J.D.F. v. City of Hamilton, 2018 CanLII 107724

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 07, 2018

FILE NO.: WR 156192

Assessed Person(s): J.D.F.

Appellant(s): J.D.F.

Respondent(s): City of Hamilton

Property Location(s): Withheld

Municipality(ies): City of Hamilton

Roll Number(s): Withheld

Appeal Number(s): 3317264

Taxation Year(s): 2017

Hearing Event No.: 703965

Legislative Authority: Section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended

Heard: September 17, 2018 in Stoney Creek, Ontario

APPEARANCES:

Parties

Representative

J.D.F.

B.F.

City of Hamilton

Irwin Sampat

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI

INTRODUCTION

1J.D.F., (the “Applicant”) is a 59-year old man who lives with his 12-year old son in a four-bedroom and three-bathroom bungalow with a parking garage. The assessed value of the subject property is $361,000 for the 2017 taxation year.

2With the Applicant’s consent, his son B.F. acted as his interpreter and representative.

3The Applicant filed an application with the City of Hamilton (the “City”) seeking a cancellation, reduction or refund of property taxes for the 2017 taxation year on the basis of sickness or extreme poverty pursuant to s. 357(1) (d.1) of the Municipal Act, 2001, S.O. 2001, c. 25 (“the Act”).

ISSUE

4The issue before the Assessment Review Board (“the Board”) is to determine whether the property taxes of the Applicant for the 2017 taxation year should be cancelled, reduced or refunded as a result of the Applicant’s inability to pay due to sickness or extreme poverty under the Act.

DECISION

5Based on the evidence before it, the Board determines that the Applicant’s 2017 property taxes should not be cancelled, reduced or refunded notwithstanding his sickness. The Board therefore, dismisses this application.

REASONS FOR DECISION

Legislation

6Section 357(1)(d.1) of the Act states that:

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 the taxes levied on land in the year in respect of which the application is made if 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 the Applicant is able to pay his taxes. If the Applicant was able to pay the 2017 taxes, then the application fails. If the Applicant proves that he is unable to pay the taxes, the Board must then determine the reason the Applicant is unable to do so. Relief can only be granted if the Applicant is unable to pay, based on either sickness or extreme poverty.

EVIDENCE AND ANALYSIS

Applicant’s Evidence and Position

Ability to Pay

8In determining whether the Applicant has the ability to pay his taxes, the Board has to consider the evidence presented by the Applicant regarding his financial situation, which is not limited to his income and expenses. The Applicant submitted that in 2017, he was living in extreme poverty and was unable to pay his property taxes.

9The Applicant testified that he was divorced and presently lives with his 12-year old son. He stated that he worked as a construction worker for a high-rise construction company for 30 years. After his two accidents in 2002 and 2015, he was dismissed from his job for not being able to work. He stated that he complained to the Human Rights Tribunal regarding his dismissal and in December 2017, he received a settlement for $12,500 for wrongful dismissal. He also collected $7,326.27 pension from the company he worked for. The Applicant stated that he does not receive financial assistance from his older children.

Applicant’s Financial Evidence

10The Applicant submitted a copy of the Form 1 – Financial Information and also provided evidence at the hearing regarding his monthly income and expenses, assets and liabilities as detailed hereunder:

Income Total $2,092.58/month

Expenses

1. Mortgage $ 524.00
2. Fuel (gas/oil) $ 61.00
3. Water/Heat/Hydro $ 210.00
4. Telephone/Cable/Internet $ 250.00
5. House Insurance $ 57.00
6. Car Insurance $ 68.00
7. Car Payment $ 179.00
8. Gas for Car $ 70.00
9. Food $ 600.00
10. Medication $ 50.00
11. Credit Card $ 100.00
12. Property Taxes $ 324.22
13. Other Expenses $ 187.95

Expenses Total $2,681.17/month

Net Total $ -588.59/month

Assets

Assessed value of the house in 2017 $361,000.00

Bank of Montreal $ 12,920.71

Assets Total $373,920.71

Liabilities

Mortgage $200,387.00

NET WORTH TOTAL $+173,533.71

11Based on the information submitted in the Financial Information Form, the net worth of the Applicant is $173,533.71.

Sickness

12The Applicant testified that he had two work related accidents in 2002 and 2015, which left him disabled. He stated that he has not worked since 2015 but did not apply for disability until 2018 because he was told he had to wait for two years. The Applicant submitted a letter from Hamilton Community Health Centre, which states that the Applicant had a right shoulder injury in 2002 and neck injury in March 2015 at the work place. The Applicant submitted that he was seeking a refund for 2017 property taxes paid because of sickness.

City’s Evidence and Position

13Irwin Sampat, representative for the City stated that the Applicant paid all of his taxes for 2017 and previous years, without any compounded interest or fees. He made no submissions and recommendations.

Board’s Analysis

14The intent of the legislation is to provide relief for property owners who cannot pay their property taxes in full or in part due to sickness or extreme poverty in a given taxation year. If the Applicant proves an inability to pay the taxes, they must then prove the reason why they cannot, and only then can relief be granted.

15There is no dispute that the Applicant is sick. The Applicant presented a note from Hamilton Community Health Centre which corroborates his oral testimony in regards to his two accidents. The Board finds that sickness exists. The main question to be determined is, if the Applicant had the ability to pay his 2017 taxes.

16The Board finds that the Applicant had the ability to pay his 2017 taxes for the following reasons.

17The Board notes that the Applicant’s Bank of Montreal statement shows that he was in possession of $12,920.71 cash in his account in December 2017. This amount would have enabled him to pay his property taxes, which is $324.22 per month.

18Furthermore, the Applicant was questioned regarding several amounts of cash deposits in his Bank of Montreal account ($2,807.00 in total). In response, he stated that he could not recall what those deposits were for.

19Moreover, the Board notes that the Applicant lives in a four-bedroom house with his 12-year old son. He was asked whether he has considered renting out a room in his house to generate more income and help him pay his property taxes. He stated that he never considered that option for he likes his privacy.

20The Board also notes that the Applicant has submitted an expense of $317.00 per month for operating his car ($179.00 for car payment, $70.00 for gas, and $68.00 for insurance). In addition, he pays $250.00 per month for Telephone/Cable and Internet. The Board finds that these expenses are excessive and show that the Applicant is not properly prioritizing his municipal tax obligations.

21In the Board’s view, this discretionary spending on non-essential matters, as mentioned above, indicates that the Applicant had an ability to pay his monthly property taxes, which he did. The Board determined, in M. M. U. v Toronto (City), 2015 CanLII 46826 (ON ARB), that discretionary expenses must not take precedence over the payment of property taxes.

22Furthermore, the Board notes that the Applicant’s existing equity in the house is $173,533.70. There is no evidence before the Board to show that the Applicant has explored any option in accessing the equity in his home before making this application. These applications are of last resort and the Applicant must have depleted all resources before making such application.

CONCLUSION

23Based on the reasons stated above, the Board finds that the Applicant had the ability to pay his 2017 property taxes. In fact, the evidence reveals that he paid the 2017 taxes without compounded interest and fees.

24The Board therefore, dismisses the Applicant’s application for relief under the Act.