F. M. and J. M. v. City of Mississauga, 2016 CanLII 28437

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

May 10, 2016

FILE NO.:

WR 137936

Assessed Person(s):

F. M. and J. M.

Applicant(s):

F. M. and J. M.

Respondent(s):

City of Mississauga

Property Location(s):

Address Withheld

Municipality(ies):

City of Mississauga

Roll Number(s):

Roll Number Withheld

Appeal Number(s):

3110388

Taxation Year(s):

2014

Hearing Event No.

602744

Legislative Authority:

Section 357.(1)(d.1)of the Municipal Act, 2001, S.O. 2001, c. 25, as amended

Heard:

December 18, 2015 in Mississauga, Ontario

APPEARANCES:

Parties

Counsel+/Representative

F. M. and J. M.

J. M.

City of Mississauga

S. Doyle

MEMORANDUM OF ORAL DECISION DELIVERED BY SUBUOLA AWOLERI ON DECEMBER 18, 2015

ISSUE

1The issue before the Assessment Review Board (“Board”) is to determine whether F. M. and J. M.’s, (the “Applicants”) property taxes for the taxation year 2014 should be cancelled, reduced or refunded as a result of the Applicants inability to pay due to sickness or extreme poverty under s. 357.(1)(d.1) of the Municipal Act, 2001 (“Act”).

DECISION

2The Board finds that the Applicants do not qualify for relief under s. 357.(1)(d.1) of the Act due to an inability to pay part or all of their property taxes due to sickness or extreme poverty.

3The Board therefore dismisses the application for cancellation, reduction or refund of property taxes for the taxation year 2014.

REASONS FOR DECISION

Legislation

4Section 357.(1)(d.1) of the Act provides:

Upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

5Section 357.(2) provides:

An Application may only be made by the owner of the land or by another person who,

(a) Has an interest in the land as shown on the records of the appropriate land registry office and the sheriff’s office;

(b) Is a tenant, occupant or other person in possession of the land; or

(c) Is the spouse of the owner or other person described in clause (a) or (b).

6Section 357.(7) provides:

Within 35 days after council makes its decision, an applicant may appeal the decision of council to the Assessment Review Board by filing a notice of appeal with the registrar of the board.

7The Act outlines a two part test. In order for the Applicants to qualify for relief under this section of the Act, the Board must first determine whether sickness or extreme poverty exists. If neither sickness nor extreme poverty exits, the application fails. If either is present, the Applicants must demonstrate an inability to pay all or part of their property taxes.

Evidence and Analysis

8The Applicants own and occupy the subject property. Consequently, they are both responsible for the payment of the property tax on this property.

At the commencement of the hearing of this application, J. M. advised the Board that her spouse, F. M. is not available, because he had to go to work. Hence, she will be the only Applicant giving evidence.

Sickness

9J. M. testified that seven years ago she started getting sick. She was stressed and depressed and could not focus and she had to leave her job. She also started seeing a psychiatrist during this period. They had a business and they lost everything and had to borrow money to pay back their debt. Two years ago, she was diagnosed with cancer and is currently undergoing treatment. She further presented the Board with Exhibit 1 which includes her oncology appointment confirmation from Credit Valley Hospital for radiation for the treatment of cancer. The Board recognizes and accepts that in the case of J. M. sickness exists and deems that J. M. has satisfied the eligibility criteria of “sickness” as enunciated in the Act, to fulfill the first part of the two part test requirement of the Act. The Board has to determine whether her sickness has affected her ability to pay all or part of her property tax in the year under review.

10J. M. testified that her spouse, F. M. is diabetic and he is being treated for this sickness. The Board notes that F .M.’s sickness has not prevented him from working as J. M. testified that he had to go to work. Furthermore, J. M. did not provide the Board with evidence of F. M.’s sickness. Therefore, the Board is unable to make a determination of F. M.’s illness in this regard.

11J. M. also testified that she and her spouse have difficulty with their finances due to huge credit card debts. F. M.’s application must be assessed on the basis of an inability to pay taxes due to “extreme poverty.”

Extreme Poverty

12The term “extreme poverty” is not defined under the Act. In determining whether the Applicant, F. M., is in a situation of extreme poverty, the Board has to consider the evidence presented by the Applicants regarding their financial situation, which is not limited to their income and expenses.

13The Board must then determine if the Applicants are unable to pay all or part of their property tax due to sickness or extreme poverty.

Applicants’ Submission

14J. M. is 63 years old. She does not work and is on disability. Her spouse is 65 years old and works as an Accounts clerk. They have three children but none of them reside in the subject property. J. M. submits that she and her spouse are unable to make the property tax payments due to financial difficulty. Consequently, they are seeking cancellation, reduction or refund of their taxes for 2014 taxation year. In support of their application; J. M. provided Exhibit 1 which includes: Oncology Appointment Confirmation, 2014 Canadian Imperial Bank of Commerce (“CIBC”), Statement of Locked in Registered Retirement Savings Plan (“RRSP”) Account; F. M.’s T4 - Statement of Remuneration; CIBC Personal Bank Account Statement; Long Term Disability Benefit Statements; the Applicants’ personal spreadsheet of expenses’; and the Applicants’ Canada Revenue Agency Statement of Canada Pension Plan Benefits.

Source of Income

15F. M.’s 2014 T4 states an employment income of $42,310.74, which provides a monthly income of $3,500 (rounded). The Applicants further have $3,167 as another source of income from their pension benefits as provided by the Applicants in their financial statement in Exhibit 2. This makes a total household income of $6,667 per month.

Assets

16The Applicants jointly own the subject property in Mississauga. The property was purchased in 1988 for $320,000. The existing mortgage against this property in 2014 was $336,000. The City submits that the assessed value of the property is $885,000. This was not disputed by the Applicants.

17F. M. also has a locked-in RRSP in the amount of $104,568.90. This was provided by the Applicants as part of Exhibit 1. Under cross-examination, J. M., asserts that this fund was not available to them until F. M. is over 70 years. The Board notes that J .M. provided no evidence in this regard. The City objected by stating that this fund is available prior to this age, and a withdrawal would only have tax consequences.

18The monthly property tax payable on the subject property is $588.55. The annual property tax is $7,062.58, of which $6,718.17 is outstanding for the 2014 taxation year.

Household Income and Expenses

19J. M., gave evidence that their household income and expenses for the 2014 taxation year is as summarized in Table 1 below:

Table 1

Applicants

Income (Monthly - F.M.)

3,500 (rounded)

Other Pension

3,167

Total Income

6,667

Expenses (Monthly)

Mortgage

1,600

Fuel (gas /oil)

100

Hydro/Water

125

Telephone

30

Insurance- House /Car

205

Car Lease

453

Gas

175

Medication

100

Food

600

Transportation

300

Other expenses

2,000

Total Expenses

5,688

Net

979

Asset

Home

885,000

Locked –in RRSP

104,568.90

20J. M. further provided a personal spread sheet, which shows the details of their expenses. This is as shown in Table 2 below:

Table 2

Credit Cards

CIBC Visa

700

The Bay

100

Sears

100

Total

900

900

US Credit Cards

The Bonton

100

JC Penny

100

Macys

100

Total

300

300

F.M.’s Lunch

200

Go Train

300

Gas

100

Total

600

600

Dinners

200

200

Other

Medical

30

Internet

60

Cable

60

Clothing etc.

100

Household cleaning

150

Total

400

400

Grand Total

2400

21The Applicants did not provide any 2014 statements to verify these expenses, except for a CIBC personal bank account statement from October 22 to November 24, 2014. Based on the testimony of J. M., the Board accepted these figures.

22During cross-examination, J. M. further revealed that in 2014, she took a trip to Trinidad where all her family resides.

23J. M. further reiterated to the Board that prior to her depression seven years ago, they had a business and they lost everything and had to borrow money to pay back the debt.

City’s Submissions

24Sean Doyle, on behalf of the City of Mississauga, submits that this application does not qualify as a case of extreme poverty, which is one of the legislative requirements to qualify for relief from paying property taxes. He emphasized that he makes no recommendation to the Board, however, this application does not depict extreme poverty for the following reasons:

a. As provided by the Applicants in Exhibit 1, the total amount for F. M.’s lunch in a month is $200. This is in addition to the extra $200 per month spent by the Applicants for dinners outside the home.

b. The Applicants car lease payment for a Nissan Rogue, which is a fairly new model, is $453.

c. The Applicants have provided as expenses payments made towards US credit cards.

25Mr. Doyle concluded his submission by stating that the Applicants have a duty to save costs.

Board’s Analysis

26The intent of the legislation is to provide relief for property owners who cannot pay their property taxes in full or in part due to sickness or extreme poverty in a given taxation year. Either of these two eligible criteria must exist in order for a property owner to fulfill the first part of the test.

27In this application, the Board must decide if the Applicants are unable to pay all or part of their property taxes due to sickness or extreme poverty. These two eligible criteria not only requires an analysis of the Applicants’ income and expense as provided by the Applicants in Table 1 and 2 above, but also an examination of all financial resources available to the Applicants which can be used to determine if the Applicants could mitigate their tax obligation.

28The Applicants have a total household monthly income of $6,667 and $5,688 as expenses. This gives rise to a net income of $979. The monthly property tax payable on the subject property is $588.55. If this amount is deducted from the net income, the Applicants still have a balance of $390.45. In J. M.’s submission, she provided as part of her expenses a large amount of $2,000, without providing any statements to verify these expenses. The Board accepted this figure. In the Applicants’ spreadsheet of expenses in Table 2 above, they have expenses paid towards US credit cards, her spouse, F. M., has a monthly expense of $200 towards lunch and the Applicants spend an additional $200 monthly on dinners outside the home. The Applicants also have a Nissan Rogue with a monthly lease payment of $453. Furthermore, under cross-examination, J.M. admits that she also travelled on vacation to Trinidad in 2014 to visit her family. The Board determines that these expenses cannot be considered reasonable expenses in a manner to establish “extreme poverty and the Applicants have not adduced sufficient evidence to establish this test.

29Furthermore, the Applicants have substantial equity in the home in the amount of $549,000. In addition to this, F. M. has locked in RRSP in the amount of $104,568.90. J. M., advised the Board that these funds are not be available to them until F. M. is over 70 years old, however, she did not provide evidence of this fact. For application of this sort, the onus is on the Applicants to show that it would not be reasonably possible for them to pay all or part of their property tax. These applications are applications of last resort and the Applicants must have depleted all resources before making such an application.

30The Applicants must demonstrate in their application, that after managing their resources and expenditures, they have no further resources to meet the basic necessities of life in addition to paying all or some of their property taxes.

31All home owners have a primary responsibility to pay their property taxes. The Applicants are both occupants of the home and have as their primary responsibility, the payment of their property tax.

32Based on the reasons stated above, the Applicants have shown that they are not in a state of “extreme poverty” and despite J. M.’s sickness, they are still able to pay all of their property taxes. The Board agrees with the City that this is not a case of “extreme poverty.”

CONCLUSION

33The Board finds that the Applicants did not establish the requirements for the Board to make a finding of extreme poverty and they do not qualify for relief under the Act from paying all or part their property taxes.

34The Board therefore dismisses the Application for the cancellation, reduction or refund of taxes for the taxation year 2014.