Municipal Property Assessment Corporation (“MPAC”) Region 05 v. Samuel Springer & Sons Properties Limited, 2016 CanLII 48801

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 27, 2016

FILE NO.: DM 141092

Moving Party: Municipal Property Assessment Corporation (“MPAC”) Region 05

Respondents: Samuel Springer & Sons Properties Limited, Counter Corporation Inc. and Kingston Terminal Properties Limited

Respondent: City of Kingston

Property Locations: 304-316 Bagot Street, 1111 Princess Street, and 1648 Bath Road

Municipality: City of Kingston

Roll Numbers: 1011-030-080-09900-0000, 1011-060-080-40000-0000, and 1011-080-180-03200-0000

Appeal Numbers: 3145599, 3073132, 3018211, 2973289, 3145546, 3073133, 3018158, 2980849, 3145687, 3073135, 3018045, and 2971504

Taxation Years: 2013, 2014, 2015 and 2016

Hearing Event No.: 627876

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended; and Rule 56 of the Assessment Review Board’s Rules of Practice and Procedure.

Heard: June 17, 2016 in Kingston, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
MPAC	Marc McLaren-Caux⁺
Samuel Springer & Sons Properties Limited and Kingston Terminal Properties Limited	Peter Radley, Q.C.⁺
City of Kingston	Maureen Peterson

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH AND MARILYN SHARMA

Introduction

1MPAC is seeking an order requiring Samuel Springer & Sons Properties Limited and Kingston Terminal Properties Limited (collectively “Springer”) to produce all lease documents in their possession or control related to the properties before us during the fiscal years ending in 2011, 2012, and 2013. MPAC also seeks the production of leases for any subsequent tenancies of the properties.

2Springer opposes the Motion on the grounds that MPAC has all of the relevant information from the leases at issue. They assert that any relevant information was produced in the questionnaires sent by MPAC, which were completed in accordance with s. 11(2) of the Assessment Act, R.S.O. 1990, c. A. 31 (“Act”). Springer also suggested confidentiality concerns without providing any evidence of the harms, or any suggested measures to mitigate that harm. Finally, Springer argued that there was no statutory authority for the production order MPAC is seeking.

Disposition

3For the reasons set out below, we grant MPAC’s Motion. We order that Springer produce all lease documents in their possession or control related to the properties before us during the fiscal years ending in 2011, 2012, and 2013 and leases for any subsequent tenancies of those properties. Springer will provide copies of those documents to MPAC, through its solicitor, within 30 days of the release of these reasons. The parties must schedule a Telephone Conference Call (“TCC”) with the Assessment Review Board (“Board”), to be held within 60 days of the release of these reasons.

Legislation

4Rules 54 and 56 of the Board’s Rules of Practice and Procedure state:

54. The Board may order that any document filed with an application or at a hearing be treated as confidential, be sealed and not form part of the public record.

56(1) The Board may grant an order for discovery where needed for a party to obtain necessary information from another party. This will only be granted where the party has requested the information and it has been refused, or no answer was received. This order must be requested by notice of motion, together with an affidavit, which sets out the efforts made to obtain the desired information, and the reasons why the requested information is needed. The Board may make an order for:

(a) any person (usually only a party) to provide an affidavit containing a list of relevant documents which that person possesses;

(b) the delivery of documents;

(c) the examination for discovery of any party;

(d) an examination for discovery by written questions;

(e) the inspection, photographing and testing of property;

(f) the examination of a witness before the commencement of a proceeding (under the Rules of Civil Procedure); or

(g) any other form of discovery.

(2) The Board may impose conditions concerning the timing, manner and scope of discovery; no party shall, in conducting oral examinations for discovery exceed a total of 2 hours of examination, regardless of the number of parties or other persons to be examined except with leave of the Board. If an order for discovery is obtained, the Rules of Civil Procedure concerning discovery will guide Board proceedings unless the Board orders otherwise.

5Section 5.4 of the Statutory Powers Procedure Act, R.S.O. 1990, c. s. 22, states:

5.4(1) If the tribunal’s rules made under section 25.1 deal with disclosure, the tribunal may, at any stage of the proceeding before all hearings are complete, make orders for,

(a) the exchange of documents;

(b) the oral or written examination of a party;

(c) the exchange of witness statements and reports of expert witnesses;

(d) the provision of particulars;

(e) any other form of disclosure.

(1.1) The tribunal’s power to make orders for disclosure is subject to any other Act or regulation that applies to the proceeding.

(2) Subsection (1) does not authorize the making of an order requiring disclosure of privileged information.

6Sections 11 and 40(17) of the Assessment Act, R.S.O. 1990, c. A. 31, state:

11(1) For any purpose relating to the assessment of land, the assessment corporation may, by letter sent by mail, served personally or delivered by courier, require a person who is or may be assessed in respect of the land to provide any information or produce any document relating to the assessment of land within such reasonable time as is set out in the letter.

(2) A person who receives a letter under subsection (1) shall, within the time set out in the letter, provide to the assessment corporation all the information required that is within the person’s knowledge and produce all the documents required that are within the person’s possession or control.

40(17) 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.

Law

7This Board has developed clear jurisprudence on motions for production pursuant to Rule 56 of the Board’s Rules of Practice and Procedure. The party seeking production bears the onus of demonstrating that the documents or information sought has a “semblance of relevance” to the issues in the appeals, Municipal Property Assessment Corporation, Region No. 3 v. Via Rail Canada Inc. [2013] O.A.R.B.D. No. 291 at para. 16, citing Municipal Property Assessment Corporation, Region No. 27 et al, v. Ontario Lottery and Gaming Corporation (15 September 2006), (Unreported) (Board File No. DM 51730). The Board has the authority to grant a broad range of disclosure or discovery and can impose conditions if required, pursuant to Rule 56, enacted in accordance with the Statutory Powers Procedure Act, R.S.O. 1990, c. s. 22, s. 5.4. The only precondition in Rule 56(1) is that a request has been made and denied. That condition is met here.

8Confidential information is not protected from production orders, ADESA Corp., v. Bob Dickenson Auction Service Ltd. 2004 CanLII 45491 (ON SC), [2004], O.J. No 4925; 73 O.R. (3d) 787 at para. 46. Any concerns related to the release of confidential information are properly dealt with through conditions in a production order, see Rule 54 of the Board’s Rules and, Enterprise Rent-A-Car Canada Ltd. v. Municipal Property Assessment Corp., Region No. 15 [2015] O.A.R.B.D. No. 321. The only form of information protected from production orders is privileged information, Statutory Powers Procedure Act, s. 5.4(2).

9These provisions provide us with a clear statutory authority to consider MPAC’s production request. Springer took the position that MPAC needed specific authority to request the production of leases. We do not agree. The statutory authority for Rule 56 production orders is firmly grounded in s. 5.4 of the Statutory Powers Procedure Act, and that Rule applies equally to all parties before this Board.

Analysis

10The properties before us are income producing properties rented to multiple tenants. Both MPAC and Springer are approaching the valuation problem with the income approach to value. An income approach is based on the income that a property can produce, which is nearly exclusively generated through leases.

11Springer did not dispute that the leases have a “semblance of relevance” to the valuation issue. Rather, Springer argued that MPAC did not need the leases in order to value the properties. They asserted that the rents, and other relevant information from the leases, had been provided to MPAC in the statutory forms they have submitted. Their position is that it is unnecessary for MPAC to have the source documents, since they have Springer’s summary of the contents of those documents.

12The jurisprudence of this Board is clear that a party seeking the production of documents does not need to demonstrate that it is necessary for certain calculations. Rather, the test that has developed is that the party must demonstrate that the documents have a “semblance of relevance” to the appeals. The leases here clearly meet that standard. The information contained in the leases is an essential element in an effective use of the income approach to value.

13Further, MPAC has demonstrated that the leases are necessary to clarify ambiguities in the information that has been provided by Springer. They point out that there is an inconsistency between the information provided in the statutory questionnaires and the information set out in the appraisal provided by Springer. For instance, the terms of certain leases do not match between the two documents. It is also unclear which expenses are borne by which party to the various leases, which impacts the ultimate valuation. It is, no doubt, difficult to value a property when that basic information is unclear.

14Springer argues that MPAC can raise those inconsistencies at the hearing of the appeals, through MPAC’s cross-examination of Springer’s appraiser. While that may be an option open to MPAC if it is attempting to impugn the appraiser’s credibility, such a process does not aid MPAC in ensuring a correct assessment, and it bears the burden of proof of proving its valuation is correct, Assessment Act, s. 40(17). We know of no principle that would limit the production of documents on the basis that a witness could be examined at trial. We are not prepared to make such a finding.

15Springer also asserted some confidentiality in the leases. No specific evidence was led as to the nature of the confidential information or what harm would come from producing the leases. Nor did Springer suggest any conditions that could be imposed to protect that information, despite being given an explicit opportunity to do so at the hearing. We have no evidence to support any assertion that the production of the leases would harm Springer or any other party. If there is any such harm, we were not presented with any proposed conditions that might mitigate the harm. As a result, we do not have any basis on which to impose conditions on the production of the leases.

16MPAC sought an additional order that the appeals be dismissed if the documents are not produced within the specified time. We are not prepared to grant such an order. We were not presented with any evidence that Springer has failed to comply with previous orders of this Board. We trust that Springer will diligently comply with this order, as it was their evidence that they deal with MPAC in an open and cooperative manner. If there are compliance issues, they can be addressed at the next TCC related to these appeals.

17We order that Springer produce all lease documents in their possession or control related to the properties before us during the fiscal years ending in 2011, 2012, and 2013 and leases for any subsequent tenancies of the properties. Springer will provide copies of those documents to MPAC, through its solicitor, within 30 days of the release of these reasons. The parties must schedule a TCC with the Board, to be held within 60 days of the release of these reasons.