Assessment Review Board / Commission de révision de l’évaluation foncière
ISSUE DATE: July 17, 2015
Assessed Person(s): Carol Stephenson
Appellant(s): Carol Stephenson
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09
Respondent(s): City of Toronto
Property Location(s): 2 Kingsgarden Road
Municipality(ies): City of Toronto
Roll Number(s): 1919-011-250-02400-0000
Appeal Number(s): 2996724, 3008738 (deemed 2014) and 3078053 (deemed 2015)
Taxation Year(s): 2013, (deemed 2014 and 2015)
Hearing Event No. 560019
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: June 6, 2014 in Toronto, Ontario
APPEARANCES:
Parties
Counsel+/Representative
C. Stephenson
R. Stephenson
MPAC
A. Martins
City of Toronto
No one appeared
DECISION OF THE BOARD DELIVERED BY TANYA WALKER
BACKGROUND
1The property under appeal is located at 2 Kingsgarden Road in the City of Toronto. It was built in 1938 and is a detached single-family dwelling. It has a total building area of 1,693 square feet and is situated on a site with a total area of 4,680 square feet.
SUBMISSIONS
2Andrew Martins, the representative for MPAC, contends that the assessed value of $1,048,000 for the subject property is reasonable, based on comparisons to 13 other properties in the vicinity. Mr. Martins also submitted a study of the sales prices of 250 properties in the vicinity of the subject property to demonstrate a 15.29% increase in sales prices for these properties from December 2010 to December 2012.
3Robert Stephenson, the representative for the Appellant, submits that the subject property is assessed at too high a value because it is in a state of disrepair. He submits that a fair and equitable assessed value should be, at most, $863,000. Mr. Stephenson also brought a preliminary motion for recusal of the member presiding at the hearing.
ISSUE
4The Assessment Review Board (“Board”) must determine the correct current value for the subject property, and if that value is equitable with assessments of similar lands in the vicinity.
5As a preliminary issue, the Board must determine whether there are grounds for a reasonable apprehension of bias such that the member presiding must recuse herself from hearing this appeal.
DECISION
6The Board determines that no grounds exist which would give rise to a reasonable apprehension of bias. The recusal motion is therefore denied.
7The Board determines the current value of the subject property to be $900,000 as at the January 1, 2012 valuation date.
8The Board has made reference to the assessments of similar lands in the vicinity and finds that no adjustment is required to make the assessment of the subject property equitable with the assessments of similar properties in the vicinity.
9The decision of the Board is to reduce the assessment from $1,048,000 to $900,000 for the 2013, 2014 and deemed 2015 taxation years.
REASONS FOR DECISION
Motion for Recusal
10As the hearing commenced, the Board noticed Mr. Stephenson present in the hearing room seated with the Appellant. The Board asked Mr. Stephenson, in the event that he would be representing Ms. Stephenson, to identify the capacity in which he would act, specifically as counsel, paralegal or agent, in accordance with s. 11 of the Rules of Practice and Procedure (“Rules”) that states:
A party may attend a proceeding in person or by a representative. Representatives who are not licenced by the Law Society of Upper Canada must obtain written authorization and may be asked to provide this authorization to the Board at any time. If representation changes, the party and the representative shall immediately notify the Board and the other parties.
11Mr. Stephenson refused to answer this inquiry on the grounds that it was irrelevant. The Board then posed the same questions to Ms. Stephenson. However, Mr. Stephenson instructed her not to answer and stated that all communications to Ms. Stephenson must be addressed to him.
12As the Board was not prepared to proceed without knowing Mr. Stephenson’s capacity to represent Ms. Stephenson, the Board stood the matter down and the presiding member left the hearing room to consult with the Duty Vice-Chair, Peter Andrews.
13The presiding member’s discussion with Mr. Andrews was confined to the procedural challenge raised by Mr. Stephenson’s refusal to answer the Board’s questions and did not pertain in any way to the merits of the appeal. In fact, the Board had not yet begun to hear evidence at the time of the consultation with Mr. Andrews.
14The presiding member then returned to the hearing room and brought Rule 11 to the attention of the parties. The Board stated that, in light of Rule 11, it would be necessary for Mr. Stephenson to identify himself and reveal to the Board the capacity in which he was acting.
15Mr. Stephenson then identified himself as a lawyer, member of the Ontario Bar and the husband of Ms. Stephenson. Mr. Stephenson then brought an oral motion for the recusal of the presiding member on the grounds that, by exhibiting a hostile attitude and conduct, and by consulting with unidentified individuals outside of the presence of the parties, her actions had given rise to a reasonable apprehension of bias.
16Mr. Martins stated that MPAC would take no position on the recusal motion.
17The Board then adjourned the proceedings to consider Mr. Stephenson’s arguments regarding recusal.
18Upon the presiding member returning to the hearing room, of Mr. Stephenson immediately indicated that further evidence had come to light that had bearing on the motion for recusal.
19Mr. Stephenson stated that, following the presiding member’s earlier consultation with Mr. Andrews, both Mr. Andrews and Paul Muldoon, the Associate Chair of the Board, had entered the hearing room and observed the proceedings. Mr. Stephenson stated that neither of these individuals had identified themselves to him and that Mr. Andrews had asked him his name. Correctly supposing Mr. Muldoon and Mr. Andrews to be members of the Board, Mr. Stephenson argued that their presence in the hearing room was intended to intimidate the taxpayer. Mr. Stephenson consequently submitted that the Board had demonstrated institutional bias.
20The Board considered Mr. Stephenson’s supplementary submissions on the issue of recusal and then issued oral reasons for its decision with respect to the recusal motion.
21The Board denied the motion given that no particulars with respect to the allegedly hostile attitude and conduct had been provided. Rule 11 provides authority for the Board to make inquiries as to the capacity and qualifications of those who appear before it as representatives. In light of Mr. Stephenson’s refusal to answer the Board’s questions, the only reasonable course of action was to consult with Mr. Andrews as to how to proceed. Indeed, Mr. Andrews’s role as duty Vice-Chair is to field exactly this sort of inquiry.
22Mr. Stephenson did not provide any authority for the proposition that the Board is obliged to conduct such consultations in the presence of the parties. Mr. Andrews did not dictate the Board’s decision to require this information from Mr. Stephenson, rather he assisted the Board by directing the presiding member’s attention to the relevant Rule of Practice and Procedure which provides authorization for the Board’s request that Mr. Stephenson identify the capacity in which he was acting.
23Having had the benefit of consulting the relevant authorities, the Board now provide further supplemental reasons in support of its decision on the recusal issue.
24The Supreme Court of Canada has articulated the test for recusal as follows:
What would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude. Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly.
Wewaykum Indian Band v. Canada, [2003] 2 SCR 259, 2003 SCC 45, at para 60.
25The presumption of impartiality carries considerable weight and the burden lies on the party arguing for recusal to establish that circumstances justifying it exist (Wewaykum Indian Band v. Canada, [2003] 2 SCR 259, 2003 SCC 45, at para 59).
26The principles of natural justice must be interpreted flexibly as applied to administrative tribunals such as the Board. The Supreme Court has recognized that:
The rules of natural justice must take into account the institutional constraints faced by an administrative tribunal…It is unrealistic to expect an administrative tribunal such as the Board to abide strictly by the rules applicable to courts of law.
The rules of natural justice should not discourage administrative bodies from taking advantage of the accumulated experience of its members. On the contrary, the rules of natural justice should in their application reconcile the characteristics and exigencies of decision making by specialized tribunals with the procedural rights of the parties.
International Woodworkers of America, Local 2-69 v. Consolidated-Bathurst Packaging Ltd., 1990 CanLII 132 (SCC), [1990] 1 SCR 282, [1990] SCJ No. 20, at paras 69 and 73.
27Moreover, Mr. Stephenson’s arguments concerning perceptions of institutional bias arising from the presence of Mr. Andrews and Mr. Muldoon in the hearing room must be considered in light of Rule 131 of the Rules that stipulates that hearings shall generally be open to the public.
28In light of the issues raised by Mr. Stephenson, the attendance of Mr. Andrews and Mr. Muldoon in the hearing room to observe proceedings was not untoward and was within the scope of their duties. Neither Mr. Muldoon nor Mr. Andrews participated in the hearing or in the decision-making process in any manner. The Board’s discretion was in no way fettered by the presence of either Mr. Muldoon or Mr. Andrews.
29In the circumstances, an informed person, viewing the matter realistically and practically, would not conclude that the Board would not decide fairly. As no reasonable apprehension of bias exists, there are no grounds for recusal.
Appeal of the Assessment
The Legislation
30In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“Act”):
31Section 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.
32Section 19(1) of the Act states:
19(1) Assessment based on current value. – The assessment of land shall be based on its current value.
33Section 19.2(1) of the Act states:
19.2(1) Valuation days. – Subject to subsection (5)1, the day as of which land is valued for a taxation year is determined as follows:
For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.
For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.
34Section 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.
35Section 40.(17) of the Act states:
40.(17) Burden of proof. -- For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.
Analysis
36Under the Act the Board is required to:
find the current value of the subject property;
make reference to the value at which similar lands in the vicinity are assessed; and
adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.
Current Value
37The best measure of the current value of a property is the price at which it sold in an arm’s-length transaction on the valuation date. In the absence of such a transaction, the Board must consider recent arm’s-length sales of comparable properties in the same vicinity.
38Mr. Martins introduced a Market Analysis Study in support of the $1,048,000 assessment he proposes. This document compares 13 sold properties to the subject property, as detailed in Table 1 below.
Table 1
Subject Property
Sale A
Sale B
Sale C
Sale D
Sale E
Address
2 Kingsgarden Road
52 Kingsway Cres.
42 Kingsgarden Road
10 Kingsmill Road
352 Prince Edward Drive
350 Prince Edward Drive
Year Built
1938
1941
1941
1935
1927
1940
Effective Year Built
1938
1941
1941
1970
1970
1975
Bldg. Size (sq. ft.)
1,693
1,642
1,404
1,966
1,625
1,761
Lot Size (sq. ft.)
4,680
8,050
3,514.8
5,625
5,000
5,000
Sale Amt. ($)
1,401,000
930,000
1,141,000
1,050,000
1,049,000
Sale Date
2011/11
2011/07
2012/05
2011/05
2012/07
Time adj. sale amt. ($)
1,413,512
961,196
1,111,485
1,098,622
1,010,250
Subject Property
Sale F
Sale G
Sale H
Sale I
Sale J
Address
2 Kingsgarden Road
43 Wendover Road
67 Jackson Avenue
84 Willingdon Blvd.
48 Strath Ave.
52 Strath Ave.
Year Built
1938
1950
1933
1934
1940
1938
Effective Year Built
1938
1976
1970
1973
1960
1938
Bldg. Size (sq. ft.)
1,693
1,827
1,717
1,674
2.046
1,886
Lot Size (sq. ft.)
4,680
6,550
5,000
5,000
6,300
6,750
Sale Amt. ($)
1,125,000
1,225,000
1,301,000
1,376,000
1,265,000
Sale Date
2012/06
2012/10
2012/04
2011/04
2011/07
Time adj. sale amt. ($)
1,089,635
1,159,973
1,274,674
1,448,663
1,307,433
Subject Property
Sale K
Sale L
Sale M
Address
2 Kingsgarden Road
70 Strath Ave.
2 Dunedin Drive
115 Strath Ave.
Year Built
1938
1945
1940
1946
Effective Year Built
1938
1983
1940
1963
Bldg. Size (sq. ft.)
1,693
2,444
1,560
1,308
Lot Size (sq. ft.)
4,680
4,446
4,648
3,960
Sale Amt. ($)
1,175,000
975,000
805,000
Sale Date
2012/05
2010/12
2012/02
Time adj. sale amt. ($)
1,144,606
1,052,646
797,937
39Mr. Martins acknowledges that the properties which are the subjects of sales A, I, J and K are superior to the subject property and that the properties which are the subject of sales B, D, E and M are inferior to the subject property.
40Mr. Martins submits that the best comparator is the property which was the subject of Sale L. Mr. Stephenson does not dispute this, but argues that the interior of this property has been extensively renovated and that this accounts for the price at which the property was sold. This property is similar in age and only slightly smaller in terms of building size and lot size. The time-adjusted sale amount for the property which is the subject of Sale L is $1,052,646, slightly more than the assessed value of the subject property. Mr. Martins submits that, given the similarities of the subject property and of the property that was the subject of Sale L, an assessment value of $1,048,000 is reasonable for the subject property.
41Mr. Stephenson submitted that the comparators submitted by MPAC do not offer valid points of comparison because of the internal improvements performed on these properties which have increased their values, in contrast to the poor internal state of repair of the subject property. In particular, Mr. Stephenson submitted that the property which is the subject of sale E, and which is characterized by MPAC as inferior to the subject property, is in fact superior, based on the relative states of repair of the two properties. Mr. Martins acknowledges this to be the case. The time adjusted sale amount of the property which is the subject of sale E is slightly less than the assessed value of the subject property ($1,010,250 as compared to $1,048,000).
42Although Mr. Martins characterized the neighbourhood in which the subject property is situated as affluent, he acknowledged under cross-examination that this is not necessarily indicative of the condition of the subject property. Mr. Martins further acknowledged that many of the comparator properties he submitted have been torn down and rebuilt. The Board finds that this limits the utility of these comparators, given that no such reconstruction has been effected to the subject property.
43Mr. Stephenson submitted that the usefulness of the comparator properties submitted by MPAC is further impaired by the fact that some of these sales are purchases by developers, rather than actual residents. Mr. Stephenson submits that developers are prepared to pay higher prices and that these sales cannot be used to establish the current value of the subject property.
44Pursuant to s. 19.(1) of the Act, assessments are to be based on the current value of the land in question. As defined in s. 1 of the Act, current value refers to the price the land would realize if sold in an arm’s length transaction by a willing seller to a willing buyer, at the valuation date. The Board notes that the Act does not distinguish between sales where the purchaser’s object is future development and sales where the purchaser intends to reside at the property. Provided that a sale takes place at arm’s length, it can be used as a comparator. Mr. Stephenson did not provide any authority to the contrary and did not produce any actual evidence that the purchases in question were made for development purposes. Consequently, the Board will not disregard MPAC’s comparators on this basis.
45Mr. Stephenson submitted that the assessment value proposed by MPAC does not account for the internal deficiencies and state of disrepair of the subject property. In particular, the subject property’s roof is prone to ice-damning and leaks. This has caused damage to the underlying wooden supports. There are additional water penetration issues in the basement. Further, the shower in the master bedroom is not serviceable and efflorescence, or salt staining, is present in several locations. Plumbing deficiencies limit the use of multiple water outlets simultaneously. The subject property is not sufficiently insulated. The stonework in the subject property’s yard is seriously damaged.
46Mr. Stephenson presented photographic evidence of these and other deficiencies and estimates of the cost of performing certain repairs. Mr. Stephenson submits that mould is present in several locations throughout the subject property. The Board accepts but notes however, that no expert evidence was presented to confirm the presence of mould.
47The condition of the subject property was upgraded by MPAC from average to fair in 2009. Mr. Stephenson submits that this classification is erroneous based on the aforementioned defects of quality. Mr. Stephenson submits that the condition of the subject property should be classified as poor.
48The Board notes that a prior appeal of the assessment of the subject property occurred in 2010 (Stephenson v. Municipal Property Assessment Corp. Region No. 09, [2010] O.A.R.B.D. No. 368). At that time, MPAC conceded that the condition of the subject property was poor and this concession was accepted by the Board. The Board notes that the same issues with respect to the subject property’s condition persist to this date. Consequently, the Board accepts Mr. Stephenson’s submission that the condition of the subject property should be classified as poor.
49Mr. Stephenson submitted his own set of comparator properties as detailed in Table 2 below:
Table 2
Subject Property
Sale A
Sale B
Sale C
Sale D
Sale E
Address
33 Wendover
52 Kingsway Cres.
166 The Kingsway
4 Kingsgrove
11 Kingscourt
21 Willingdon
Year Built
1938
1931
1945
1942
1933
1939
Bldg. Size (sq. ft.)
1,693
1,405
1,506
1,644
1,660
1,674
Lot Size (sq. ft.)
4,680
3,000
5,080
4,800
3,590.09
3,750
Current Assessment Value ($)
1,048,000
808,000
1.044,000
1,048,000
1,203,000
1,133,000
Sale value ($)
950,000
$825,000
$905,000
941,000
989,000
Sale Date
2012/11
2012/07
2011/10
2012/07
2012/08
50The Board notes that the evidence presented by Mr. Stephenson illustrates inaccuracies in the manner in which MPAC has assessed the comparator properties in the past. There are significant differences between the assessed value of these properties and the prices at which they sold in the recent past. Mr. Martins conceded that MPAC reduced the assessment of the property which is the subject of sale D from $1,203,000 to $1,084,000 after sale D occurred. Similarly, the assessment value of the property which is the subject of sale E was reduced from $1,133,000 to $1,049,000 after sale E occurred.
51The Board finds that the Appellant has raised legitimate concerns with respect to the accuracy of MPAC’s valuation methodology as it pertains to the subject property and the comparators submitted. Further, although no expert evidence was presented and so the full extent of the deficiencies in the state of repair of the subject property cannot be fully assessed, the Board accepts that these deficiencies exist and would impair the value the subject property could command in an arm’s length transaction.
52Accounting for the serious deficiencies identified in the condition of the subject property and the inaccuracies identified by the Appellant in MPAC’s valuation methodology, the Board finds the value of the subject property to be somewhat less than the most-applicable comparators submitted, namely sale L from table 1 above, and sale C from table 2 above. Consequently, the Board finds the current value of the subject property to be $900,000.
Reference to Similar Lands in the Vicinity
53The assessment to sales ratio (“ASR”) of a property compares its value as assessed with its sales price. An ASR of 1.00 indicates that the assessment value is identical to the sales price.
54Mr. Martins introduced a study of 30 residential properties in the area. This study demonstrated that MPAC’s assessment methodology achieved equitable assessments because the median time-adjusted ASR was 0.98, which falls within the acceptable range of 0.90 – 1.10, as mandated by the International Association of Assessing Officers.
55Having reduced the current value for the subject property for the reasons detailed above, the Board does not find that any further adjustment is required to achieve equity with similar lands in the vicinity, as required by s. 44.(3)(b) of the Act.
CONCLUSION
56The Board determines the current value of the subject property to be $900,000 as at the January 1, 2012 valuation date.
57The Board has made reference to the assessments of similar lands in the vicinity and finds that no adjustment is required to make the assessment of the subject property equitable with the assessments of similar properties in the vicinity.
58The decision of the Board is to reduce the assessment from $1,048,000 to $900,000 for the 2013, 2014 and deemed 2015 taxation years.
2014 DEEMED APPEAL
59An appeal for the 2013 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 2013 appeal before March 31, 2014. For that reason, this decision also applies to the 2014 taxation year.
60Section 40.(26) of the Act directs:
40.(26) 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.
2015 DEEMED APPEAL
61An 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.
62Section 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.
“Tanya Walker”
TANYA WALKER
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248