Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 18, 2017 FILE NO.: DM 2017M07

Moving Party(ies): NAV Canada Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15 and 23 Respondent(s): City of Mississauga and City of London

Property Location(s): Pond Street West, 2490 Britannia Road East, Britannia Road East and 1750 Crumlin Sideroad Municipality(ies): City of Mississauga and City of London Roll Number(s): 2105-040-098-20401-0000, 2105-050-113-16500-0000, 2105-050-113-16520-0000, and 3936-090-310-00100-0002 Appeal Number(s): 3153536, 3083449, 3033291, 2985160, 3152602, 3084879, 3006554, 2985161, 3153535, 3082854, 3033820, 2985162, 3090794, 3102853, 3026876, and 2985167 Taxation Year(s): 2013, 2014, 2015, and 2016

Legislative Authority: Rule 83 of the Assessment Review Board’s (“Board”) Rules of Practice and Procedure Heard: October 16, 2017 in writing

APPEARANCES:

Parties	Counsel+/Representative
NAV Canada	Janet Bradley+
MPAC	Melissa VanBerkum+
City of Mississauga	Brad Teichman+
City of London	Brian Shimla

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH

1NAV Canada is seeking leave to amend their Statement of Issues. As a result of that request, NAV Canada is also seeking to adjourn the hearing of these appeals, currently set as a ten day event commencing on November 27, 2017. Finally, if the adjournment is granted, NAV Canada is seeking procedural directions around the new hearing date. None of the other parties have filed any evidence or submissions, and the record indicates that the other parties consent to NAV Canada’s request for an adjournment as a condition of accepting the pleading amendment.

2NAV Canada’s requests are largely based on a series of judicial decisions in British Columbia. They argue that the law changed and now requires that they reframe their appeals with a new Statement of Issues, and associated disclosure.

3NAV Canada’s motion to amend their pleadings is denied, for the reasons set out below. Without that amendment, NAV Canada’s adjournment motion is moot.

REASONS FOR DISPOSITION OF MOTION

Legislation and Rules

4The only relevant Rule from the Board’s Rules of Practice and Procedure (“Rules”) is Rule 41, which states:

Amendment of Documents

41. Statement of issues or responses cannot be amended after the filing date set out in the schedule of events unless all parties consent, or as provided in these Rules, unless the Board orders otherwise.

Issues

5The primary issue in this motion is if NAV Canada should be permitted to amend its Statement of Issues a second time. If the amendment is granted, an adjournment will be required to address the resulting unfairness. But if leave to amend the pleading is denied, there is no need to adjourn the hearing. The need for further disclosure dates is also moot if leave to amend the pleading is denied.

Discussion

6In 2014, NAV Canada filed appeals with this Board relating to 83 properties it holds across Ontario. The Board issued an Order on October 29, 2014 that set these four properties as test cases for the rest of the NAV Canada appeals. The remaining appeals are adjourned awaiting the outcome of this hearing.

7The issue in these appeals was first argued in British Columbia. The Supreme Court of British Columbia issued its decision in Assessor of Area #01 – Capital v. Nav Canada, 2014 BCSC 2088, on November 5, 2014. That case followed other British Columbia jurisprudence, and held that land dedicated to a single purpose with no identifiable market should be assessed at a nominal value. NAV Canada took that position in its November 20, 2014 Statement of Issues for these appeals.

8The Court of Appeal for British Columbia reversed the Supreme Court of British Columbia in Assessor of Area #01 – Capital v. Nav Canada, 2016 BCCA 71. In that decision, released on February 16, 2016, a five member panel of the Court held that special purpose properties should be valued using the cost approach. The Court held, at paragraph 49, that “One must regard the owner as one of the possible purchasers, or estimate what the owner would be willing to spend on a building to replace that which is being valued.”

9These appeals were originally set for a hearing on November 21, 2016. NAV Canada was granted an adjournment of that hearing date in July of 2016, while leave to appeal the British Columbia Court of Appeal decision was sought. The hearing was then set for July of 2017. The Supreme Court of Canada denied leave to appeal on August 11, 2016. Ontario’s Divisional Court later followed the Court of Appeal for British Columbia in VIA Rail Canada Inc. v. MPAC, 2016 ONSC 5705, released on September 15, 2016.

10It was clear that NAV Canada still intended to argue the legal principle of nominal value for special uses when it amended its Statement of Issues on November 28, 2016. Notwithstanding the decisions of the Supreme Court of Canada and Ontario Divisional Court, NAV Canada amended its pleading at that time to more firmly rely on a nominal value for the properties.

11Around that time NAV Canada also began lobbying for legislative valuation directions in both British Columbia and Ontario. On the basis of that lobbying the Board granted a second adjournment in June of 2017. That is when the current ten day hearing, commencing on November 27, 2017, was set.

12Ten months after it last amended its Statement of Issues, on September 29, 2017, NAV Canada changed the issues in dispute. NAV Canada notified the other parties that it now accepted the principles set out by the British Columbia Court of Appeal and Ontario Divisional Court and would argue these appeals not on the legal issue it originally plead, but on value. It sent a proposed amended Statement of Issues to the other parties on October 6, 2017, with the required particulars a few days later. MPAC and the City of Mississauga would not consent to amending the Statement of Issues unless there was an adjournment to allow for disclosure of information relevant to NAV Canada’s new pleadings. That is the basis for this motion.

Pleadings

13The Board’s Rules were amended on April 1, 2017. Rule 41 is explicit that pleadings cannot be amended after filing without the consent of all parties. There is a clear policy rationale behind the Rule. It is fundamentally unfair to the other parties to permit the issues to change late in the process. The purpose of pleadings is to let all parties know the case to be met and to avoid ambush. Pleadings lock the issues in place and ground all further work on appeals. They should only be amended late in the process in special circumstances.

14NAV Canada argues that their third Statement of Issues will narrow the matters in dispute, but the proposed pleading actually creates entirely new issues for dispute. NAV Canada was arguing for nominal values, on a largely legal framework. They are now abandoning those legal arguments and seeking to shift to more standard arguments around valuation methodology. It is completely reasonable for the other parties to oppose such an amendment at this point in the process.

15It is far from clear why that shift was only communicated to the other parties two months before the hearing. The Court of Appeal for British Columbia largely removed many of NAV Canada’s legal arguments a full twenty months before the current hearing date. The Supreme Court of Canada closed the door on those arguments, at least in British Columbia, fourteen months before the current hearing date. The Ontario Divisional Court also went against NAV Canada’s position a month after that.

16NAV Canada has not explained why it only abandoned those legal positions over a year after the Supreme Court of Canada denied leave to appeal and Ontario Divisional Court adopted the British Columbia law. It did not make these changes when it last amended its pleading. It did not make these changes in July of 2017, when it requested the current hearing. Instead, NAV Canada radically changed its position two months before the hearing, pressing the other parties to demand an adjournment to preserve some sense of fairness.

17NAV Canada argues that denying them leave to amend their pleadings would force them to argue on law that has changed, with insufficient evidence. That may be so, but NAV Canada created that situation by sitting on its hands after the law changed. In a motion to amend pleadings it is not sufficient for a party to simply say that it no longer disputes the appeals on the basis plead. There must be some compelling reason why the ground has shifted, necessitating the change.

18The decision of the Court of Appel for British Columbia likely met that test. But that decision was released more than nine months before NAV Canada last amended its pleading. That pleading amendment took place months after the Supreme Court denied leave. That shifting legal framework would have been a compelling argument for that amendment to NAV Canada’s pleading, but it is not a compelling argument now.

19NAV Canada has not demonstrated a compelling reason to permit such a late and significant change to its pleading. Leave for NAV Canada to amend its Statement of Issues is denied.

Adjournment

20The opportunity for the other parties to respond to the amended pleading was the main argument for the adjournment request. I do not see a need to consider the adjournment request now that leave to amend NAV Canada’s pleadings has been denied.

Procedural Dates

21The hearing of these appeals is set to begin on November 27, 2017. It is essential that the parties be properly prepared for that hearing. For that reason, I order that all documents to be relied on at the hearing, including any expert reports, be served on all other parties, and filed with the Board, no later than November 17, 2017.