Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 14, 2015

FILE NO.: DM 127789

Moving Party(ies): Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s): North American Railway Hall of Fame

Respondent(s): City of St. Thomas

Property Location(s): 750 Talbot Street

Municipality(ies): City of St. Thomas

Roll Number(s): 3421-020-120-12100-0000

Appeal Number(s): 2970110, 2970421, 2970422, 2970423, 2970424, 2970425, 2970426, 2970427, 2970428 and 3027497

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

Hearing Event No.: 561674

Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: September 22, 2014 in St. Thomas, Ontario

APPEARANCES:

Parties	Counsel+/Representative
MPAC	William Somerville
North American Railway Hall of Fame	Matt Janes, Larry Longfield and Paul Smith
City of St. Thomas	No one appeared

DISPOSITION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a historic rail station on the main street of St. Thomas. The property includes the rail station building and associated lands that are used for parking. A portion of the building is leased to commercial tenants and is assessed in the Commercial Property Class. The parties agree that a portion of the remainder of the building is exempt from taxation. The dispute among the parties is the amount of the remainder that is exempt.

2Beginning with the 2013 taxation year MPAC applied an exemption to a portion of the building to reflect its use by the North American Railway Hall of Fame (“NARHF”). MPAC considers NARHF to be a scientific or literary institution as provided for in s. 3.(1)14 of the Act. The exempt portion was deemed to be the area occupied by the NARHF for its purposes.

3The parties agree that there is no dispute with regard to the valuation of the property and that the issue at hand is whether or not two areas of the building, currently used by NARHF for storage and for special events should be included in the area exempt from taxation under s. 3.(1)14 of the Act.

4At the outset of the hearing, Mr. Somerville brought a motion to dismiss all of the appeals. The basis of the motion was that the issue of the appeals related to the exempt from taxation status on a portion of the property. Mr. Somerville submitted that a dispute regarding exemption from taxation is a matter that must be addressed by application to the Superior Court of Justice under s. 46 of the Act. Mr. Somerville believes that since the exemption status of the property is the issue at hand, the Assessment Review Board (“Board”) has no jurisdiction and the appeals should be dismissed accordingly.

5In response, the Appellant submitted that the matter of exemption from taxation has already been addressed by MPAC agreeing to an exemption. Mr. Smith believes that the issue of exemption has been decided and that the issue at hand is the extent to which the exemption from taxation status applies to the subject property.

6At the conclusion of oral submissions, the Board advised the parties of its intention to reserve the decision as to the disposition of MPAC’s motion to dismiss and requested written submissions on the motion from the parties. The Board received written submissions from Mr. Smith and Mr. Somerville and the Board references them in this disposition of the motion.

Legislation

7In the disposition of the motion, the Board must consider the relevant legislation, as follows:

8Section 3.(1)14 of the Act states:

3.(1) Property assessable and taxable, exemptions. – All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:

14. Scientific or literary institutions, etc. – The property of every public library and other public institution, literary of scientific, and of every agricultural or horticultural society or association, to the extent of the actual occupation of the property for the purposes of the institution or society.

9Section 33.(1) of the Act states:

33.(1) Change re land omitted from tax roll – The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

1. The assessment corporation shall make any assessment necessary to correct the omission.

2. If the land is located in a municipality, the clerk of the municipality shall alter the tax roll upon receiving notice of the change, and the municipality shall levy and collect the taxes that would have been payable if the assessment had not been omitted.

3. If the land is located in non-municipal territory, the Minister shall alter the tax roll upon receiving notice of the change, and shall collect the taxes that would have been payable if the assessment had not been omitted.

10Section 40.(1) of the Act states:

40.(1) Appeal to Assessment Review Board. – Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) the person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) for land, portions of which are in different classes or real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

11Section 46 of the Act states:

Application to court

46. (1) Subject to subsection (1.1), any of the following persons may apply to the Superior Court of Justice for the determination of any matter relating to an assessment:

47. Any person against whom the land is assessed.

48. The assessment corporation.

49. The municipality in which the land is located or, if the land is located in non-municipal territory, the Minister. 2006, c. 33, Sched. A, s. 36 (1).

Exception

(1.1) No application to court may be made for the determination of a matter that could be the subject of an appeal under subsection 40 (1) or for a determination that lands are conservation lands for the purposes of paragraph 25 of subsection 3 (1). 2006, c. 33, Sched. A, s. 36 (1); 2008, c. 7, Sched. A, s. 15.

Judgment of court binding on Assessment Review Board

(6) Despite the fact that a question of the assessment of any person is pending before the Assessment Review Board, the judgment of the Superior Court of Justice or the Divisional Court shall be given effect to and is binding upon the Board. 1997, c. 5, s. 31 (3); 2001, c. 23, s. 3 (4).

Limitation on court’s order

(7) No order of a court on an application under this section shall alter an assessment or classification so as to alter taxes for a taxation year before the year in which the application was made. 1997, c. 5, s. 31 (4).

Omitted or supplementary assessments

(8) Despite subsection (7), an order of the court on an application under this section in respect of an assessment under section 33 or 34 shall apply in respect of all taxes levied pursuant to the assessment if the application is made in the year in which the assessment is made or in the immediately following year. 2000, c. 25, s. 11.

Application

(9) Subsection (8) applies to an order of the court made on or after that subsection came into force. 2000, c. 25, s. 11.

SUBMISSIONS OF THE PARTIES

12Mr. Somerville submits that MPAC has apportioned the assessment of the subject property between “taxable” and “exempt”. The taxable portions of the spaces within the building were those spaces that were determined by MPAC to qualify for an exemption because there were not occupied by the NARHF for their purposes.

13Mr. Somerville submits that if NARHF does not agree with the determination by MPAC of the amount of space eligible to be exempt from taxation, its recourse is an application to the Superior Court of Justice by way of s. 46 of the Act. He further submits that the issue is twofold; firstly, is the NARHF a Literary or Scientific Institution that is eligible for exempt status under s. 3.(1)14 of the Act?; and secondly, what areas of the subject property are “occupied” by the NARHF for its purposes?

14Mr. Somerville acknowledges that the question of whether or not the NARHF is an eligible literary of scientific institution has been answered. In applying the exemption to a portion of the property in 2013, MPAC acknowledges the NARHF as a Literary or Scientific Institution and is afforded tax exempt status on that portion of the subject property that they occupy for their purposes.

15Mr. Somerville believes that the area of the building that lies within the exempt portion might change from time to time and that MPAC has a duty to make amendments to its assessment accordingly as the circumstances dictate. The Board understands that the exempt area can increase or decrease depending on the area occupied by NARHF for its purposes.

16Mr. Smith submits that the only question is that of the amount of area within the building that is occupied by NARHF for its purposes as a literary or scientific institution as provided for in s. 3.(1)14 of the Act. Mr. Smith is of the opinion that disputes arising regarding the amount of the area of the building that is exempt or not, does lie within the jurisdiction of the Board. His reasoning is that if MPAC is able to amend the area of the taxable portion of the subject property by way of s. 33 of the Act, then the NARHF should have the ability to appeal the resultant amended assessment to the Board. Mr. Smith argues that appeals under s. 33 of the Act are clearly within the jurisdiction of the Board.

DISPOSITION OF THE MOTION

17The Board agrees with MPAC that it does not have jurisdiction to determine if a property or a portion of a property is exempt from taxation. The Board agrees that an application to the Superior Court of Justice under s. 46 of the Act is required if there is a dispute between MPAC and a taxpayer as to the whether a property or a portion of a property is exempt from taxation. There is no evidence before the Board that an application has been made to the Superior Court for any of the taxation years under appeal.

18In making this determination the Board relies on s. 40.(1), 46.(1) and 46.(1.1) of the Act. Section 40.(1) sets out the Board’s jurisdiction to hear appeals. The jurisdiction to determine if a property or a portion of a property is exempt from taxation is not included in matters itemized in s. 40(1). Section 46.(1) provides that an application may be made to Superior Court for a determination of any matter relating to an assessment and s. 46.(1.1) goes on to provide that the Superior Court does not have jurisdiction over any matter that could be the subject of appeal under s. 40(1).

19Section 33 of the Act provides for MPAC to issue an omitted assessment for a property for the current year and two preceding years when land has been omitted from the tax roll and no taxes have been levied on it for the omitted assessment.

20MPAC has added to the assessment of the property for the 2010 through 2012 taxation years with Notices of Omitted Assessments. The omitted assessments do not appear to recognize any portion of the land that was omitted from assessment as being exempt from taxation.

21While the Act allows for an appeal of the omitted assessments to the Board on the basis of incorrect current value or classification it does not allow for an appeal on the basis that a portion of the land is exempt from taxation. As stated above a s. 46 application to Superior Court is required.

22In the Board’s view since the Act does not give the Board the authority to determine if a property is exempt from taxation the determination must be made by the Superior Court.

23If the NARHF wishes to increase the amount of area exempt from taxation for the 2013, 2014 or 2015 taxation years a Superior Court application is required. Similarly If the NARHF wishes to seek an exemption on a portion of the property for which the omitted assessments were issued for the 2010, 2011, and 2012 taxation years a court application is required. It should be noted that s. 46.(7) and 46.(8) of the Act place time restrictions on the Superior Court’s jurisdiction to alter an assessment.

24The NARHF shall have 30 days from the date of the release of this decision to provide the Board proof in writing that a Superior Court application(s) has/have been commenced for the taxation years in question. If no application(s) has/have been commenced for a taxation year within the time limits of the Act the appeals will be dismissed.

25If the Board is provided with proof of an active Superior Court exemption application the appeal(s) for the taxation year(s) for which the application applies will be adjourned sine die to await the outcome of the Superior Court application.