Scrimgeour v. Municipal Property Assessment Corporation, 2015 CanLII 40065

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 8, 2015

FILE NO.: WRC 2015M1

Appellant(s): Kim Wayne Scrimgeour and Jacqueline Esther Scrimgeour

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region No. 24

Property Location(s): 29 Lake Shore Drive

Municipality(ies): Municipality of South Huron

Roll Number(s): 4010-040-034-01700-0000

Appeal Number(s): 2953219

Taxation Year(s): 2013

Hearing Event No.: 544726, 570038 and 566314

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

Heard: October 29, 2013 in Town of Clinton, Ontario and September 12, 2014 by Telephone Conference Call

APPEARANCES:

Parties

Counsel⁺/Representative

K. W. Scrimgeour and J. E. Scrimgeour

Self-represented

MPAC

D. Mitchell⁺, T. Pileggi and J. Vance

Municipality of South Huron

No one appeared

DECISION OF THE BOARD DELIVERED BY PAUL MULDOON

1Kim Wayne Scrimgeour and Jacqueline Esther Scrimgeour (“Appellants") seek costs of $2,744.00 against MPAC.

Background

2The Appellants application for costs arises out of an appeal before the Assessment Review Board (“Board”) under s. 40 of the Assessment Act (“Act”) on the basis that the current value of the property on premises known municipally as 29 Lake Shore Drive (“Subject Property”) was incorrect for taxation year 2013.

3A hearing was held before the Board on October 29, 2013 and the Board reduced the current value of the Subject Property for taxation year 2013 from $2,338,000 to $1,895,000 as recommended by MPAC. Written reasons were issued on December 16, 2013.

4The Appellants requested a review of the decision under Rules 140-146 of the Board’s Rules of Practice and Procedure (“Rules”). In a written response to the request dated May 14, 2014, the Executive Chair of Environment and Lands Tribunal Ontario (“ELTO”), Lynda Tanaka, found that the Appellants had made a convincing and compelling case that there may have been errors in the decision and granted a motion for a review

5Prior to the hearing of the review motion, MPAC came to an agreement with the Appellants that the current value should be $1,600,000 and the parties requested that the Board cancel the December 16, 2013 decision.

6The Board heard the motion for review by teleconference call on September 12, 2014 and reserved its decision.

7The Appellants made a written request to the Board for costs, dated September 30, 2014; however, the Board informed the Appellants that this request would not be considered until the decision was issued on the review motion.

8The Board released its decision on the review motion on November 13, 2014, agreeing with the parties that the current value amount determined in the December 16, 2013 decision should be reduced from $1,895,000 to $1,600,000.

Relevant Legislation and Rules

9The Board’s rules respecting costs are set out in Rules 133 to 139 of the Board’s Rules.

10Rules 137 and 138 of the Board’s Rules state:

137. Considerations by the Board

The Board in determining whether a party has acted unreasonably, frivolously, vexatiously, or in bad faith shall consider all of the circumstances, including, without limiting the generality of the foregoing:

(a) a party failing to attend a hearing before the Board or to send a representative when properly given notice, without contacting the Board and other parties to the hearing;

(b) a party failing to comply in a timely manner with a Procedural Order, case or appeal(s) management plan or direction of the Board where the result therefrom is undue prejudice or delay to another party or parties in the proceedings before the Board;

(c) a party failing to comply in a timely manner with the disclosure or discovery requirements set out in the Board’s Rules of Practice or order or direction of the Board, including, without limiting the generality of the foregoing, the disclosure requirements respecting documents, particulars, or constitutional issues, provisions of responses to undertakings given on discovery including document disclosure; or

(d) a party knowingly presenting false or misleading evidence.

138. When Costs may be Awarded

Where the Board finds that a party has acted unreasonably, frivolously, vexatiously, or in bad faith, the Board may order that party to pay the costs of another party or parties to the proceedings subject to Rule 139 respecting the amount of costs that may be ordered.

Submissions

11The Appellants submit that MPAC acted unreasonably and in bad faith by returning an incorrect assessed value for the Subject Property that was $738,000 greater than the amount on which they ultimately settled. The Appellants further submit that it was unreasonable for MPAC not to offer a greater reduction during the Request for Reconsideration process or at the initial hearing of the appeal before the Board. The Appellants refer to evidence presented at the hearing such as an appraisal they had completed on the Subject Property which valued it at $1,405,000. The Appellants also refer to questions they raised in their request for review about the use of sales evidence from the property at 45 Lake Shore Drive. It is the Appellants’ position that as a consequence of MPAC’s failure to offer a lower assessed value for the Subject Property, they incurred unnecessary costs and inconvenience pursuing an appeal before the Board.

12MPAC submits that there is no evidence that MPAC’s conduct in these proceedings was unreasonable, frivolous, vexatious or in bad faith. MPAC explains that it changed its position concerning the current value of the Subject Property because of the outcome of other decisions of the Board. MPAC argues that an award for costs would be punishing its good behaviour (i.e. willingness to settle).

13MPAC also submits that the costs incurred by the Appellants are costs normally incurred by a party participating in an appeal before the Board and were not a consequence of any improper conduct by MPAC in the proceeding.

Discussion and Analysis

14The starting point for the determination of whether costs should be awarded is Rule 137 of the Board’s Rules. Essentially, costs are only awarded when a party acted unreasonably, frivolously, vexatiously, or in bad faith. This language emanates from s. 17.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c S.22, (the “SPPA”).

15Rule 137 provides some guidance by providing some considerations when a party acts “unreasonably, frivolously, vexatiously or in bad faith.” In this matter, none of the considerations enumerated in Rule 137 are relevant. Instead, the thrust of the Appellants’ argument is that MPAC demonstrated bad faith and acted in an unreasonable manner because the assessment on the Subject Property was ultimately reduced by $738,000. The Appellants state that the evidence they presented both at the hearing and during the Request for Reconsideration process demonstrated that the MPAC’s initial assessment was incorrect.

16The Board has stated in the past, and restates again that, generally speaking, costs are only awarded in exceptional circumstances where the threshold test in Rule 137 is met. In this matter, the Board is cognizant of the fact that there is a considerable difference between what MPAC submitted as the current value and what was finally agreed to at the end of this process. However, this “considerable difference” is only the starting point in the analysis of determining whether MPAC was unreasonable or acting bad faith such that a cost award should be issued. There must be some evidentiary basis to establish unreasonableness or bad faith by MPAC, and there is no such evidence in this matter.

17It is not sufficient for Appellants to state that their evidence outlining a lower current value than that recommended by MPAC, on its face, prior to the hearing, provides evidence of unreasonableness or bad faith. Such an argument is insufficient because the very purpose of the hearing process is to test the evidence submitted by the parties in order for the Board to assess the “best evidence.” In Ms. Tanaka’s letter to the Appellants dated May 14, 2014, she does not state why she granted a review motion except to say that “…there may be an error or errors in the decision.” Clearly, she does not make any finding that MPAC acted in bad faith or acted in an unreasonable manner. As a general principle, it is not appropriate for a party to seek costs from MPAC where a review motion was a granted on one of the grounds under Rule 145 unless it was on a basis of false or misleading evidence or MPAC’s behaviour in the motion proceedings.

18Prior or during the review motion, the parties eventually came to an agreement and that agreement resulted in a much lower assessed value than initially proposed. The Board does not have any direct evidence of how the negotiations among the parties proceeded. There is no evidence to suggest that MPAC acted in bad faith, or acted in a way that would offend the basic principles of fairness and due process.

19The test for costs outlined in Rule 137, therefore, is not met and the cost request is denied.

Order

20The Appellants’ application for costs against MPAC is dismissed.