Vanzuylen v. Municipal Property Assessment Corporation, 2017 CanLII 46022

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: July 14, 2017

FILE NO.: WRC 2017M1

Assessed Person(s): Lorraine Valentine Vanzuylen, Hendrikus Jacobus Vanzuylen

Applicant(s): Lorraine Valentine Vanzuylen, Hendrikus Jacobus Vanzuylen

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 5

Respondent(s): Township of Loyalist

Property Location(s): 4868 Bath Road

Municipality(ies): Township of Loyalist

Roll Number(s): 1104-010-080-17610-0000

Appeal Number(s): 2941459, 2941460, 3134956, 3134957, 3130056 and 3145668

Taxation Year(s): 2012, 2013, 2014, 2015 and 2016

Hearing Event No.: 539453, 561593 and 620037

Legislative Authority: Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: By written submission

DECISION OF THE BOARD DELIVERED BY PAUL MULDOON

1Lorraine Valentine and Hendrikus Jacobus Vanzuylen (“the Vanzuylens”) seek costs of $17,215.54 against MPAC.

BACKGROUND

2The Vanzuylens request for costs arises out of two hearings and a rehearing following a successful request for review before the Assessment Review Board (the “Board) in respect of the property at 4868 Bath Road (the “subject property”). Hearings were held concerning appeals made under sections 34 and 40 of the Assessment Act (the “Act”) for the 2012 taxation year, under section 40 of the Act for the 2013 and 2014 taxation years, and a rehearing of the section 40 appeals for the 2013 and 2014 taxation years and deemed section 40 appeals for the 2015 and 2016 taxation years following a successful request for review by the Vanzuylens.

3The first proceeding, heard in February 2013, concerned a section 34 supplementary assessment appeal regarding the value of a newly constructed house and a section 40 appeal regarding the subject property’s land value for the 2012 taxation year. The Board confirmed the value of the land at $104,000 and reduced the supplementary assessment from $1,431,000 to $824,000 (WR 118542).

4The second proceeding, heard in March and May 2014, concerned two section 40 appeals for the 2013 and 2014 taxation years. The Board confirmed the value suggested by MPAC and reduced the assessment of the subject property from $1,912,000 to $1,601,000 (WR 125792).

5In March 2015, the Vanzuylens filed a request for review of the Board’s decision arising from the second proceeding (WR 125792). The request for review was filed late due to Ms. Vanzuylen’s health and the Board exercised its discretion to accept a late filing. The Vanzuylen’s request for review was granted and the Board ordered a rehearing for the section 40 appeals for the 2013 and 2014 taxation years. The Board found the current value of the subject property as of the valuation date of January 1, 2012 to be $1,180,000.

6The Vanzuylens communicated their intention to seek costs against MPAC on October 3, 2016 and sought direction from the Board. The Vanzuylens filed their formal costs request against MPAC for $17,215.54 on January 23, 2017. The Board sought submissions from MPAC and received them on March 24, 2017.

Relevant Legislation and Rules

7Section 17.1 of the Statutory Powers Procedure Act, R.S.O 1990, c S.22, (the “SPPA”) provides that a tribunal shall not make an order to pay costs unless the conduct or course of conduct of a party has been unreasonable, frivolous or vexation or a party has acted in bad faith.

8Pursuant to section 17.1(4), the Board has made rules with respect to the ordering of costs and the circumstances in which costs may be ordered.

9The Board’s rules respecting costs are set out in Rules 133 to 139 of the Board’s Rules of Practice and Procedure (the “Rules”).

10Rules 137 to 139 of the Board’s Rules state:

137. Considerations by the Board

The Board in determining whether a party has acted unreasonably, frivolously, vexatiously, or in bad faith shall consider all of the circumstances, including, without limiting the generality of the foregoing:

(a) a party failing to attend a hearing before the Board or to send a representative when properly given notice, without contacting the Board and other parties to the hearing;

(b) a party failing to comply in a timely manner with a Procedural Order, case or appeal(s) management plan or direction of the Board where the result therefrom is undue prejudice or delay to another party or parties in the proceedings before the Board;

(c) a party failing to comply in a timely manner with the disclosure or discovery requirements set out in the Board’s Rules of Practice or order or direction of the Board, including, without limiting the generality of the foregoing, the disclosure requirements respecting documents, particulars, or constitutional issues, provisions of responses to undertakings given on discovery including document disclosure; or

(d) a party knowingly presenting false or misleading evidence.

138. When Costs may be Awarded

Where the Board finds that a party has acted unreasonably, frivolously, vexatiously, or in bad faith, the Board may order that party to pay the costs of another party or parties to the proceedings subject to Rule 139 respecting the amount of costs that may be ordered.

139. Amount of Costs Awards

Where the Board determines that an order for costs may be made under Rules 133 to 138:

(a) the Board when determining the appropriate award of costs shall consider all the circumstances, including without limiting the generality of the foregoing, factors such as the seriousness of the misconduct, the amount of costs incurred by the party requesting costs, the conduct of the party requesting costs and offers to settle; and

(b) the amount of costs shall not exceed the sum of $1500.00 per day or up to $750.00 for each half day or less.

Submissions

The Vanzuylen’s Submissions

11The Vanzuylens submit that MPAC acted unreasonably, frivolously, vexatiously, and in bad faith with regard to their hearings and request for review.

12The Vanzuylens base their request for costs on the following grounds regarding MPAC’s conduct, which they claim led to their excess legal costs. They claim MPAC unreasonably and vexatiously ignored positive proof provided by factual documents, surveys, and two qualified and independent appraiser’s reports. They claim MPAC’s refusal to consider or accept the appraisal reports, its failure to negotiate in light of the appraisal reports, and its lack of concern regarding necessary corrections to the assessment of the subject property amounted to frivolous and vexatious behaviour. They claim MPAC’s witnesses, specifically Ms. Corsi, presented false or misleading evidence to the Board. They claim MPAC employees, Ms. Poulain and Mr. Bresee, attempted to discourage them from having their case heard by the Board.

13The Vanzuylens submit that MPAC’s conduct resulted in excess legal costs for them and request a costs award of $17,215.54 against MPAC.

MPAC’s Submissions

14MPAC submits that it attended all hearing events, complied with all orders or directions of the Board, and complied with the Board’s disclosure requirements. MPAC also submits that it did not knowingly presented false or misleading evidence, request extensions or adjournments, or object either to late filing of evidence or requests to confirm data regarding the subject property.

15MPAC responds to the Vanzuylen’s claim that it ignored appraisal reports and other factual documents, by submitting that it considered the Vanzuylen’s documents but the documents did not resolve the disagreement between the parties due to the unique nature of the property. MPAC further submits the appraisal reports are based upon the appraisers’ opinions of value and MPAC is not required to accept this evidence.

16With regard to the correction of potential errors in the assessment of the subject property, MPAC submits its concern for the accuracy of the assessment is illustrated by the numerous corrections it made including correcting the proportion of the swamp land area, re-measuring the subject property, and other corrections to the effective frontage, depth, waterfront versus non-waterfront, and market adjustments. MPAC submits these corrections were made following discussions with the Vanzuylens, the request for reconsideration process, and as a result of three inspections.

17In response to the Vanzuylen’s claim that MPAC refused to negotiate, MPAC submits that there is no requirement that a party to negotiate and failing to negotiate is not unreasonable or evidence of bad faith. MPAC further submits it in fact did negotiate with the Vanzuylens by making settlement offers and responding to the issues raised by the Vanzuylens. MPAC provides an email explaining its position regarding the assessment of the subject property addressed to the Vanzuylens from Mr. Bresee, the MPAC manager responsible for the area encompassing the subject property, dated November 10, 2015.

18The Vanzuylen’s claim Ms. Corsi’s testimony indicating the Vanzuylens owned the lakeshore which would add substantial value to the subject property amounts to false or misleading testimony. On cross-examination Ms. Corsi indicated that the Vanzuylens did not own the lakeshore. MPAC submits that Ms. Corsi clarified her remark by stating “no one owns the lakeshore, but the Vanzuylens have ‘use and enjoyment’ of the waterfront.”

19In response to the Vanzuylen’s claim MPAC employees attempted to discourage them from proceeding before the Board, MPAC submits that its employees met and contacted the Vanzuylens on several occasions but did not at any time attempt to discourage them from attending Board hearings.

Discussion and Analysis

20As with all costs applications, the starting point for the determination of whether costs should be awarded is Rule 137. Essentially, costs are only awarded when a party acted unreasonably, frivolously, vexatiously, or in bad faith. This language emanates from section 17.1 of the SPPA.

21In this manner, the Vanzuylens submit costs should be awarded because MPAC’s conduct was unreasonable, frivolous, vexatious, and carried on in bad faith examples of which are: MPAC ignored factual documents, MPAC failed to negotiate, MPAC did not have concern regarding the accuracy of the assessment of the subject property, MPAC witnesses and employees provided false or misleading evidence, and MPAC attempted to discourage them from having their matter heard by the Board.

22The Board will not make a costs award in this case. Generally speaking, costs are only awarded in exceptional circumstances where the threshold set out in Rule 137 is met. MPAC’s conduct in this matter does not approach the threshold contemplated by Rule 137. Exceptional circumstances are a high threshold and this case does not meet the threshold. The conduct in question must appear unreasonable to an objective third party not only to the party involved. As a general rule, an error does not attract costs.

23While the Vanzuylen’s proceedings before the Board lasted for five years, it is important to note that the appeals spanned two taxation cycles and, more importantly, the subject property is a unique property. MPAC did not cause any delays by requesting adjournments, failing to follow the Board’s directions, failing to appear, filing motions, or contesting the Vanzuylen’s motions, or by any other means. MPAC is not required to accept and rely on evidence provided by other parties. Nor is MPAC required to negotiate with assessed persons, although the Board always encourages such practices. MPAC’s duty is to assess properties and to defend its assessment before the Board. While there were differences of opinion regarding the current value of the subject property as of the January 1, 2012 valuation date, this does not amount to unreasonable, frivolous, or vexatious behavior. The evidence before the Board suggests MPAC carried out its duty and communicated with the Vanzuylens throughout the process.

24While the Board takes allegations of misleading or false evidence and intimidation by MPAC employees very seriously, there is simply insufficient evidence to make a finding that either of these contraventions occurred in this case. Regarding the lakeshore or waterfront issue the subject property is described throughout the three decisions of the Board as having a waterfront location or water frontage on Lake Ontario. Regarding alleged intimidating or threatening behaviour by MPAC employees with respect to the merit of the Vanzuylen’s case MPAC denies this claim and indicates that Mr. Bresee as manager met with the Vanzuylens twice to discuss their concerns with the assessment of the subject property.

25The fact that MPAC regularly communicated with the Vanzuylens, made numerous corrections to its records for of the subject property, and consented to the Vanzuylen’s requests to file late evidence and requests to confirm data on the subject property indicate that MPAC was acting in good faith. Generally costs requests are limited to actions or behaviour relating to the proceeding before the Board. Furthermore there are limits to the costs awards as outlined in Rule 139 where the amount of costs shall not exceed the sum of $1,500.00 per day or up to $750.00 for each half day or less. Even if the Board were to grant costs it is restrained to the costs limits outlined in the Rule.

26The test for costs as outlined in Rule 137 of the Board’s Rules is not met and therefore, the cost request is denied.

ORDER

27The Vanzuylen’s’ application for costs against MPAC is dismissed.