Mohammed Ikram Estate v. Municipality of Port Hope, 2015 CanLII 40071

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

July 8, 2015

FILE NO.:

WR 132437

Assessed Person(s):

Mohammed Ikram Estate

Appellant(s):

Mohammed Ikram Esate

Respondent(s):

Municipality of Port Hope

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 06

Property Location(s):

4311 Mastwoods Road

Municipality(ies):

Municipality of Port Hope

Roll Number(s):

1423-223-030-14810-0000

Appeal Number(s):

3043461, 3060846, 3060844, 3060839, 3060838 and 3060837

Taxation Year(s):

2008, 2009, 2010, 2011, 2012 and 2014

Hearing Event No.

584532

Legislative Authority:

Sections 357.(7) and 357.(8) of the Municipal Act, S. O. 2001, c. 25, as amended

Heard:

May 13, 2015 in Port Hope, Ontario

APPEARANCES:

Parties

Counsel+/Representative

Mohammed Ikram Estate

Fatima Zelina, Sadat Ara, Awar Mohammed and Imtiaz Mirza

MPAC

Peter Moran

Municipality of Port Hope

David Baxtern and Debbie Sherwood

MEMORANDUM OF ORAL DECISION DELIVERED BY TERRY DENISON ON MAY 13, 2015

REASONS FOR DECISION

1The Board had before it applications under s. 357 of the Municipal Act (the “Act”) that were made seeking to reduce the taxes for 4311 Mastwoods Road, Port Hope with respect to the taxation years 2008, 2009, 2011, 2012, and 2014. There was no application with respect to 2013.

2Mohammed Ikram purchased the property in March of 2008. Prior to his becoming the owner the municipality issued a demolition permit for one of the structures on the property and the previous owner removed the structure. The change was not taken into account when the property was assessed and consequently it was taxed as though the structure was still present.

3The owner made attempts to rectify this having discussions and exchanging some correspondence with the municipality and MPAC, presumably following the Request for Reconsideration process.

4However, there were no appeals made under s. 40 of the Assessment Act for the years in question.

5Mohammed Ikram regrettably passed away on November 10, 2010 and it fell to his family to deal with the question of the correct assessment and taxation of the property. They attempted to do so by making these applications to the municipality for relief under s. 357 of the Act and upon Council’s refusal, by appealing to the Assessment Review Board (“Board”).

6At this hearing the parties acknowledged that there had been a reduction of the taxes on the property for the years between 2009 and 2014 which rectified the assessment problem related to a value reduction due to the structure demolished in 2008. This came about with MPAC’s recommendation to the municipal council when it dealt with the “applicant’s” applications under s. 357 of the Act. These changes were credited to the tax account for the property effective October 18, 2011.

7Although the changes to the actual taxes were retroactive, the municipality only made adjustments to the interest and penalties for unpaid taxes on a “going-forward” basis from October 18, 2011, the correction date. The Act and the municipality’s by-law provide for interest and penalties on unpaid taxes to be calculated using a rate of 1¼% per month. The municipality’s reason for not reducing the interest and penalties retroactively is based on a clear reading of s. 345 of the Act, in particular, s. 7 and 9.1 which read as follows:

(7) Cancellation. – A local municipality shall cancel or refund late payment charges impose under subsections (2) and (3) on overcharges of taxes arising as a result of errors or changes set out in clause (6)(a) or (b) if the overcharges were not paid when they were due and are no longer owed.

(9.1) Late Payment Charges. - Late payment charges shall be cancelled or refunded under subsection (7) if they were imposed with respect to a period after the later of,

(a) the day the error is corrected or change is made; and

(b) January 1, 2003.

8This would seem to create an appearance of unfairness where interest and penalties have been charged on taxes which were too high and which were subsequently corrected.

9Before the municipal council and at this hearing it was clear that no application conforming to the statutory requirements and timing had been made with respect to the 2008 taxation year. That is, no application to the treasurer was made before February 28, 2009. That being so, this Board has no jurisdiction to deal with an appeal for the 2008 taxation year and therefore that appeal is dismissed.

10In dealing with the appeals for the remaining years from 2009 through 2014 the Board notes that the parties have agreed concerning the correct amount of taxes and consequently the Board finds those applications to have no factual basis to support a further reduction of taxes.

11The remaining issue is whether or not the appellants must pay interest and penalties based on the original amount of taxes before the correction date, as a strict reading of the statue would suggest.

12The Board notes that municipalities are authorized in s. 345 of the Act to pass by-laws to impose late payment charges for the non-payment of taxes. Section 345(2) provides that the penalty charges for non-payment of taxes is a percentage “not to exceed 1¼% of the taxes due and unpaid” and s. 345(3) provides for an interest charge “not to exceed 1¼% each month of the amount of taxes due and unpaid.” The words “not to exceed” can only be interpreted to mean that a council could choose to impose a lesser charge if it deemed it to be appropriate to do so.

13In deciding matters under s. 357 of the Act, the Board, after hearing the appeal may make any decision that council could have made, including a reduction of the penalty and interest charges.

14In considering the circumstances of these applications and the difficulties encountered due to the owner’s death, Council could have looked at waiving or reducing the late payment charges prior to the correction date, albeit by amending its by-law for this specific case. The Board considers that under the circumstances of this case, it would be fair and reasonable to calculate the late charges prior to the correction date using a percentage of ¾% on the unpaid amount and each month.

15The parties at the hearing were able to agree on the calculation of the late charges based on this decision of the Board at the conclusion of the hearing.