Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 08, 2016

FILE NO.: WR 143042

Assessed Person(s): Ajax Estates Holdings Ltd.

Appellant(s): Ajax Estates Holdings Ltd

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 13

Respondent(s): Town of Ajax

Property Location(s): 251 Station Street

Municipality(ies): Town of Ajax

Roll Number(s): 1805-030-007-17900-0000

Appeal Number(s): 3122752, 3094751 and 3150510

Taxation Year(s): 2014, 2015 and 2016

Hearing Event No.: 635302

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended and subsection 357.(8), of the Municipal Act, S.O. 2001, c. 25, as amended

Heard: September 28, 2016 in Ajax, Ontario

APPEARANCES:

Parties	Representative
Ajax Estates Holdings Ltd.	Chris Ratnasingham
MPAC	Peter Svistunovs
Town of Ajax	Susan Hewlett

DECISION OF THE BOARD DELIVERED BY SONIA LIGHT

ISSUE

1The subject property is currently leased to a tenant for storage, distribution and warehousing of goods pursuant to a lease effective June 1, 2015.

2The previous tenant leased the subject property consisting of a total gross floor area of about 43,000 square feet for manufacturing purposes including about 4,000 square feet for office space. The previous tenant moved out of the subject property by March 31, 2013 at which point the owners took possession of the subject property and used a small portion of approximately 1,000 square feet to store its heavy landscaping equipment including equipment, trucks and commercial vehicles.

3Ajax Estates Holdings Ltd.(the “Appellant”) has appealed the tax classification of the subject property for the 2015 and 2016 taxation years arguing that the classification should properly be designated as Commercial (CT) rather than Industrial (IT) for the 2015 and 2016 years.

4The Appellant is also claiming that it is entitled to a cancellation, reduction or refund of municipal taxes for the 2014 taxation year on the basis that it was overcharged due to a gross or manifest error that is clerical or factual in nature as a result of the property being misclassified as IT rather than CT.

5The Assessment Review Board (“Board”) must determine whether or not the IT classification of the subject property for the 2015 and 2016 taxation years is correct and if not determine the correct classification and if there was a gross or manifest error that is clerical or factual in nature in the 2014 assessment roll due to the subject property being misclassified as IT, entitling the Appellant to a cancellation, reduction or refund of municipal taxes for the 2014 taxation year.

DECISION

6For the reasons stated below the Board finds that the subject property should be classified as CT for both the 2015 and 2016 taxation years.

7The Board finds that the classification of IT found on the 2014 assessment roll respecting the subject property is not a gross or manifest error that is clerical or factual in nature. Accordingly, the Appellant’s application under s. 357.(8) for the cancellation, reduction or refund of municipal taxes respecting the 2014 taxation year, is dismissed.

REASONS FOR DECISION

Legislation

8Section 40.(1) (a) iv) of the Assessment Act (“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,

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

9Section 40.(19) of the Act states:

Board to make determination

(19) After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

10Ontario Regulation 282/98 states:

15. (1) This section applies to land if all of the following conditions are satisfied:

16. A building or structure has been built on the land.

17. All or part of the building or structure was used in the past.

18. No part of the building or structure is currently being used.

(2) If the building or structure is substantially usable, the land is classified in the property class or classes in which it was classified for the previous taxation year.

11Section 357.(1)(f) and (8) of the Municipal Act, 2001 states:

Cancellation, reduction, refund of taxes

357. (1) 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,

(f) a person was overcharged due to a gross or manifest error that is clerical or factual in nature, including the transposition of figures, a typographical error or similar error but not an error in judgment in assessing the property; or

Where no decision

(8) If council fails to make its decision by September 30 of the year following the year in respect of which the application is made, an applicant may appeal to the Assessment Review Board by October 21 of the year by filing a notice of appeal with the registrar of the board and the appeal shall be a new hearing.

Analysis

12Peter Svistunovs is a Property Valuation Analyst with MPAC. He testified that MPAC is satisfied that the subject property should be classified as CT since June 1, 2015 when the current lease to use the subject property for storage, distribution and warehousing took effect. However, in his opinion, Ontario Regulation 282/98 would apply to the period between 2013 when the previous tenant left and June 2015 when the current tenancy commenced. He believes that this period is governed by s, 15(1) and (2) of that regulation. It is his view that the subject property was substantially vacant because only a small portion of 1,000 square feet was used by the Appellant for its own convenience for limited storage purposes and therefore the subject property retains its classification for the previous taxation year pursuant to the regulation.

13The representative for the Appellant, Chris Ratnasingham called Deborah Rollich, a manager for the Appellant for the past 11 years to testify that since the previous industrial tenant vacated the subject property at the end of March 2013, a portion of around 1,000 square feet of the subject property has been used by property management for storage of landscaping equipment. Therefore, the representative for the Appellant argues that the use of the subject property changed in April 2013 from IT to CT since storage would be a commercial use.

14The Board has reviewed s. 15 of Ontario Regulation 282/98 and determined that this section does not apply in the current situation as argued by the representative for MPAC. The building was used for storage by the Appellant after the previous tenant vacated the building at the end of March, 2013 and therefore was not completely unused, as required by the provisions of that section in order for the previous IT classification to continue. Therefore, the Board finds that the CT designation would have started April 1, 2013. However, the Appellant did not appeal the IT classification in 2014 and the Board has jurisdiction respecting the 2015 and 2016 assessments only.

15Mr. Ratnasingham also argued that the IT classification for the 2014 taxation year is a gross or manifest error that is clerical or factual in nature and the Appellant is therefore entitled to a cancellation, reduction or refund of municipal taxes resulting from the IT classification. He argued that MPAC made a factual error in finding that the subject property should be classified as IT. However, the Board does not accept this argument and finds that a determination of whether a property should be classified as industrial or commercial is a matter of judgment and therefore an error in this determination would not be a factual error. Furthermore, the interpretation of s. 15 of Ontario Regulation 282/98 and its applicability to the subject property requires the exercise of some judgment and is not simply a factual matter.

16Accordingly, the Board finds that the appeals respecting the classification of the subject property for the 2015 and 2016 taxation years are granted and the respective classifications are changed from IT to CT for both years.

17However, the application for the cancellation, reduction or refund of municipal taxes for the 2014 taxation year is dismissed because the classification as shown on the assessment roll was based on the judgment of the assessor and was not simply a result of a factual error.