Quarre Properties Inc. v. Town of Richmond Hill, 2016 CanLII 24420

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 29, 2016

FILE NO.: WR 138686

Assessed Person(s): Quarre Properties Inc., and Heartland (Seven) Limited

Appellant(s): Quarre Properties Inc., and Heartland (Seven) Limited

Respondent(s): Town of Richmond Hill

Property Location(s): 35 Orlando Avenue

Municipality(ies): Town of Richmond Hill

Roll Number(s): 1938-050-046-10103-0000

Appeal Number(s): 3056763

Taxation Year(s): 2013

Hearing Event No.: 607448

Legislative Authority: Section 356.(6) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended

Heard: February 3, 2016 in Richmond Hill, Ontario, and February 26, 2016 by telephone conference call

APPEARANCES:

Parties	Representative
Heartland (Seven) Limited and Quarre Properties Inc.	Enzo Fonte
Town of Richmond Hill	Annette Kimelman
Canada Post Corporation	John Clark

DECISION OF THE BOARD DELIVERED BY SCOTT McANSH AND DIRK VANDERBENT

BACKGROUND

1Heartland (Seven) Limited (“Heartland”) and Quarre Properties Inc. (collectively the “Appellant”) owned a large industrial property at 35 Orlando Drive in Richmond Hill. The relevant chronology of events is as follows:

Date	Action	Event
January 2012	Assessment	The subject property is assessed as one block (16.68 Acres)
June 2012	Sale	Appellant sells of a portion of the subject property to Canada Post Corporation (“Canada Post”) (5.06 Acres)
2013	Payment of Taxes	Appellant pays the full property taxes on the whole subject property (16.68 acres)
April 2014	Municipal Act Application	Appellant applies to the Municipality for apportionment of the payment of “unpaid” taxes

2More specifically, on April 9, 2014 the Appellant applied to the Town of Richmond Hill (the “Town”), pursuant to s. 356 of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Municipal Act”), to apportion the taxes for the 2013 tax year between the two new parcels that were created. Because the Appellant had paid the 2013 tax bill in full respecting both parcels, Heartland requested a re-imbursement of taxes.

3Pursuant to s. 356, the Town Council held a meeting on September 5, 2014, to make a decision in respect of the Appellant’s application. However, the Town did not notify the Appellant of the meeting as required by s. 356(4). A representative of the Appellant did not attend or otherwise participate in the meeting. Town Council then decided to apportion the taxes based a statement of relative value prepared by the Municipal Property Assessment Corporation (“MPAC”).

4On November 14, 2014, the Appellant filed an appeal of the Town Council’s decision with the Assessment Review Board (the “Board”), pursuant to s. 356(6) of the Municipal Act, asserting that Council’s apportionment is in error, more particularly that the parcel retained by the Appellant was over-valued, therefore placing an unfair tax burden on the parcel retained by the Appellant.

5A hearing was held in person on February 3, 2016. The Town disputes the Appellant’s appeal. Canada Post is not a party to this proceeding. However, a representative from Canada Post attended before the Board and advised that Canada Post supports the Appellant’s position in this proceeding.

6For the reasons that follow, the Board dismisses the Appellant’s appeal. However, the Board recommends that the Appellant, a representative from MPAC, and the Town, meet to review the Appellant’s analysis, in an effort to arrive at consensus regarding the correct apportionment between the two parcels.

RELEVANT LEGISLATION

7Municipal Act:

Division into parcels

356. (1) Upon application by the treasurer of a local municipality or to the treasurer by an owner of land, the local municipality may,

(a) divide, for the purposes of this section, land which is assessed in one block into two or more parcels if each parcel is one that can be legally conveyed under the Planning Act;

(b) apportion the unpaid taxes on the land among the parcels,

(i) in proportion to their relative value at the time the assessment roll for the year in which the application is made was returned, or

(ii) if council is of the opinion that an apportionment under subclause

(i) is not appropriate due to special circumstances, any other manner; and

(c) direct what proportion of any part payment of taxes on the land is to be applied to each of the parcels.

Statement

(2) Upon the request of the local municipality, the assessment corporation shall provide a statement of the relative value of the parcels and the statement is conclusive.

Meeting

(4) On or before September 30 of the year following the year in which the application is made, council shall,

(a) hold a meeting at which the applicants and owners of any part of the land may make representations to council;

(b) notify the applicants and owners of the meeting by mail sent at least 14 days before the meeting; and

(c) make its decision.

Notice

(5) Within 14 days after making its decision, council shall notify the applicants and owners of the decision and specify the last day for appealing the decision.

Decision

(7) The Assessment Review Board shall, after giving notice to the appellants, the owners and the treasurer of the local municipality, hear the appeal and may make any decision council could have made under clause (1) (b). . . .

Adjustment of tax roll

(12) Immediately after a decision of council or the Assessment Review Board, the treasurer of the local municipality shall adjust the tax roll to reflect any division into parcels and apportionment of taxes on the land among the parcels made by the decision.

Effect

(13) Once the tax roll is adjusted, the taxes shall be deemed to have been always levied in accordance with the adjusted tax roll.

ISSUES

8The issues are:

(1) Whether the Board has jurisdiction to hear the Appellant’s appeal under s. 365(1)(b), as there are no unpaid taxes; and

(2) If the answer to issue 1 is yes, whether, due to special circumstances, it is appropriate to apportion the unpaid taxes on the land among the parcels in proportion to their relative value at the time the assessment roll for the year in which the Appellant’s application was made, was returned.

DISCUSSION AND ANALYSIS

Evidence

9Neither party provided formal testimony in this proceeding, as the factual evidence is not in dispute.

10Prior to the sale to Canada Post, 35 Orlando Court was assessed as one block comprising 16.68 acres. For the 2012 valuation day, it was valued at $25,599,000, with $22,969,000 in the Industrial property class and $2,630,000 in the Industrial Excess Land property class. The Appellant sold 5.06 acres of this block to Canada Post, and it is not disputed that the land was divided into two parcels that could be legally conveyed under the Planning Act, R.S.O. 1990, c. P.13, thus satisfying the requirements of s. 356(1)(a) of the Municipal Act.

11The Appellant paid, in full, the assessed 2013 taxes for the full block of land.

12After the conveyance of the parcel to Canada Post, the Appellant applied to the Town for apportionment of the payment of unpaid taxes between the two parcels for the 2103 taxation year, pursuant s. 356(1) of the Municipal Act. The net effect of this application, if granted, would be to re-apportion the 2013 taxes between the two parcels.

13Upon receipt of the Appellant’s application, the Town submitted a request to MPAC, pursuant to s. 356(2), to provide a statement of the relative value of the two new parcels. In response to this request, MPAC provided a statement that apportioned $22,969,000 in the Industrial property class to the 11.62 acre parcel retained by Heartland and $2,630,000 in the Industrial Excess Land property class to the 5.06 acre parcel transferred to Canada Post.

14As required by s. 356(4) of the Municipal Act, Town Council then held a meeting on September 5, 2014, to consider the Appellant’s application, and made a decision to apportion the taxes based on the statement of relative values provided by MPAC. However, the Appellant asserts, and the Town concedes, that the Town did not provide the Appellant with notice of this Council meeting, as required under s. 356(4)(b). The Appellant confirms that it did not attend the Council meeting.

15As a result of the Town’s apportionment of the 2013 taxes between the two parcels, the Appellant, who had paid the 2013 taxes on the full block of land, was subsequently given a partial re-imbursement of the taxes it had paid.

16It is the Appellant’s position that MPAC, when determining the apportioned value for the parcel transferred to Canada Post, assigned a value equivalent to a parcel of 4.21 acres, instead of the 5.06 acres actually transferred. The Town filed, as evidence in this proceeding, MPAC’s statement of relative values, which states that the value assigned to the parcel transferred to Canada Post is based on a parcel size of 5.06 acres, but the Appellant argues that this does not reflect the appropriate value.

17The Appellant submitted a six-step calculation to demonstrate that MPAC underestimated the acreage described above and to calculate the outstanding 2013 tax refund resulting from this error. The Appellant calculated the average value per acre for the full block of land using MPAC’s 2012 current value assessment ($624,860). The Appellant then divided this average value into MPAC’s apportioned value for the Industrial Excess Land ($2,630,000) to determine the number of acres used by MPAC in determining the value of the land apportioned to Canada Post. This number is 4.21 acres, which underestimates, by 0.85 acres, the 5.06 acres actually transferred to Canada Post. The remainder of the Appellant’s analysis calculates the outstanding tax refund which applies to this 0.85 acre ($11,091.85).

Issue 1: Whether the Board has jurisdiction to hear the Appellant’s appeal under s. 365(1)(b), as there are no unpaid taxes

Submissions by the Appellant

18The Appellant emphasizes that it is important for the Board to note that the City accepted the s. 356 application and sent out refunds based upon the apportionment of paid taxes.

19The Appellant maintains that, if it submitted the s. 356 application to the Town, but did not pay the taxes on the full block of land, then interest would accumulate at a rate of 15% (1.25% per month). The Appellant asserts that the tax bill it receives clearly states that neither Council nor Richmond Hill can waive any penalties or interest. The Appellant submits that this leads to one conclusion: "pay your taxes and Richmond Hill will issue refunds as appropriate". The Appellant maintains that, if the taxes had not been paid, thus leaving them for Council to apportion, the Appellant would incur interest and penalties that cannot be waived. The Appellant further notes that it can take a number of years for the application to come before Council and then the Board. Therefore, the Appellant asserts that it could face a possible lawsuit and that the property may be subject to tax sale. The Appellant submits that the reality and practice in Richmond Hill is that taxes are paid in full when due and the City subsequently apportioned the paid taxes amongst the owners of the divided parcels.

20The Appellant submits that s. 356 of the Municipal Act must be considered as a whole, asserting that its remedial purpose is to ensure taxes are apportioned in proportion to their assessed value in the case of land division. In support of this assertion, the Appellant relies on s. 64 of the Legislation Act, 2006, S.O. 2006, c. 21, Sch. F, which states: "An Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects." The Appellant submits that, given:

(1) the remedial purpose of s. 356,

(2) the wording of s. 356(12) and (13);

(3) the practice of the Town of Richmond Hill and other municipalities in apportioning paid taxes under s.356; and

(4) the consequences to owners of not paying taxes until the Board renders a decision;

a fair, large and liberal interpretation of s. 356, in this case, does not deprive the Board of jurisdiction to correct the Town's error.

21The Appellant emphasizes that it was not given notice of the meeting where Town Council made its decision to apportion the 2013 taxes between the two parcels, and, therefore, the Appellant maintains it was unable to present its case to Town Council when the decision was made. The Appellant submits that the Town should not be allowed to rely on a technicality, because of its failure to follow procedure, especially when, by its own practice, the Town re-apportions and then refunds taxes paid.

22The Appellant asserts that, as the amount at issue in this appeal is very small, and as Canada Post does not oppose the apportionment advocated by the Appellant, there would be no prejudice to the Town if the Board corrects, what the Appellant submits, is an error in the apportionment calculation.

Submissions by the Town

23The Town submits that it correctly determined the 2013 tax payable on the parcel retained by the Appellant, based on the statement of relative value prepared by MPAC, which, pursuant s. 356(2) of the Municipal Act, is conclusive.

Findings on Issue 1

24Pursuant to s. 356(1) of the Municipal Act, the Town, upon dividing land assessed in one block into two or more parcels, pursuant to s. 356(1)(a), may apportion the unpaid taxes on land among the parcels, pursuant to s.356(1)(b), and may direct what proportion of any part payment of taxes on the land is to be applied to each of the parcels, pursuant to s. 356(1)(c). However, pursuant to s. 356(6) an applicant or owner may only appeal to the Board the decision of council under s.356(1)(b) and the Board may only make a decision council could have made pursuant to 356(1)(b).

25The Legislature drew a clear distinction between situations where taxes are unpaid, in s. 356(1)(b), and situations where taxes have been partially paid, in s. 356(1)(c). The language of s. 356(1)(b) is clearly limited to parcels of land with unpaid taxes, though s. 356(1)(c) contemplates that there could be some situations where taxes have been paid in part, and gives council the authority to apportion those partial payments as they see fit. The jurisdiction of this Board is explicitly limited to situations involving unpaid taxes.

26The Appellant argues against this conclusion, maintaining that the remedial purpose of s. 356, as evidenced by s. 356(12) and (13) is to correct any error made by the Town. For the following reasons, the Board does not accept this submission. The Board accepts that this section should be interpreted as being remedial and should be given such fair, large and liberal interpretation as best ensures the attainment of its objects. However, this canon of statutory interpretation does not change the plain, unambiguous language of s. 356. The Applicant relies on s. 356(12) and (13), but these subsections simply confirm that, once a decision is made by the Town, or the Board, as the case may be, the tax roll shall be adjusted. There is nothing in the wording of these subsections to suggest that this Board has jurisdiction over the apportionment of paid taxes, an authority only given to Town Council pursuant to s. 356(1)(c).

27Although the Appellant argues that failure to pay taxes would result in interest and penalties, there is nothing in the legislation to suggest that the Appellant would be prevented from paying the amount of taxes the Appellant believed to be payable, based on the Appellant’s view of the correct apportionment. In such circumstances, should the Appellant be successful on an appeal to the Board respecting apportionment of unpaid taxes, it is far from clear that the applicant or owner would be responsible for payment of any interest and penalties. Certainly, the Appellant did not provide the Board with any evidence or statutory analysis to support its assertion that interest and penalties would be payable, other than to generally refer to a statement made in the standard tax bill mailed to the Appellant.

28In support of its position, the Appellant also emphasized the practice of the Town, as well as other municipalities, where the regime is to collect taxes, in full and up front, subsequently apportion taxes, and then provide refunds where applicable. However, the Board notes that such administrative practice cannot override the clear statutory language of s. 356 of the Municipal Act.

29For these reasons, the Board finds that the Appellant has not provided a convincing rationale to displace the plain statutory interpretation that the Board is limited to hearing appeals of decisions made by the Town under s. 356(1)(b), involving unpaid taxes. The Board has no jurisdiction in situations where the taxes have been paid, and, therefore, has no jurisdiction here. Due to this lack of jurisdiction, the Appellant’s appeal must be dismissed. There may be other remedies available to the Appellant, and others who allege errors in the apportionment of paid taxes, but this Board can provide no relief in such situations.

Issue 2: If the answer to Issue 1 is yes, whether, due to special circumstances, it is appropriate to apportion the unpaid taxes on the land among the parcels in proportion to their relative value at the time the assessment roll for the year in which the Appellant’s application was made, was returned

30As the Board has already found that the Appellant’s appeal does not fall within the Board’s jurisdiction, the Board finds that it is unnecessary to address this issue.

Recommendation

31This Hearing Panel offers the following observations and recommendation, in an effort to help resolve this dispute. Nothing in these observations or recommendation should be interpreted as having binding effect, as the Board has no jurisdiction over the apportionment of paid taxes.

32The Board first notes that the evidence adduced in this proceeding highlighted two significant issues. First, the Appellant was not given notice of the Town Council meeting, and consequently, did not have an opportunity to present Town Council with its analysis respecting MPAC’s statement of relative value. Secondly, it is not disputed that MPAC did not provide a response to the Appellant’s calculations. Neither the Appellant nor the Town called MPAC as witness in this proceeding. As a result, the Appellant’s analysis regarding the correct apportionment has never been considered by Town Council, and the Town took the position before us that they would not look behind MPAC’s statement of relative value, as it is conclusive. It would have been helpful to have MPAC’s position on the apportionment question. As noted above, the Board has no jurisdiction to determine whether the Appellant’s analysis of apportionment is correct. However, the Board encourages the Appellant, a representative from MPAC, and the Town, to meet to review the Appellant’s analysis in an effort to arrive at consensus regarding the correct statement of relative value of these two parcels.

DECISION

33The Appellant’s appeal is dismissed.