previous decisions of this Board have stated that the overriding goal of the Act is correctness, see 584952 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 9 (2008), 2008 CanLII 47726 (ON SCDC), 241 O.A.C. 118 (Div. Crt.) at para. 24 and Burnac Corp. v. Municipal Property Assessment Corp., Region No. 9, [2013] O.A.R.B.D. No. 169 at para. 30. Brockville argues that the broad discretion in s. 40.1 ought to be exercised in a way that ensures a correct tax roll.

12I agree with MPAC that there are competing purposes in the scheme of the Act: correctness and finality. While s. 40.1 is clearly a broad, discretionary, remedial provision, it must be interpreted and applied with the legislative goal of finality in mind. This requires, at a minimum, that there be clear and cogent evidence of a palpable error. MPAC argues that such an interpretation also requires that s. 40.1 only be available for errors that are not valuation errors, which can be remedied through the more usual sections of the Act. MPAC relies on Scott, where the Board denied relief pursuant to s. 40.1 and held, at para. 41, that errors in lot size and building size are “valuation issues, to be dealt with by RFRs and subsequently appeal to the Board.” MPAC argues that the type of error here is similarly a valuation error. That error could have been corrected by Brockville through the regular processes in the Act.

13Brockville argues that the magnitude of the error here, a building recorded as 77 times taller than its actual height, distinguished this matter from Scott, which concerned minor error in lot and garage size. Brockville further argues that it only became aware of error when notified by MPAC in 2013. It did not make inquiries when the assessed value of the Property increased by over 250% in 2003 as it did not know there was an error.

14While I agree with MPAC that s. 40.1 should be narrowly construed, I do not agree that it should not be exercised when the error in question is a valuation error. The legislature specifically contemplated valuation errors when it outlined different remedies depending on if the error impacts “assessed values or classification of land,” as those will primarily be valuation issues. A proper narrowing of the broad discretion in s. 40.1 is to require clear evidence and carefully consider the prejudice of any error correction.

15Brockville’s evidence concerning the error is the affidavit of David Dick, Treasurer for the City, who provided me with the assessed values of the Property, the amended property assessment notice sent in 2013, and a series of emails between Brockville and MPAC. This evidence indicates that there was a significant error in the height of the building on the Property for the 2012 valuation day, which was corrected. The amended property assessment notice provides a reduced value for the 2008 valuation day for phase-in purposes, which Brockville also relies upon. There is no evidence of a similar error for any other valuation days. Mr. Dick states that he believes the error commenced in 2003 because the assessed value greatly increased that year with no physical changes to the Property.

16MPAC argues that the 2008 current value shown on the amended property assessment notice is an imputed value for the purpose of calculating phase in, as required by the regulations. MPAC denies that the amount shown in the phase in section is an admission of the error for the 2008 valuation day and notes that the emails only reference the error for the 2012 valuation day.

17I accept MPAC’s position that the phase in amount on the 2013 amended property assessment notice cannot be construed as evidence of the error for the 2008 valuation day. The emails from MPAC only admit the error for the 2012 valuation day, which has been corrected. Brockville, as the moving party, bears the onus of demonstrating a “palpable error” and has failed to do so. Mr. Dick’s belief is not plain and obvious evidence of an error in the roll. Brockville had the ability to gather information which may have substantiated their allegations. I cannot use the extraordinary remedy in s. 40.1 on the basis of Mr. Dick’s belief. Brockville’s motion fails as there is no evidence of an error for the 2003 through 2012 taxation years.

18While I have disposed of the motion due to the absence of evidence, I wish to make some comments on the issues of prejudice and laches.

19The exercise of the Board’s discretion in s. 40.1 requires a consideration of the harm that the remedy will bring to the parties before it. That is, the Board must “weigh competing interests,” 584952 (Div. Crt.) supra, at para. 22. Both parties made significant submissions on prejudice. I simply note that this motion concerned a number of public bodies, Brockville, the Township, the County and MPAC, which would all be impacted by the exercise, or not, of my discretion. I would not consider any one party to be especially prejudiced in this context and the balancing of interests would be a neutral factor in most applications involving exclusively public bodies.

20Finally, MPAC suggested that the equitable doctrine of laches would apply to an application pursuant to s. 40.1. This Board has not found laches to apply in previous decisions, see Norjohn Transfer Systems Inc. v. Municipal Property Assessment Corp., Region No. 15, [2007] O.A.R.B.D. No. 464 at para. 24; Cambridge Taylor, supra at para. 54. I conclude that this Board does not have the jurisdiction to apply the equitable doctrine of the laches.

21The Supreme Court of Canada reviewed laches in M.(K.) v. M.(H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6. Justice LaForest, for the majority, held that there are two branches of the laches doctrine, acquiescence and the creation of unreasonable circumstances, which “will suffice as a defence to a claim in equity” (emphasis added). It is my view that the statutory remedy in s. 40.1 is not an equitable remedy and this Board has no equitable jurisdiction so cannot apply laches.

22MPAC did not argue forcefully that this Board has the jurisdiction to apply laches. Rather, MPAC suggested that the Board should consider the doctrine of laches as a factor in the consideration of an exercise of discretion pursuant to s. 40.1. While this Board must consider and weigh many factors in an exercise of its discretion, we lack the jurisdiction to apply laches. Any consideration of the doctrine is only likely to confuse the exercise. The focus in a s. 40.1 application is properly on the prejudice to the parties, resulting from any delay or otherwise. This Board should not consider the application of the equitable doctrine of laches.