Toronto (City) v. Monarch Couture Development Ltd., 2017 CanLII 36453

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

June 09, 2017

FILE NO.:

WR 144643

Assessed Person(s):

Philmor (Bloor Walk) Development Corp

Appellant(s):

City of Toronto

Respondent(s):

Monarch Couture Development Ltd.

Respondent(s):

Philmor (Bloor Walk) Development Corp.

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 09

Property Location(s):

600 Jarvis Street (known as 28 Ted Rogers Way)

Municipality(ies):

City of Toronto

Roll Number(s):

1904-068-520-01301-0000

Appeal Number(s):

1952831 and 2004967

Taxation Year(s):

2007 and 2008

Hearing Event No.:

636766

Legislative Authority:

Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

ARB Case Name:

Toronto (City) v. Monarch Couture Development Ltd.

Heard:

December 05, 2016 in Toronto, Ontario

APPEARANCES:

Parties

Counsel

City of Toronto

Christopher Henderson

Monarch Couture Development Ltd.

Risa Sokoloff

MPAC

Donald Mitchell

Philmor (Bloor Walk) Development Corp

No one appeared

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI AND ANTHONY LaREGINA

INTRODUCTION

1This appeal was set for hearing on March 26, 2015. The City of Toronto (“City”) commenced a motion to adjourn the hearing in order to seek productions and discovery against the Respondent, Philmor (Bloor Walk) Development Corp. (“Philmor”), the owner of the subject property for the use of this property as a commercial parking lot for the 2007 and 2008 taxation years. The Assessment Review Board (“Board”) granted this motion and made several orders directing the Respondent to provide disclosure as requested by the City.

2On July 8, 2016, a telephone conference call was held with the parties. The Board was advised that Philmor had sold the subject property to Monarch Couture Development Ltd. (“Monarch”) late in 2007 and that Philmor will no longer be participating in this appeal, although Philmor remained a statutory party entitled to notices. Monarch requested to be added as a Respondent in the proceeding. The parties agreed to submit a procedural order to the Board for authorization and the Board released procedural order 141560 in August 2016 outlining the agreements between the parties.

3MPAC has classified the subject property as multi-residential (MT). The City alleges that a change event occurred shortly after June 30, 2006, which would have given MPAC the authority to change the classification of the subject property. MPAC did not make a supplementary classification or assessment and the tax roll was not altered. The City commenced this appeal seeking a change in the classification of the property from multi-residential (MT) to commercial parking lot (GT) for the 2007 and 2008 taxation years.

4The Current Value Assessment (“CVA”) of the subject property is not in dispute in this appeal, only its classification.

ISSUE

5The issues in this appeal as identified by the parties are:

1. Did a “change event” occur after June 30, 2006 (the classification date) to justify a change in the classification of the subject property from multi-residential (MT) to commercial parking lot (GT) for the 2007 and 2008 taxation years?

2. If the answer to question 1 is “yes,” does the Board have the jurisdiction to change the classification for the 2007 and 2008 taxation years by virtue of s. 40, s. 44 (1), and s. 45 of the Assessment Act (“Act”)?

6Christopher Henderson, counsel for the City, submits that on or about July 2006 until February 2010, the subject property was used as a commercial parking lot and not vacant land, constituting a “change event” within the meaning of the Act. Consequently, the classification of the subject property should be changed from multi-residential (MT) to commercial parking lot (GT) for the 2007 and 2008 taxation years.

7Donald Mitchell, counsel for MPAC, supports the City’s submission and submits that if MPAC failed to make a supplementary classification and the appropriate changes to the assessment roll in 2007, the City has a right to appeal the incorrect classification under s. 40 of the Act and the Board has jurisdiction to change the classification.

8Risa Sokoloff, counsel for Monarch, notes that on the classification date of June 30, 2006, the subject property was vacant land and was not used as a parking lot. She submits that the City has not provided any evidence to prove that the subject property was in use as a commercial parking lot after June 30, 2006.

DECISION

9The Board determines that a change event occurred on or about July 2006 when the use of the subject property changed from vacant land to a commercial parking lot, and that use continued until about February 2010. The Board therefore changes the classification of the subject property from multi-residential (MT) to commercial parking lot (GT) for the 2007 and 2008 taxation years.

REASONS FOR DECISION

Legislation

10Section 19.3 of the Act provides:

19.3 Classification day. – The day as of which land shall be classified for a taxation year is June 30 of the previous year.

11Sections 34.(2) and (4) of the Act provide:

Supplementary classification

(2) If, during the taxation year or the period after June 30 in the preceding taxation year, a change event, within the meaning of subsection (2.2), occurs that would change the class of real property that a parcel of land or a part of such a parcel is in, the assessor may change the classification accordingly, including any subclass, and, upon receiving notice of the change, the clerk of the municipality or, in the case of land in non-municipal territory, the Minister shall enter it on the tax roll and the tax levied for the taxation year shall be determined in accordance with the new classification.

Limitations

(2.1) The following apply with respect to subsection (2):

1. Subsection (2) does not affect the tax levied for the taxation year in respect of a part of the taxation year preceding the change event.

2. Paragraph 1 does not apply to a change event described in clause (c) of the definition of “change event” in subsection (2.2).

“change event”

(2.2) For the purposes of subsections (2) and (2.1),

“change event” includes,

(a) a change in the use of all or part of the parcel of land,

(b) an act or omission that results in all or part of the parcel of land ceasing to be in a class of real property, and

(c) the opting, by a council of a municipality, including an upper-tier municipality, to have a class of real property apply or cease to apply within the municipality.

Changes to next assessment roll

(4) If the assessment corporation makes an assessment or classification under this section, or could have done so but did not, the appropriate changes shall be made on the assessment roll for the next year, even if the day as of which land is valued for the next year is the same as for the current year.

12Section 40 provides:

Appeal to Assessment Review Board

40. (1) 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

13Section 44.(1) provides:

Assessment may be open upon appeal

44. (1) Upon an appeal on any ground against an assessment, the Assessment Review Board or court, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefor may be placed upon the roll, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

14Section 45 provides:

Powers and functions of Assessment Review Board

45. Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purpose of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

EVIDENCE AND ANALYSIS

The City’s Evidence

15The City did not need to lead evidence as it had served a Request to Admit dated August 4, 2016, filed as Exhibit 4, on the Respondents including Monarch, and there were no responses. Technically, under Rule 47 of the Board’s Rules of Practice and Procedure, if there is no response within 21 days after being served with the Request to Admit, the Respondents, including Monarch, are deemed to admit the truth of the fact and the authenticity of the documents set out in the Request to Admit. However, the City chose not to proceed on this basis but to provide evidence to prove its case at the hearing.

16Mr. Henderson submits that from the various documentary evidence included in Exhibit 1, the City’s Book of Documents and the evidence adduced from its four witnesses, there is overwhelming evidence that the subject property was used as a commercial parking lot from early July 2006 to February 2010.

Evidence of Harry Costa

17Mr. Costa was summoned by the City to testify in this appeal. He is a Senior Operations Manager with Impark (Imperial Parking Canada Corporation), a parking lot operator. He has been an employee of Impark since 2001. He testified that in his primary role as a Senior Operations Manager, he is responsible for the lease deals of Impark. He testified that he was personally involved with a lease between Philmor (landlord) and Imperial Parking Canada Corporation (tenant) made on August 1, 2006 in Tab 16 of Exhibit 1. The Board notes that section 1.1 of the lease provides:

…The use of the Premises is limited to use as an outdoor parking lot…

18According to Mr. Costa, as stated in section 2.1 of the lease, the term of the lease was from August 1, 2006 to July 31, 2008, with an option to renew, by the tenant giving a written notice to the Landlord, which will automatically extend the term of the lease. Mr. Costa testified that the lease was renewed until February 2010 and, as evident from the lease, it was signed by Philip Macarz, a Director with Philmor, as shown in Philmor’s Corporation Profile Report in Tab 17 of Exhibit 1.

19Mr. Costa further testified that Impark started its operations as a commercial parking lot on the subject property in July 2006 and from this date it started receiving rental revenue from the parking and paid a flat fee to the landlord and the receipt of the parking rental revenue ceased in March 2010. He specifically stated that Impark received revenue every month after July 2006 although there was an adjustment in the revenue, which went down but never to zero. Mr. Costa also testified that he visited the property and recognized it as seen in the photographs at Tabs 13, 14 and 15 of Exhibit 1 and at Tab 13 there is an Impark sign on the far right of the photograph and there are parking meters on the property for making payments. The Board notes that the dates the photographs were installed in the City’s database as revealed after each photograph, are April 2, 2007, October 17, 2007 and December 12, 2007 respectively.

20Under cross-examination, Mr. Costa admitted that he did not take the photographs. He further emphasized during cross-examination that due to his direct involvement with the lease, he is certain that operations commenced in July 2006 and not 2008.

Evidence of Victor Lukosius

21Mr. Lukosius was also summoned by the City. He has been working as a Senior Environmental Technologist with McClymont & Rak Engineers Inc. for 20 years, a geotechnical and environmental firm that conducted the environmental assessment of the subject property which included the review of previous environmental reports of the property, analysis of bore holes to determine soil conditions, the review of drawings and the conduct of historical research. Mr. Lukosius testified that he has personal knowledge of the subject property. He referred to a report he prepared with another employee who no longer works for the company in Tab 19 of Exhibit 1 - a “Phase 1 Environmental Site Assessment Update” for the subject property dated May 2008 prepared for Monarch. He testified that there was a physical inspection of the property and as of May 2008, it was used as a parking lot as provided in section 1.3 of the report which states:

…A residential redevelopment is proposed for the site. A temporary building for the sales office is situated on the southeastern quadrant of the site. The remaining portion is currently used as a parking lot.

22He further testified that he spoke to Mr. Daniel from Monarch Corporation about the use of the property. The details of his telephone conversation with Mr. Daniel were provided in his notes as Exhibit 5 dated February 26, 2007, which provides that Mr. Daniel stated:

…only eastern portion remains now building demolished and used as a parking lot. (sic)

23Mr. Lukosius further referred to another report at Tab 18 of Exhibit 1- a “Supplemental Geotechnical Investigation Proposed Residential Development (Couture)” dated July 2007, prepared for Monarch. He referred the Board to section 2.0, the site conditions, which provides:

The site of the proposed residential development (Couture) is located at 600 Jarvis Street, in the City of Toronto, Ontario. The subject site is currently used as a parking lot…

24He specifically directed the Board to section 4.0 of this report, which states:

The field work for the geotechnical investigation was carried out during the period of June 19 – 22, 2007...

25Mr. Lukosius also confirmed that when he drove by the subject property sometime between April 2008 and May 2008, he noticed automobiles parked on the subject property.

Evidence of Steve Paterson

26Mr. Paterson is a Municipal Standards Officer with the Municipal Licensing & Standards division of the City of Toronto. He has held this position since 2005. His duties include enforcement of by-laws, licences, zoning and property standards. He investigated a complaint of the operation of a parking lot without a licence on the subject property in early July 2006. He referred the Board to Article 22 of the Toronto Municipal Code, Licensing By-Law, at Tab 12, of Exhibit 1, which confirms that a licence is required to operate a parking lot. He also referred the Board to Tab 9 of Exhibit 1, which is a screen shot from a computerized database called “AMANDA” used by the City to file complaints. This particular complaint was filed on July 4, 2006. In Mr. Paterson’s notes on AMANDA dated August 9, 2006 at Tab 10 of Exhibit 1, he states:

Visited Impark office at 178 Queens Quay E. met with David King the Manager of support services who advised that a application was submitted for a licence for the parking lot. A copy of the application will be faxed to me at the office. (sic)

27He further testified that the application for the operation of a parking lot licence on the subject property was received on September 6, 2006, as seen at Tab 11 of Exhibit 1. He also advised the Board that this application was granted.

Evidence of Sara Baxter

28Ms. Baxter is the Supervisor of the Assessment Review and Analysis section of the Revenue Services division of the City of Toronto and has held this position since 2007. Her duties include making a determination on the commencement of an appeal on incorrect assessment and classification of properties. According to Ms. Baxter, the mandate of this division is to ensure that assessment and classification of properties are reasonable and in order to determine an incorrect classification the unit relies on a classification database called the Integrated Business Management System (“IBMS”). She referred the Board to Tab 7 of Exhibit 1, which is an extract from IBMS, a demolition folder, seeking permission for the demolition of an existing three storey building, made on November 2, 2005 and approved December 5, 2005. She also referred the Board to Tab 8 of Exhibit 1, which are photographs of the subject property from different angles at the demolition stage all created in the database on March 22, 2006 and Tabs 13, 14 and 15 which are photographs of the subject property with parking lot signs created in the City’s database on April 2, 2007, October 17, 2007 and December 12, 2007 as referred to by Mr. Costa. Ms. Baxter also testified that she visited the property on March 20, 2007 and it was a parking lot.

29Ms. Baxter further referred the Board to Tab 20 of Exhibit 1 - an “Application for a Person to Construct or Demolish” made by Jason Chen on behalf of Monarch Corporation, received on December 18, 2008. She testified that this was a permit for “shoring,” – a preparation process for getting ready for excavation to build a 44 storey residential condominium tower and five levels of underground parking. She also testified that prior to this date Monarch did not have the permission to start building the condominium. She referred the Board to Tab 21 of Exhibit 1, an e-mail from Lino Pellicano of Monarch Corporation to Peter Chan, the Manager of Plan Review for the City of Toronto Building Division Toronto and East York District dated April 5, 2010, where Mr. Pellicano states:

…We are hoping to start our shoring at the above noted project in the next few weeks (awaiting Works License)...

30She testified that at Tab 22 of Exhibit 1 there is a Notice of Decision by the City of Toronto for a minor variance/permission under section 45 of the Planning Act regarding the number of dwelling units and a change in height of the subject property. This Decision is dated September 28, 2010 and the last day to appeal the Decision was October 12, 2010. She also referred the Board to Tab 23 of Exhibit 1 which is an agreement between Monarch Couture Development Ltd. and the City of Toronto, dated January 31, 2011, signed by Lino Pellicano for Monarch, applying for a conditional permit to start construction and at Tab 24 of Exhibit 1 there is a letter from the City dated April 15, 2011 to Monarch Construction Limited approving the application for the building of a 42 storey 476-unit residential condominium.

31During cross-examination, Ms. Baxter admitted that she did not personally take any of the photographs and was not a party to the documents presented in evidence by the City.

MPAC’s Position

32Mr. Mitchell submits that a change event occurred sometime shortly after June 30, 2006 in the use of the property from vacant land to parking lot and had MPAC known about this change event it would have issued a supplementary assessment under s. 34 (2) of the Act. MPAC returned the assessment as multi-residential classification for 2007 and the City has a right to appeal the classification as incorrect. Mr. Mitchell stated that the evidence presented by the City clearly shows that a parking lot was in operation sometime after June 30, 2006 and in 2007 and 2008 and that the Board has jurisdiction to determine the correct classification in this appeal. He states that MPAC relies on the City’s submissions that the correct classification for the subject property is commercial parking lot (GT).

Monarch’s Position

33Ms. Sokoloff did not provide any evidence to rebut the evidence presented by the City; however, she maintains that the subject property was not used as a parking lot on June 30, 2006. Furthermore, that the City has not presented any evidence to show that on a balance of probabilities the subject property was used as a parking lot in 2007 and 2008 nor that rent revenue was being received by Philmor. She submits that MPAC missed this assessment and the City’s appeal eight years later is inappropriate. Ms. Sokoloff also submits that MPAC is supposed to be neutral in this appeal.

Analysis

34The Board must first determine if a “change event” occurred, within the meaning of the Act, after the classification date of June 30, 2006. The Board must then determine if it has jurisdiction to change the classification of the subject property.

Did a “change event” occur after June 30, 2006?

35The Act gives the assessor the authority to change the classification of a property if a change event occurs during the taxation year or the period after June 30 in the preceding taxation year. The change event that applies to this appeal is a change in the use of all or part of the subject property after June 30 in the preceding taxation year. The Act further provides that if MPAC could have made the classification and did not, “…the appropriate changes shall be made on the assessment roll for the next year...” Mr. Mitchell admits that MPAC did not make the appropriate change in 2007 the next year and if there was a change event, the assessment roll for the 2007 taxation year is incorrect as it relates to the classification of the subject property. The City appealed the assessments under s. 40 relying on the change event, and the Board has the jurisdiction to determine the correct classification of the subject property.

36In determining whether there was a change in the use of the subject property, the parties must furnish the Board with evidence regarding the activities carried out on the subject property after June 30, 2006, the preceding taxation year. A change in use is a question of fact. The City has presented both documentary and viva voce evidence to assist the Board in making this determination. Ms. Sokoloff submits that the evidence presented by the City does not prove that the subject property was used as a commercial parking lot after June 30, 2006.

37All the parties agree that “on” the classification date, which is June 30, 2006 for the taxation year 2007, the subject property was vacant land. The issue in dispute is whether there was a change in the use of the land after June 30, 2006 that would be a change event within the meaning of the Act. From the evidence adduced at the hearing the Board concludes that on a balance of probabilities it is more likely than not that the subject property was used as a commercial parking lot from July 2006 until February 2010.

38In reaching this determination, the Board considered the following evidence:

a. On November 2, 2005, an application for permission to demolish an existing three storey building, on the subject property was made to the City and was approved December 5, 2005.

b. The photographs of the demolished building on the subject property installed in the City’s database on March 22, 2006 and the photographs of the subject property with Impark parking lot signs and payment meters with some cars parked in parking stalls installed in the City’s database on April 2, 2007, October 17, 2007 and December 12, 2007.

c. A complaint filed on July 4, 2006 with the City for the operation of a parking lot on the subject property without a licence. An application to operate a parking lot licence was received on September 6, 2006 and was granted.

d. Mr. Paterson’s notes dated August 9, 2006 stating that he visited the Impark office and was advised that an application was submitted for a licence for the parking lot, and was granted.

e. A lease agreement between Philmor and Impark from August 1, 2006 to July 31, 2008, extended to February 2010, in which rental income was received every month during the subsistence of the lease.

f. Environmental Assessment reports dated July 2007 and May 2008 both provide the site conditions of the subject property as a parking lot.

g. Mr. Lukosius’s notes taken of a telephone conversation with Mr. Daniel from Monarch Corporation dated February 26, 2007 confirming use of the subject property as a parking lot.

h. An Impark parking sign on the subject property at Tab 14 of Exhibit 1 reads: “This lot will be closed from Sat. Sept, 22nd to Monday Oct, 1st. WE APOLOGIZE FOR ANY INCONVENIENCE.” The date this photograph was installed in the City’s database is October 17, 2007.

i. On December 18, 2008, an Application for a Person to Construct or Demolish by Jason Chen for Monarch Corporation, was received by the City. Prior to this date, Monarch Corporation did not have the permission to start building the condominium.

j. As of April 5, 2010 shoring on the subject property had not commenced as expressed in an e-mail from Lino Pellicano of Monarch Corporation to Peter Chan, the Manager of Plan Review, Building Division Toronto and East York District.

k. On January 31, 2011, an agreement was made between Monarch and the City, for a conditional permit to start construction on the subject property and by a letter dated April 15, 2011, the City approved the application for the building of a 42 storey 476-unit residential condominium.

l. Two witnesses, Ms. Baxter and Mr. Lukosius, visited the subject property in March 2007 and sometime between April and May 2008 respectively, and they both testified it was a parking lot.

39However, Ms. Sokoloff, objects to the City’s evidence on the following basis:

• A lease is not evidence of how land is being used. The lease between Philmor (landlord) and Imperial Parking Canada Corporation (tenant) made on August 1, 2006 proves that there was a binding agreement between the landlord and the tenant for the use of the subject property as a parking lot. The lease being the initiating document shows that there is a contractual relationship between the parties. This is also relevant as it corroborates the testimony of Mr. Costa who was personally involved with this lease. This documentary evidence is material and relevant to the issues in this appeal. Furthermore, Mr. Costa clearly stated in his evidence that the property was used as a parking lot in July 2006 and that Philmor received revenue under the terms of the lease from July 2006 to March 2010.

• None of the witnesses who took the photographs in Exhibit 1 were called to testify and there is no evidence on how the documents after each photograph were created. Furthermore, that the parties to the documents presented by the City were not called to testify, therefore it is hearsay evidence and not admissible. Ms. Sokoloff did not dispute that the photographs at Tabs 8 and 13 through 15 of Exhibit 1 are not photographs of the subject property; her objection is with the admissibility of these photographs by the Board without the testimony of the people who took them. She further referred to Ms. Baxter’s testimony about the documents presented through her by the City as hearsay evidence. Section 15 (1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”) provides:

15. (1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious.

This section reiterates the jurisprudence that tribunals are not bound by the strict rules of evidence as courts; therefore, a tribunal may admit hearsay evidence if relevant to the proceeding. It is self-evident that the photographs presented by the City are relevant to show the state of the subject property at the relevant times. The documents installed in the City’s database after each photograph further reveal the relevant times the photographs were created in the City’s database and also that they were retrieved from the same database. These documents are relevant and there is no limit in their admissibility under the SPPA.

• No one from Philmor was called to testify. Once Monarch was added to the proceeding, it was entitled to take steps to call evidence and to actively defend the appeal. It served the City with a Statement of Response dated August 3, 2016 at Tab 3 of Exhibit 1, indicating it is one of the Respondents in the appeal. Monarch had a choice to call evidence and to call Philmor as a witness to make its case, but failed to do so.

• In Mr. Lukosius’s report, dated May 2008, at Tab 19, page 7, there is no reference to a parking lot at the subject property. Furthermore, how could he state that he drove by in May 2008, on the same day he wrote the report? Section 1.3 of Mr. Lukosius’s report, dated May 2008, at Tab 19 of Exhibit 1 states the site description of the subject property as a “portion is currently used as a parking lot”. Furthermore, Mr. Lukosius testified that he visited the property sometime “between April 2008 and May 2008.” He did not state that he visited the subject property on the day he wrote the report.

• The City filed the appeal to do indirectly what MPAC should have done and the fact that MPAC is at the appeal with the City is inappropriate. The City correctly appealed the assessment of the subject property under s. 40 of the Act.

40In addressing Ms. Sokoloff’s objection that there is no evidence before the Board that the subject property was a parking lot in 2007 and 2008. The Board finds that on a balance of probabilities it is more probable than not that on or about early July 2006, through to February 2010, the subject property was used as a commercial parking lot. Consequently, there was a change event that occurred after June 30, 2006, the preceding taxation year, that changed the use of the subject property from vacant land to parking lot.

Does the Board have jurisdiction to change the classification of the subject property in view of this change event?

41Ms. Sokoloff submits that the City’s appeal is inappropriate, that the City filed the appeal to do indirectly what MPAC should have done directly. Furthermore, that there has been delay in bringing this appeal to the prejudice of Monarch and the unit condominium owners. MPAC did not appeal the error at the relevant time and the unit condominium owners did not have notice of this appeal and will be bound by the decision. She further submits that the Board does not have jurisdiction to change the classification.

42Section 40 of the Act provides the appeal process. It expressly allows “any person, including a municipality…” to appeal to the Board that the current value or the classification of the person’s land or another person’s land is incorrect. The Act explicitly grants municipalities the right to appeal the incorrect CVA or classification of the subject property.

43Mr. Henderson cites the case of Ontrea Inc. v. Municipal Property Assessment Corp., [2008] O.J. No. 4513, 51 M.P.L.R. (4th) 206, 2008 CarswellOnt 6721, 172 A.C.W.S (3d) 287. The issue in this case was whether MPAC could issue a supplementary assessment for a property in 2007 and if this supplementary assessment could have retroactive effect in the preceding taxation year (2006). Where Justice Conway of the Ontario Superior Court of Justice noted that there was no ambiguity with s. 34 (2) of the Act, stating that “the first part of the section addresses when a change event occurs - either in “the taxation year” or the period after June 30 in “the preceding taxation year.” He further states that the intent of both s. 34.(1) and (2) “is that for the changes contemplated in those sections, supplementary assessments can be made for the current taxation year.” Justice Conway emphasized that s. 34.(2) of the Act:

…is neutral in its application. It does not apply only in cases where a reclassification would result in a lower tax ratio to the taxpayer. It could very well apply where a reclassification would result in a higher tax ratio to the taxpayer.

44He further stated that:

The mechanics of the section are clear. The change event giving rise to a reclassification can occur in the current taxation year or after June 30 in the preceding taxation year. The reclassification is made in the current taxation year. This affects the tax roll and the taxes levied for the current taxation year, not the preceding taxation year. It is only the date of occurrence of the change event which extends into a previous taxation year, not the reclassification or adjustment of taxes.

My interpretation of s. 34.(2) is reinforced by a review of s. 34.(1), the section immediately preceding s. 34.(2). That section allows supplementary assessments to be made based on changes in the value or tax status of a property occurring after a notice of assessment has been sent out and before the last day of the taxation year…

…There is nothing in either subsection to suggest that the supplementary assessments can result in a tax adjustment for any preceding year.

45Furthermore, that s. 34.(4) is “prospective in nature”. This decision reiterates the fact as intended by the legislation that an assessor can change the assessment after the classification date and any party can use s. 34.(2) to advance correction.

46Ms. Sokoloff cites the case of Toronto (City) v. Municipal Property Assessment Corp., 2013 ONSC 6137, [2013] O.J. No. 4425; 2013 ONSC 6137; 315 O.A.C. 279; 14 M.P.L.R. (5th) 183; 2013 CarswellOnt 13617, (“Toronto v. Municipal Property Assessment Corp.”), to submit that any ambiguity in the legislation should be interpreted in favour of the taxpayer. This was a stated case presented before the Divisional Court regarding two appeals to determine whether MPAC or the Board had power to change assessed value of property upon its change of status. The facts of the cases were not in dispute. In both cases a portion of the exempt property was sold to a developer. MPAC corrected the assessments from exempt status to being taxable and ascribed current values to the severed portions that are subject to being taxable. There were no physical changes to the buildings. The question was whether MPAC or the Board has jurisdiction to change the assessment of the severed portions at a new market rate simply because the prior CVA for the whole property was too low. In making a determination of the issues raised in these cases, the Court stated:

…property is assessed only once per year and that assessment is final, subject only to appeal. There are, however, some provisions in the Act permitting changes to an assessment during the year, primarily to reflect changes such as improvements to the property or a change in its classification or status. (emphasis added)

47The Court determined that:

Clearly, MPAC had jurisdiction to change the status and owners of the property through supplementary and omitted assessments. The question is whether, at that time, MPAC could also change the assessed current value of the property.

48The Court further determined that neither MPAC nor the Board had this jurisdiction by providing that:

Where the land is no longer exempt, the assessor can issue a further assessment to reflect “the change.” The “change referred to is clearly the change in status. The power to issue a new assessment is restricted only to reflecting that change, nothing more.

MPAC's jurisdiction on an omitted assessment under s. 33(3) is the same as on the supplementary assessment under s. 34(1)(b)(i). In both situations, it is empowered to make whatever changes are necessary to reflect the correction with respect to the exempt status. Its jurisdiction goes no further than that, and in particular, does not include the power to change the current value based solely on a change in opinion as to its correctness.

…If MPAC did not have jurisdiction to adjust the current value in these circumstances, then there is no greater jurisdiction in the ARB or this court on appeal.

49In the Court’s analysis of s. 45, it determined that this section vests in the “ARB all of the powers of MPAC, such that on an appeal from MPAC, the ARB would have all the same powers that MPAC would have had in the first instance.” The court cautions that although “It does not give the ARB any greater powers than that, but neither does it necessarily restrict those powers.”

50In essence, according to Justice Molloy, the Board cannot assume jurisdiction on a matter when MPAC could not have had such jurisdiction in the first instance. The Court specifically determined that:

This provision does not contemplate that the ARB will be a decision-maker in the first instance with respect to assessments, but rather will perform a reviewing function with respect to assessment decisions of MPAC.

51The Court further considered the decision by the Ontario Municipal Board (“OMB”) in Citipark, Re, O.M.B.D. No. 1625, 1993 CarswellOnt 4849 (O.M.B.), in which the OMB considered the application of s. 44.(1) of the Act, similar to s. 45 and it determined that:

…it is clear that the legislation does not intend to confer upon the appellate tribunal powers and functions that go beyond those which the assessor has, unless such powers and functions are specifically established in the legislation.

52This case is distinguishable from the current appeal. In Toronto v. Municipal Property Assessment Corp., supra, the City wanted the Board to assume jurisdiction on what MPAC could not do in the first instance. Using the words of Justice Molloy it wanted the Board to be “a decision-maker in the first instance.” The court further emphasized that “There is no basis in the legislative scheme to support a conclusion that the ARB should have a broader jurisdiction than MPAC in situations of omitted or supplementary assessments.” In this appeal the City wants the Board to do what MPAC had jurisdiction to do under s. 34.(4) of the Act, but did not do, by virtue of s. 40, s. 44.(1), and s. 45 of the Act. Does this go beyond the powers that an assessor has? Does this go beyond the powers of MPAC? Using the words of Justice Molloy in Toronto v. Municipal Property Assessment Corp., supra, would the City be obtaining indirectly from the Board “relief which was not available from the body designated by the legislature as responsible for assessing current values”? The Board determines that this answer is in the negative. MPAC could have changed the classification of the subject property in the year of change (2006) or the next year (2007) but for whatever reason did not. The Court determined in Toronto v. Municipal Property Assessment Corp., supra that:

Since MPAC has no jurisdiction to amend the current value under s. 33.(3) or 34(1)(b)(i) in the absence of a physical change to the property, the same is true for the ARB.

53Consequently, in this appeal, MPAC was empowered by the Act to change the classification of the subject property upon establishing a change event. Although MPAC did not do so, the Board has that power because MPAC had that power in the first instance.

54With respect to Ms. Sokoloff’s submission on any ambiguity in the statute should be resolved in favour of the taxpayer, the Board finds that regarding sections 34, 40, 41 and 45, there is no ambiguity and any potential ambiguity has been addressed by the court in its decision in Toronto v. Municipal Property Assessment Corp., (supra) which she provided to the Board.

55Ms. Sokoloff further cites the case of Chestnut Park Hospitality Inc. v. Municipal Property Assessment Corp., Region No. 9 [2016] O.A.R.B.D. No 68; 88 O.M.B.R. 483; 2016 CarswellOnt 4753, (“Chestnut Park”), as authority that the unreasonable length of time taken by the City in this appeal had prejudiced Monarch. In Chestnut Park, the Appellants (the moving parties) made a motion for an order to cancel the improper re-instatement of appeals that were withdrawn two and a half years previous, on grounds of lack of jurisdiction, natural justice, procedural fairness, error of law, unreasonable exercise of discretion and severe prejudice. The counsel for Chestnut Park Hospitality Inc. argued that according to the SPPA, a review should take place “within a “reasonable time” after the decision is made”; that the new owner, Chestnut Park Hospitality Inc. will be responsible for the tax consequences of any assessment increase, which would result in litigation with the previous owner; that the parties had relied upon “a clear tax certificate, a paid-up tax account status and the finality of the withdrawal decision, and both parties would be severely prejudiced by permitting the re-instatement to stand.”

56The Board determined that:

The withdrawal of the original appeals was an administrative error by the Board, but the re-instatement of the appeals after an unreasonable length of time without notice, submissions or reasons was an error of law and a denial of natural justice.”

57Specifically the Board determined that:

Errors or miscues by the Board and others, affecting the finality of the roll and the fairness of the system would cause sufficient prejudice to the new owners who would be subject to legal liability to pay the property taxes for three years on a property they did not own. That prospect outweighs the generally desirable goal of getting the assessment correct and the integrity of the roll.

58This matter is also factually distinguishable from the matter under appeal. In addressing the issue of delay and finality of decisions, none of the parties in this appeal had made any withdrawal of this matter. This appeal was commenced by the City on its merits in 2007. Both parties had the responsibility of moving this appeal forward to a full hearing. As the Board determined at paragraph 43 in its disposition of the City’s motion for production and discovery, issued January 8, 2016 (Toronto (City) v. Philmor (Bloor Walk) Development Corp., 2016 CarswellOnt 277, [2016] O.A.R.B.D. No. 1, 87 P.M.B.R. 118):

There is no doubt that both counsel were operating under a misconception of the facts not being in dispute. For appeals of this magnitude, and with the experience of both counsel, one would expect that the issues and facts in this matter would have been clearly expressed rather than leaving it to an implied interpretation of the parties’ intentions.

59There is no prejudicial delay in this appeal.

60Ms. Sokoloff also argues about the tax consequences of this appeal, submitting that the condominium unit owners will be liable for the taxes if Monarch does not pay. As correctly submitted by Mr. Henderson, this is not a tax appeal, the unit owners can come before the Board by filing an appeal to have their day in court, as the condominium owners did in Toronto (City) v. Arcadia Group [2007] O.A.R.B.D. No. 409; 56 O.M.B.R. 187. This is further supported by Mr. Henderson’s submission of Topolay v. Ontario Property Assessment Corp., Region No. 15 [2000] O.A.R.B.D. No.801, where Member Campbell correctly determined that the classification of the subject property was industrial and that the tax consequences was a matter to be dealt with by the municipality.

61As clearly provided by the legislation, and interpreted by the case law, the City had the right to commence this appeal. MPAC was empowered to issue a supplementary classification but it did not. Consequently, the Board has the jurisdiction to make this classification change, in order that the overall goal of fairness in taxation is achieved amongst taxpayers.

CONCLUSION

62A change event occurred after the classification date of June 30, 2006. On or about July 2006, through to February 2010, the subject property was used as a commercial parking lot and Impark received rental revenue from that parking lot until March 2010. MPAC failed to make a supplementary classification, but the Board has jurisdiction to change the classification of the subject property to reflect its use because MPAC had the legislative authority to do so. The Board corrects the error and changes the classification of the subject property under s. 40.(1), s. 44.(1) and s. 45 of the Act from multi-residential (MT) to commercial parking lot (GT) for the 2007 and 2008 taxation years.