A.K. v. City of Toronto, 2016 CanLII 60090

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 7, 2016

FILE NO.: WR 141745

Assessed Person(s): A.K.

Applicant(s): A.K.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): City of Toronto

Roll Number(s): Withheld

Appeal Number(s): 3095830

Taxation Year(s): 2014

Hearing Event No. 633191

Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A

Heard: August 04, 2016 in Toronto, Ontario

APPEARANCES:

Parties

Counsel+/Representative

A.K.

Self-represented

City of Toronto

Georgia Tanner+ and Luis Verastegui

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI

INTRODUCTION

1A.K. (the "Applicant") filed an application with the City of Toronto (the "City") seeking a cancellation, reduction or refund of property taxes for the taxation year 2014.

2The Applicant advised the Assessment Review Board ("Board") that she was able to pay all her property taxes for previous years including the 2014 taxation year however, she is seeking a reduction, cancellation or refund of taxes for 2014 under s. 323.(1)(e) of the City of Toronto Act, 2006 ("Act") due to sickness and/or extreme poverty.

ISSUE

3The issue before the Board is to determine whether the Applicant's property taxes for the taxation year 2014 should be cancelled, reduced or refunded as a result of the Applicant's inability to pay due to sickness or extreme poverty.

DECISION

4The Board finds that based on the evidence before it, the Applicant failed to demonstrate to the satisfaction of the Board that she meets the requirements to make a finding of sickness or extreme poverty in order to qualify for relief under the Act.

5The Board therefore dismisses the application for cancellation, reduction or refund of taxes for the taxation year 2014.

REASONS FOR DECISION

Legislation

6Section 323.(1)(e) of the Act provides:

Upon application to the city treasurer made in accordance with this section, the City 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,

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

7The Act outlines a two part test. In order for the Applicant 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, then the application fails. If either is present, the Applicant must demonstrate an inability to pay all or part of the taxes.

APPLICANT'S EVIDENCE

Sickness

8The Applicant did not claim or present the Board with any evidence regarding sickness. She stated briefly that she encountered emotional turmoil as a result of flood in her house in 2008 but her doctor was retired last year therefore she was unable to provide the Board with a medical report. In this respect, the Board concludes that in the absence of any medical report sickness does not exist and must then consider if the Applicant is unable to pay all or part of her taxes due to extreme poverty.

Extreme Poverty

9The term "extreme poverty" is not defined under the Act. In determining whether the Applicant is in a situation of extreme poverty, the Board has to consider the evidence presented by the Applicant regarding her financial situation, which is not limited to her income and expenses.

Applicant's Evidence

10The Applicant is a 67 year old woman who is a librarian by profession. The Applicant testified that she inherited the house from her parents. In 2008 there was a flood in the basement, the garage and the front yard. As a result, the house was not habitable because of mold and asbestos. She stated that although presently she lives in a rented apartment in downtown Toronto, she has food and clothing in the house. She goes to the house every day, she works there, makes her telephone calls and sleeps there one night a month. Later, she stated that she never sleeps in the house.

11The Applicant stated that in 2007 she took a first mortgage for $190,000 and bought the brother's share of the house. In 2014, she applied for a second mortgage and had access to equity in the amount of $260,000. She received $50,725.

12The Applicant stated that she filed a law suit against an insurance company in 2008 and settled the case with the company by receiving $58,000 in 2010. She paid a part of that money towards apartment rent and bills and dealt with some of the asbestos problems in the house. The Applicant stated further that in 2012, she tried to fix the house but has not been able to complete it up to today.

13The Applicant testified that she has filed the present application seeking relief of taxes to fix the house in order to be able to move in and live there permanently.

14The Applicant stated that since 2015 she has been receiving a Government pension of $18,306 per year but because she did not apply in time (6 months in advance) she was not eligible for it in 2014.

15The Applicant submitted a copy of the Form 1 – Financial Information which shows her monthly income and expenses as detailed hereunder:

Income

Income from work in 2014 $154.16/month

($1,850)

Access to Equity on 2nd mortgage $4,227.13/month

($50,725)

TOTAL $4,381.29/month

Expenses

a. Mortgage $2,759.00

b. Property Taxes $ 294.91

c. Home Insurance $ 121.20

d. Water $ 12.00

e. Heat $ 239.13

f. Hydro $ 80.00

g. Telephone $ 62.43

h. Groceries $ 180.00

i. Household Supplies $ 20.00

j. Transit/TTC $ 122.00

k. Apartment Rent/Hydro

and Catastrophe Insurance $1,247.51

l. Cell Phone $ 12.00

m. Internet $ 28.00

n. Recreation/Entertainment $ 10.00

o. Storage Rent $ 483.00

TOTAL $5,671.18

Assets

Assessed value of the house in 2014 $530,000.00

Balance of Savings Account from March, 2014 to December 2014 $ 12,156.00

Balance in the chequing Account $ 297.00

TOTAL $542,453.00

Liabilities

Student Loans $ 16,990.60

Mortgage $416,000.00

TOTAL $432,990.60

NET TOTAL $109,462.40

16Based on the information submitted in the Form 1 – Financial Information, the net worth of the Applicant is ($542,453.00 minus $432,990.60) $109,462.40.

City's Position

17Ms. G. Tanner, on behalf of the City, 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 and should be dismissed for the following reasons:

• The Board should not accept all the expenses listed by the Applicant in the Financial Information Form for there is insufficient evidence to support the expenses incurred.
• The City has provided the Applicant all the information respecting the requirements of the Board regarding supporting documents by way of four e-mails and one telephone call since 2015 after granting the Applicant two adjournments as well because she was not ready to proceed. (Exhibit 4).
• The student loan for $16,990 should be excluded from the Applicant's list of liabilities in the absence of documentary evidence.
• The extreme poverty cases are for the Applicants who are unable to provide the daily necessities. The Applicant was able to pay all her taxes and bills. She had equity of $109,463 in the home and a bank balance of $12,453 in December 2014.
• The Applicant has been living between two residences and is spending over $3,000 per month to keep the house which is not permanently occupied.
• The City submitted that the Applicant's house is an investment property. However, after the Applicant protested in this regard, the City withdrew the comment in that respect.
• The Applicant's behavior does not indicate that she is living in extreme poverty even if the Board accepts the Applicant's evidence regarding all the expenses.

Board's Analysis

18The test under s. 323(1)(e) of the Act refers to whether the Applicant is unable to pay property taxes due to sickness or extreme poverty.

19The Act qualifies the level of poverty as "extreme" and in the Board's view this raises the level of requirement to qualify for relief under the Act to a level that is materially and substantially above that of the simple and ordinary meaning of poverty. The Board believes that individuals must demonstrate that after having called upon every resource available to them and having explored every reasonable opportunity to mitigate any financial stresses there are no means of being able to pay some or all of their property taxes.

20The Board considered the evidence presented by the Applicant and concludes that sickness does not exist in her case.

21The Board has reviewed all of the evidence pertaining to the financial circumstances of the Applicant to determine whether she is experiencing extreme poverty. The Board is not satisfied that the Applicant's circumstances rise to the level of "extreme poverty" for the following reasons.

22The Applicant did not provide the Board any supporting documents with respect to the expenses she listed in the Form 1- Financial Information for 2014 taxation year except for a copy of Canada Revenue Agency's Notice of Assessment for 2014 taxation year showing $1,850 as her annual income and a copy of the Toronto Dominion Bank statement showing account history dated January 3, 2014 to December 3, 2014 with the balance of $12,156.80. The Applicant stated orally that she also had $297 in her chequing account however she presented no statement for that account. She testified further that she had another account with the Bank of Nova Scotia but they did not provide her a copy of 2014 statement and she was unable to down load it from the computer.

23The Board is not satisfied with the Applicant's testimony that she was unable to get a copy of her account with the Bank of Nova Scotia in 2014. In the absence of documentary evidence, it is unclear to the Board the balance in that account.

24The Applicant was asked why she did not provide the Board with supporting documents regarding her expenses to which she stated that she was not aware of the requirements.

25The Board rejects the Applicant's testimony in this regard and notes from the documentary evidence (Exhibit 4) that the City was in contact with the Applicant by sending her letters and explaining the requirements of the Board, on April 2, 2015, October 19, 2015, April 4, 2016 and July 13, 2016. In addition, the representative for the City testified that one week prior to the hearing, the City contacted the Applicant by calling her and explaining everything regarding the upcoming hearing. The representative for the City stated that two adjournments as well were granted to the Applicant previously because she was not ready to attend the scheduled hearings.

26The Applicant submitted a letter from National Student Loans Service Centre dated January 26, 2016. The letter states that the Applicant's application for the Repayment Assistance Plan for Borrowers with a Permanent Disability has been approved. The revised monthly payment is 0 starting January 1, 2016 to June 30, 2016. It states further that if the Applicant had any due payments from the past, she was responsible for those payments.

27The Board rejects the Applicant's claim of a student loan prior to 2016, in the absence of any supporting document. In fact, in the absence of supporting documents to substantiate all other expenses listed by the Applicant such as, utilities, insurance (home and catastrophe insurance for the apartment), telephone (land and cell phones) and storage rent, the Board assigns no weight to these expenses.

28Furthermore, the Applicant testified that her brother P.K. passed away in 2006 and she had to buy his share of the house in 2007. The City representative, Mr. Verastegui, testified that the Applicant, her father and brother lived in the 2-bedroom detached house with finished basement and a garage. Mr. Verastegui brought to the attention of the Board that according to the evidence Exhibit 2, Tab 4, the Applicant bought the share of her brother before he passed away.

29With respect to the above testimony, the Board notes from the City's Book of Documents Exhibit 2, Tab 6, p. 5, the death of P.K., the Applicant's brother, is listed as January 08, 2001 and the transfer of the house from father to daughter occurred in 1996 (Exhibit 2, Tab 6, p. 8). However, this evidence was not put to the Applicant to receive her possible response in this regard.

30Moreover, the Board is not satisfied with the Applicant's testimony that she was unable to remove the mold and the asbestos from her property since the flood in 2008 having had access to the amount of money that she had in her possession.

31Furthermore, the Board notes that the Applicant did not mention her income of $4,227.13 per month in the Form 1 – Financial Information from mortgaging her house in 2014, until it was brought to the Board's attention and was included under her income by the Counsel for the City.

32The Board agrees with Counsel for the City that even if the Board accepts all the expenses listed by the Applicant, which the Board does not in the absence of supporting documents, considering the Applicant's income and expenses for both properties, the Applicant does not qualify as a person in extreme poverty.

CONCLUSION

33The Board finds that the Applicant, A.K., did not establish the requirements for the Board to make a finding of sickness or extreme poverty in order to qualify for relief under the Act from paying all or part of her property taxes.

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