Hooper v. Municipal Property Assessment Corporation, 2015 CanLII 32539

Assessment Review Board

Issue Date: June 5, 2015 File No.: WR 129451

Assessed Person(s): Helen Mary Hooper and Ross Leeman Hooper Appellant(s): Ross Leeman Hooper Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 25 Respondent(s): Municipality of Grey Highlands

Property Location(s): 213 Plantts Point Road Municipality(ies): Municipality of Grey Highlands Roll Number(s): 4208-180-009-30300-0000 Appeal Number(s): 2984795, 3027921 and 3091780 (deemed 2015) Taxation Year(s): 2013, 2014 (and deemed 2015) Hearing Event No.: 570162

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: November 21, 2014 in Thornbury, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Helen Mary Hooper and Ross Leeman Hooper	Robert Baranowski
MPAC	Tony Pileggi
Municipality of Grey Highlands	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a seasonal / recreational dwelling located on the northeast side of Lake Eugenia, a man-made lake located approximately seven kilometres northeast of the village of Flesherton. Lake Eugenia was created as part of a hydro-electric power project in 1915 and is the only lake in Grey Highlands that permits the use of motorized watercraft.

2The property is serviced by a year-round municipal gravel road and is comprised of a two-storey single family dwelling with a walkout basement, a detached two car garage and a private dock. The dwelling was constructed in 2001 and consists of 2,368 square feet ("sq. ft.") of living area with 1,008 sq. ft. of finished basement on a site area of 20,183 sq. ft. The property has a water frontage of 139 feet.

3MPAC has returned an assessment of $783,000 for the 2013 and 2014 taxation years. The Appellant believes this value is too high and submits that the correct current value is $646,000 and that the assessment should be reduced accordingly. The parties agreed that the sole purpose of the hearing was the determination of current value.

4The Board must determine two things in these appeals. Firstly, from the evidence submitted at the hearing, the Board must decide the current value of the subject property. Secondly, the Board must determine, having reference to the assessments of similar properties in the vicinity, if the assessment of the subject property should be reduced for the purpose of equity.

DECISION

5The Board finds that the current value of the property at 213 Plantts Point Road is $783,000.

6The Board also finds that, to make the assessment equitable with that of similar lands in the vicinity, it is necessary to reduce the assessment below the current value as determined above from $783,000 to $689,000.

7Therefore, the assessment of the subject property is reduced, from $783,000 to $689,000 for the 2013, 2014 and deemed 2015 taxation years.

REASONS FOR DECISION

The Legislation

8In making its determination of the issues of these appeals, the Board must consider s. 1, 19.(1), 40.(19), 44.(3) and 45 of the Assessment Act ("Act")

9Section 1 of the Act states:

"current value" means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm's length by a willing seller to a willing buyer.

10Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

11Section 40.(19) of the Act states:

40.(19) Board to make determination- After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

12Section 44.(3) of the Act states:

44.(3) Same, 2009 and subsequent years. – For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

13Section 45 of the Act states:

Powers and functions of Assessment Review Board – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purpose of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

PRELIMINARY MATTERS

14At the outset of the hearing, Mr. Pileggi advised that he wished to have Brent Williams, a valuation review specialist / property valuation analyst with MPAC, qualified as an expert witness in the area of valuation of waterfront seasonal / recreational properties.

15Mr. Baranowski, representing the Appellant, objected to Mr. Pileggi's motion on two counts:

• He was unaware that the motion would proceed at the hearing and was unprepared to argue the motion as a result; and
• Having Mr. Williams considered to be an expert witness would place his client's case at a disadvantage in the proceeding

16Mr. Pileggi responded by indicating that the matter of the motion was in fact discussed with Mr. Baranowski prior to the hearing during a telephone call held two days before, suggesting that it was disingenuous of Mr. Baranowski to suggest he was surprised by the motion.

17In considering the motion, the Board polled the parties with respect to the options available:

• Carrying out the process of examination and cross examination of Mr. Williams with respect to his qualifications;
• Dismissing the motion owing to the lateness of its notice; or
• Adjourning the matter to a later date when both parties might be better prepared to argue the motion.

18The parties were in agreement that an adjournment was not in their joint best interests owing to the distance travelled to Thornbury in inclement, early winter weather, leaving the Board with the choice between hearing the motion or dismissing it owing to the short notice. Given that parties, by the Board's Rules of Practice and Procedure ("Rule"), are permitted to make oral motions at the hearing and the fact that it was discussed by the parties prior to the hearing, the Board found that on the balance of the interests involved, and the narrow focus of the issue, that being current value, the parties were best served by permitting the examination of Mr. Williams for the purpose of determining his qualifications as an expert witness.

19Mr. Pileggi took Mr. Williams through his curriculum vitae, with special emphasis on his experience in the valuation of special property types including properties similar to the subject property. Mr. Baranowski's cross examination focused on Mr. Williams' specific expertise in the areas of data management and statistics, to which Mr. Williams responded that data management and statistical analysis forms part of his expertise in the valuation of waterfront seasonal / recreation dwellings.

20Mr. Pileggi submitted that Mr. Williams's responses indicated that he is an expert in the valuation of waterfront seasonal / recreational properties and that he should be qualified accordingly.

21Mr. Baranowski cited Rule 63 of the Board's Rules, suggesting that the oral motion made by MPAC does not comply as the need for it did not arise from the events of the hearing. Despite his earlier submission that he was not prepared to argue the motion, Mr. Baranowski further submitted three authorities that he suggested ought to guide the Board in its decision on the motion to qualify Mr. Williams as an expert.

22The first is a print out of the Board's Rules 17 and 48, which lay out the duty of an expert witness and the Duty of Expert excerpt from the Rules of Civil Procedure. Secondly, Mr. Baranowski cites Taylor v Municipal Property Assessment Corp., Region No. 15 [2009] (ARB WR 76515) where the panel did not accept the assessor as an expert witness. There is no specific reason given for that panel's decision other than Mr. Baranowski's objection to such a qualification. The Board finds this citation to be of no value with respect to the disposition of the motion at hand.

23Lastly, Mr. Baranowski cites Jones v. Municipal Property Assessment Corp., [2009] O.A.R.B.D. No. 118 Region No. 15 (ARB WR 76665) In that case the panel did not accept the Assessor as an expert witness because the nature of the issues and evidence was normal for a conventional residential hearing and that a level of technical expertise beyond that which the Board possesses to determine the matter on its merits is not required. In addition the panel found that in order to maintain fairness or 'level playing field', the qualification of an expert witness would compromise the other party's case, with the requirement to weigh an expert's opinion over that of an appellant without such an expert. The panel in Jones also found that there would be a perception of bias on the part of the expert owing to the fact that he was an employee of MPAC and could be perceived as not being neutral to that MPAC's position.

24In this case the nature of the issues in the Board's view, go beyond a 'conventional residential hearing' in that the subject property is relatively unique in its setting and it is conceivable that a person with expertise in valuation of this type of property would go beyond that which is possessed by the Board in order to determine the matter on its merits.

25With respect to fairness and a level playing field, the Board finds that the issue is more one of preparedness. Mr. Baranowski was aware of Mr. Williams' valuation report well in advance, but made no submission with respect to its contents being prejudicial to his case if its contents were from an 'expert' as opposed to an 'assessor'.

26With respect to the perception of bias in 'Jones', the Board finds that in this case, there is an equal perception as Mr. Pileggi pointed out, that as advocate and witness, Mr. Baranowski was in the same position with respect to his client's case. Mr. Baranowski's response, as it was in Jones, is that his evidence would purposely avoid expressions of opinion with respect to valuation. The Board finds that this potential disparity in the cases, is not one of bias, but of preparation. Just because one party does not intend to bring opinion evidence to a hearing, that is no reason to discount the opinion evidence of the other party, whether it is given by an 'expert witness' or not.

27On the balance of the submissions of the parties on the motion, the Board finds that Mr. Williams is an expert witness with respect to the valuation of special properties, including waterfront seasonal / recreational properties and is qualified as such.

28Mr. Baranowski immediately moved to adjourn the proceeding on the grounds that the Appellant's case is prejudiced owing to Mr. Williams' qualification. In considering Mr. Baranowski's motion, the Board considers the Board's Rule 3 in addition to the considerations preceding. Rule 3 states that the rules are to be liberally interpreted to insure the just, most expeditious and least expensive determination of every proceeding on its own merits. The Board finds that, on balance, the concept of natural justice is not impugned in this case by proceeding, and in the interest of expeditiousness the motion to adjourn is dismissed.

ANALYSIS

MPAC'S Evidence

29Mr. Williams testified that, he applied the direct comparison approach to value. This approach compares a selection of sales of comparable properties with sale dates in proximity to the valuation date of January 1, 2012, to the subject property. Adjustments are made for differences in the comparable properties to arrive at a range of value that could be applied to the subject property. He further testified that the sale values were 'time adjusted' so that they can be compared to the subject property as though the sales occurred on the valuation date. The sale values are adjusted by applying a Time Adjustment Factor (TAF) that is derived from the sales of 480 residential properties in the area that occurred between January 2009 and December 2012. Mr. Williams testifies that the trend derived from these sales indicates a TAF for each month within the range of sale dates. This TAF is then applied to the selected comparable properties to 'equate' the sale value as though it occurred on January 1, 2012.

30Mr. Williams used six sales that sold between April 2008 and June 2012. The comparative data for the subject property and each of the comparable properties is summarized in Table A.

TABLE A

	Subject Property	Sale A	Sale B	Sale C	Sale D	Sale E	Sale F
Sale Value ($)	N/A	750,000	820,000	685,000	780,000	1,190,000	690,000
Sale Date	N/A	Oct./ 10	Apr./ 08	Nov./12	June /12	March /12	Oct./ 09
TAS Value ($)	N/A	762,641	N/A	676,876	775,127	1,186,609	711,555
Lot Size (sq. ft.)/Frontage	20,813/139	12,000/80	12,000/80	11,230/60	27,072/89	27,007/72	27,915/184
Building Area	2,368	1,845	2,178	1,84	1,976	1,965	1,695
Basement Area / Finished	1,496/1,008	1,337/798	1,579/575	1,384/1,107	2,956/1144	1,821/685	1,259/655
Quality Code	7.0	7.0	7.0	6.6	7.5	7.0	6.5
Garage	Detached	Detached	Detached
No. of Storeys	2	2	2	1	1	2	2

31Mr. Williams believes that Sale E is superior in value to the subject property and testified that Sales C and F are inferior when their characteristics are compared to the subject property. Mr. Williams testified that Sales A, B and D are similar to the subject property in many respects, and are located on similar / comparable waterfronts on Lake Eugenia, even though their respective waterfronts are smaller than the subject property which he considers would reduce the value, if all other characteristics were equal.

32When Mr. Williams accounts for the differences between the comparable properties and the subject property he estimates its value between $775,000 and $800,000. He concludes that his analysis demonstrates the returned value of $783,000 is therefore reasonable and correct.

33Mr. Pileggi concluded MPAC's case by indicating he would not advance any evidence with respect to equity as prescribed by s. 44.(3)(b) and would leave it to the Board to make this determination.

Appellant's Evidence

34Mr. Baranowski presented a case that focused on equity. He submitted no additional sales beyond those in MPAC's evidence and uses those comparable sales to advance his argument. He submitted that when the sale values of the six properties in MPAC's valuation study are compared with their corresponding 2012 assessments, the resulting ASR's are as follows:

Comparable Sale	TAS ASR	NON TAS ASR
A	.88	.89
B	.67	.82
C	.78	.77
D	.93	.92
E	.59	.59
F	.95	.97
Median:	0.84	0.915

35In addition, Mr. Baranowski submitted that, in order for the assessment returned to comply with the Act, it should be reduced from $783,000 to $748,000, citing s.32 which provides for the corrections of errors in assessment after it has been returned. His reasoning for this reduction comes from Exhibit 4, the current Property Assessment Details ("PAD") for the subject property, which indicates the value returned by MPAC. Mr. Baranowski argues that for the 2009, 2010 and 2011 taxation year, the Board reduced the current value from $572,000 to $537,000, indicating a reduction of $35,000. He submits that this same reduction should apply for the 2013 and 2014 taxation years as it represents a binding decision of the Board.

36By applying the two median ASRs in his submission to the adjusted returned value of $748,000, Mr. Baranowski submits that value, reduced for equity, should be between $628,320 and $684,420. He believes that using six properties is sufficient to make a determination of equity, while acknowledging that normally, MPAC would use at least thirty sales to make the same determination. He added that the properties used are all very similar to the subject property and therefore meet the requirements of 'similar' and 'vicinity' in the Act.

37Mr. Baranowski submits that where the parties are not able to establish a reasonable current value through a direct comparison approach, the assessment values of comparable properties can be used to make that determination. For this purpose, Mr. Baranowski suggests that the average assessment of the six comparable properties in evidence, being $662,000 is an alternative current value to be considered by the Board.

The Board's Analysis

Current Value

38The Board must determine the current value of the subject property by using the evidence submitted at the hearing. MPAC provides six comparable properties by which they determine the value of $783,000. In order for properties to be considered comparable for this purpose, they need not be identical; they only need to have sufficient similarity so that reasonable adjustments can be made between them and the subject property for the purpose of determining its current value.

39Two of MPAC's comparable properties are single storey dwellings and the Board disregards these in as much as a single storey dwelling is not suitable comparable to the two storey subject dwelling. In addition, the Board disregards Sale B, which sold in 2008, as being too far removed from the valuation date to be reliable as an indicator of the subject property's current value.

40The remaining three comparable properties reflect a range of $711,555 to $1,186,609 when their TAS are used and MPAC suggests the current value of the subject property lies within this range. Sale A is a smaller structure with a smaller waterfront and is 16 years newer that the subject property. MPAC believes Sale A to be relatively comparable to the subject property. Sale E also has a smaller dwelling, with a smaller waterfront, a larger lot area and was built in 2003, two years after the subject dwelling. MPAC considers Sale E to be superior to the subject property. Sale F was constructed in 1989, 12 years before the subject dwelling. It has a smaller living area, no detached garage but has a larger waterfront and lot area measurement, with a quality code that is lower than the subject property. MPAC considers Sale F to be inferior to the subject property.

41The Board notes that the returned value of the subject property lies above the TAS value of Sale F, is relatively comparable to Sale A and is below the TAS value of Sale E; all consistent with MPAC's findings. Mr. Baranowski did not refute the findings of MPAC in this regard.

42The Board disregards Mr. Baranowski's submission of a correction to the returned value, for a previously held decision of the Board. The decision he cites relates to the 2008 valuation date, and is not relevant in this case. He did not produce any documentary evidence to suggest what the nature of this correction was, so the Board is not able to consider whether or not such an adjustment is warranted for the 2012 valuation date.

43The Board finds that the best evidence of current value is that of MPAC. Mr. Williams took an established approach to determining the current value and the Board finds his conclusion to be reasonable. The Board also finds this approach to be superior to the suggestion by Mr. Baranowski to simply average the assessments of the six properties in evidence. This approach does not allow for any adjustments for differences in characteristics between the subject property and the comparable properties.

Equity

44The only evidence before the Board with respect to equity is that of Mr. Baranowski. Using the same comparable properties as those used in MPAC's study, he suggests that the median ASR can be used. For the same reason cited above, the Board disregards the sale of comparable B, which sold 44 months from the valuation date. The Board finds that the best sales values to use for this purpose are the TAS values as these values reflect a sale on the valuation date. Without a time adjustment, Sale B is neither equivalent nor as reliable for this purpose as the remaining five properties in the sample.

45All five remaining sales are waterfront properties in the vicinity of the subject property. They also represent the only evidence before the Board on the question of equity. The TAS ASRs for the five sales range from .59 for Sale E to .93 for sale D, with a median of .88 which applies to Sale A. The Board finds that this median ASR of .88 is the best indicator of equitable assessment available, indicating that similar properties in the vicinity are generally assessed at a value below their time adjusted sale value. Therefore, the Board finds that to make the assessment equitable with that of similar lands in the vicinity, it is necessary to reduce the assessment below the current value as determined above from $783,000 to $689,000.

DECISION

46The Board finds that the current value of the property at 213 Plantts Point Road is $783,000.

The Board also finds that, to make the assessment equitable with that of similar lands in the vicinity, it is necessary to reduce the assessment below the current value as determined above from $783,000 to $689,000.

47Therefore, the assessment of the subject property is reduced, from $783,000 to $689,000 for the 2013, 2014 and deemed 2015 taxation years.

2015 DEEMED APPEAL

48An appeal for the 2014 taxation year is presently before the Board. Section 40.(26) provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2014 appeal before March 31, 2015. For that reason, this decision also applies to the 2015 taxation year.

49Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.