Assessment Review Board

Commission de révision de l'évaluation foncière

ISSUE DATE: November 26, 2015 FILE NO.: DM 2015M5

Moving Party(ies): Municipal Property Assessment Corporation ("MPAC") Region 09

Respondent(s): Antonio Ortiz Chew and Rebeca Chan Wan Han Chew

Respondent(s): Helen Galeota, Tina Thomas, Vasiliki Trokas and Estate of Serbinis Trokas

Property Location(s): 3206 Yonge Street

Municipality(ies): City of Toronto

Roll Number(s): 1904-116-180-03400-0000

Appeal Number(s): N/A

Taxation Year(s): 2009, 2010, 2011, 2012, 2013 and 2014

Hearing Event No.: 599833

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

Heard: October 9, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
MPAC	K. Lunau+
Antonio Ortiz Chew and Rebeca Han Chew	Self-represented
City of Toronto	No one appeared

DISPOSITION OF THE BOARD DELIVERED BY JOSEPH M. WYGER

INTRODUCTION/ISSUE

1Antonio Ortiz Chew and Rebeca Chan Wan Han Chew ("the Chews") own the storefront properties at 3208 and 3210 Yonge Street. Because of some legal transfers, a severance, consolidation and re-assignment of roll numbers involving the neighbouring properties at 3204 and 3206 Yonge Street, the Chews have been paying the property taxes since 2009 on a property that they do not own. MPAC seeks to remedy this situation through s. 40.1 of the Assessment Act ("Act"), which permits the Assessment Review Board ("Board") to either create appeals or to correct the roll directly, if it appears that this scenario may constitute a palpable error on the assessment roll.

DISPOSITION OF MOTION

2The assessment roll is to be corrected by removing Antonio Ortiz Chew and Rebeca Chan Wan Han Chew as the assessed persons on assessment roll number 1904-116-180-03400-0000. That roll number is to be further corrected to reflect Helen Galeota, Tina Thomas, Vasiliki Trokas and the Estate of Serbinis Trokas as the assessed persons for the 2009 through 2014 taxation years.

REASONS FOR DISPOSITION OF MOTION

Facts

3The genesis of the error is somewhat convoluted, and began with 2007 deeds to the neighbouring properties at 3204 and 3206 Yonge Street being registered, transferring both of those properties from Vasiliki and Serbinis Trokas to themselves and to Tina Thomas and Helen Galeota ("Trokas-Thomas") as joint tenants. Those properties had been assessed under one roll number ending 03500. The Chew's properties at 3208 and 3210 Yonge Street had been assessed on separate roll numbers ending 03400 and 03300 respectively.

4The transfers of 3204 and 3206 Yonge Street sparked an MPAC review and resulted in those two properties being divided into two roll numbers ending 03500 and 03400 respectively. At the same time, MPAC consolidated the Chew's two properties at 3208 and 3210 Yonge Street into a single roll number ending 03300. So the Trokas-Thomas property at 3206 Yonge Street was given the roll number ending 03400 that formerly belonged to the Chew's property at 3208 Yonge Street. Unfortunately, the Chew's name went along with their former roll number onto the assessment roll for the property they did not own at 3206 Yonge Street, and they paid the taxes on it for several years.

5As a result of the changes, for 2009 taxation the properties were assessed as follows:

i). 3204 Yonge Street (03500) – correctly assessed to Trokas-Thomas; ii). 3206 Yonge Street (03400) – incorrectly assessed to the Chews; iii). 3208 and 3210 Yonge Street (03300) – correctly assessed to the Chews.

Legislation

6Section 40.1 of the Assessment Act states:

40.1 Correction of errors. – If it appears that there are palpable errors in the assessment roll,

(a) if no alteration of assessed value or classification of land is involved, the Board may correct the roll; and

(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing appeals and direct the assessment corporation to be the appellant.

7Section 14.(1) of the Act states:

Assessment roll

Contents

14. (1) The assessment corporation shall prepare an assessment roll for each municipality, for each locality and for non-municipal territory and the assessment roll shall contain the following information as well as the information required under subsections (1.1) and (1.2):

15. The name and surnames, in full, if they can be ascertained, of all persons who are liable to assessment in the municipality or in the non-municipal territory, as the case may be.

16. The amount assessable against each person who is liable to assessment, opposite the person's name.

17. A description of each property sufficient to identify it.

18. The number of acres, or other measures showing the extent of the land.

19. The current value of the land.

20. The value of the land liable to taxation.

21. The value of land exempt from taxation.

22. The classification of the land.

23. Such other information as may be prescribed by the Minister. 2006

8Section 17 of the Act states:

Land assessed against owner

17. (1) Subject to section 18, land shall be assessed against the owner.

Land held by trustees, etc.

(2) Land held by a person as a trustee, guardian, executor or administrator shall be assessed against the person as owner in the same manner as if the person did not hold the land in a representative capacity, but the fact that the person is a trustee, guardian, executor or administrator shall, if known, be stated in the roll, and the person is only personally liable when and to the extent that the person has property as trustee, guardian, executor or administrator, available for payment of the taxes.

MPAC's Position

9Karey Lunau, counsel for MPAC, advanced the position that the Chews were wrongly assessed on the roll ending 03400 for 3206 Yonge Street, for the 2009 through 2014 taxation years. She argued that since no alteration of class or value was involved, that the Board could simply correct this error pursuant to s. 40.1(a). She presented several cases to support her view that the error in question was indeed a palpable error, and that there appeared to be no restriction on the Board's authority to reach back to 2009 to correct it. She referenced s. 14.(1) of the Act which describes the contents of the assessment roll, and its' very first provision requiring the names of all persons who are liable to assessment to be on the roll. According to s. 17 of the Act, land shall be assessed against the owner, not the next-door neighbours.

Respondents' Position

10The Chews attended the motion hearing, but did not make submission's, allowing Ms. Lunau to argue in favour of a correction to the roll. The other respondents, Vasiliki Trokas, Tina Thomas and Helen Galeota did not appear, although properly served with notice of the motion hearing. These were the legal owners of 3206 Yonge Street at all material times, and Ms. Lunau confirmed by way of a telephone conversation with them that they were well aware of the time and place and nature of the motion to be heard.

Analysis

11I accept and agree with all of Ms. Lunau's submissions. Her materials clearly laid out the origin and nature of the error. Her reference to the case law supports the assertion that the error is palpable because the roll ending 03400 displays names of assessed persons who are not shown as owners of that property on title. A brief review of the relevant case-law follows.

Whitby (Town) Municipal Property Assessment Corp., v. Region No. 13 [2004] O.A.R.B.D. No. 218 ("Whitby")

12This was a case where an entire subdivision of lots and blocks was legally in place before roll return, but was assessed as a single vacant parcel of land. The Board stated that the definition of "palpable" in that context was "plain and obvious". The contents of the assessment roll pursuant to s. 14.(1)3 were plainly and obviously wrong because at the time in question the property description on the roll was a single vacant parcel, when in fact the correct legal description was a number of lots and blocks on a plan of subdivision. This is analogous to the Chew's situation as the names on roll 03400 were plainly and obviously wrong as the legal title to the lands showed otherwise.

584952 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 9 [2007] O.A.R.B.D. No. 792 ("584")

13The facts here were similar to Whitby supra, in that a severance of a 10.83 acre parcel into two legal parcels prior to roll return was not reflected on the assessment roll, such that the owner continued to be assessed for the entire acreage while actually only owning 5.02 acres. In that case counsel who argued this was a palpable error referred to cases where the adjudicators have looked at circumstances beyond the physical roll to find palpable error; cases where palpable error meant a departure from what should have occurred.

14The Board in 584 referenced the circumstances behind the roll, being that a legally separate parcel of land that existed throughout 2006, was not assessed for that taxation year. The Board found this was an error since it clearly does not comply with several sections of the Act, in particular s. 14.(2). This error was also reflected on the face of the roll itself, by showing a parcel of 10.83 acres, which the legal title showed was in fact only 5.022 acres. The Board adopted the same reasoning as that in the Whitby case, and found that there were palpable errors in the assessment roll for the property, "both in the circumstances behind the roll and on the face of the roll that reflect those circumstantial errors."

1331679 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 15 [2004] O.A.R.B.D. No. 73 ("133")

15This was another case of a land severance resulting in an incorrect roll. The roll reflected incorrect location, description and acreage. In this case member I. Birnie cited both Whitby and 584 and elaborated on the Board's entitlement to look at circumstances behind the roll to determine palpable error: "To hold that the errors must be palpable errors on the face of the roll, would permit the most flagrant errors to remain uncorrected, because the Board would not be permitted to look at the circumstances behind the roll which show they are palpable errors." I suppose that it would always be true that the face of the roll itself would never display a plain and obvious error, without the context of understanding the circumstances behind why a particular aspect of the roll is incorrect. I agree that it is not possible to know that some part of the roll is not correct, without knowing what the correction is and how it is derived.

16I also find it instructive that member Birnie considered "an unfair tax burden being placed on the assessed person" as his main criteria for exercising his discretion under s. 40.1. In the Chew's case, paying someone else's property taxes for five years surely qualifies as an unfair tax burden.

Municipal Property Assessment Corp., v. Marcoccia, et al (March 16 2011), (Ont. A.R.B.)[unreported] ("Marcoccia")

17This was a case where MPAC's omitted assessment of a residential condominium building was issued with an effective date reflecting the closing date rather than the initial occupancy date some 10 months earlier. The Board agreed with MPAC that the incorrect effective date was a palpable error requiring correction. This might have been problematic, since the effective date of s. 33 omitted assessment is not found in the assessment roll contents under s. 14. Section 33 corrects omissions to the tax roll, not the assessment roll. However, Vice-Chair Mather in Norjohn Transfer Systems Inc. v. Municipal Property Assessment Corp., Region No 15 [2007] O.A.R.B.D. No. 464 ("Norjohn") concluded that s. 40.1 is available to correct a palpable error in an omitted or supplementary assessment as well, effectively finding that those provisions alter the assessment roll as well as the tax roll. Leave to appeal was denied by the Divisional Court, thereby extending the reach of s. 40.1 beyond the strict confines of s. 14.

18The Marcoccia decision is often cited for the proposition that the Board's jurisdiction is limited to determining whether the error is "palpable", not to determine the reasons for the error and that why MPAC made the error is irrelevant for the purposes of s. 40.1 of the Act. The case is no longer good law on that point. There is a line of cases, including a Superior Court decision, that suggest that the how and why a purported error comes about may be very relevant, and that "error" be construed correctly as a wrong that results from inadvertence and/or unintentional omission, and not an intentional judgment to return the roll incorrectly: Sarnia (City) v. Municipal Property Assessment Corp., Region No 26, [2011] O.A.R.B.D. No 392; WBH Woodstock Ltd. v. Woodstock (City) [2005] O.A.R.B.D. No. 414 (ARB File No. 39980); East of Bay (2003) Development Corp. v. Toronto (City) 2010 ONSC 3337, [2010] O.J. No. 2468; 2010 ONSC 3337. In Sarnia, supra, the Board adopted the Court's reasoning in East of Bay, supra that "how and why the purported error comes about may be very relevant. This is so because the distinction between an inadvertent or unintentional wrong and a deliberate judgment to be wrong goes to the very heart of whether the wrong can be characterized as a manifest error, an omission or a palpable error. The Board finds that an intentional judgment to return the roll incorrectly is more in the nature of a falsehood, than it is a true error."

19So the enquiry into palpable error requires a consideration first of whether it is a true inadvertent and unintentional error, and second whether that error is palpable. In the Chews case, there is no evidence to suggest that their being placed on the wrong roll number is anything but a slip-up likely caused by the confusion of re-using an existing roll number. Ms. Lunau advised that her client is aware of the issue and generally tries to use new roll numbers to avoid this type of occurrence.

Scott et al. v. Municipal Property Assessment Corp., (February 12, 2015), (Ont. A.R.B.)[unreported] ("Scott")

20This case canvasses what sorts of matters are not palpable errors. The palpable errors alleged by the owners were wrong garage size and wrong lot size and a failure by MPAC to investigate and/or inspect the property despite receiving six building permits. Member Stabile correctly noted that "palpable error is an extra-ordinary remedy to be applied sparingly and only in the clearest of circumstances." He provided a thorough review of the case-law presented to him, which included the cases mentioned herein. His conclusion was that the purported errors were not palpable errors as contemplated under s. 40.1(b) of the Act: "These are valuation issues, to be dealt with by RFRs and subsequently appeals to the Board."

21The member correctly differentiated s. 40.1 from the "normal" appeal mechanisms in the Act. Those appeal mechanisms have strict timelines intended to provide some finality to the assessment roll. Valuations and classifications are put in place on the basis of someone's judgment, connoting a thoughtfulness or deliberateness of action. Parties have the right to challenge their value and classification under s. 40.(1)(a)(i) and (iv) on the grounds that those judgments are incorrect. Any alleged "errors" in classification or assessment are properly contested and challenged through the s. 40 appeal process since they are the resultant product of an assessor's subjective opinion or judgment. Component elements such as the size, age or quality of a structure for valuation purposes, or the use of the property for classification purposes, or anything that is subject to disagreement and requires evidence to prove it, cannot be said to be plain and obvious. Property owners are expected to monitor their annual assessments for anything they disagree with and those disagreements or differences of opinion are not in the same category with the kind of factual errors, which are not subject to serious debate, that s. 40.1 was created to deal with.

Exercise of Discretion

22It may be arguable that the Chews had a remedy under s. 40.(1)(a)(ii) in that any person can appeal on the basis that "the person or another person was wrongly placed on or omitted from the assessment roll." The word "wrongly" appears to envision the error of putting the wrong names on the roll, and that the Chews should have been vigilant to contest it when it happened. Part of the answer may be the complexity of the property tax system, with the capping and clawback regimes, musical chair roll numbers, complicated formulas and just a lot of numbers, that can be confusing to anyone. I consider it unreasonable to expect the Chews to police their assessment to the extent of catching this highly unusual scenario of being placed on someone else's roll number, without any notice or consultation that these changes were taking place. It would be unreasonable, unfair and highly prejudicial to penalize them for not acting quickly enough in this matter. I conclude that s. 40.1 was enacted to give the Board the discretion to cure just such an inequity, where in fact the error is palpable, even though the limitation period for another available remedy has run out.

23Section 40.1 is a discretionary remedy, and prejudice to the parties must be weighed any time such discretion is exercised. There is clearly financial prejudice to the Chews, in having paid the taxes on a commercial property they did not own for five years. Any prejudice to the Trokas-Thomas's who own that property is that they will have to pay the taxes that should have been levied on them, perhaps all at once. It is clearly their debt to pay, and if they thought it prejudicial they had the right to come and argue at the motion hearing. The City is unaffected as it should be in the same position as far as quantum of taxes. The error is hereby corrected.