Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 16, 2018

FILE NO.: WR 149342

Assessed Person(s): Damian Anthony Smith, Michelle Lynne Smith

Appellant(s): City of London, Brian Shimla

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region No. 23

Respondent(s): City of London

Property Location(s): 23 Winship Close

Municipality(ies): City of London

Roll Number(s): 3936-050-580-37220-0000

Appeal Number(s): 2949904, 3026789, 3090976 and 3158004

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

Hearing Event No.: 679167 and 685179

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

Heard: May 29, 2017 and August 24, 2017 in London, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

City of London, Brian Shimla

Geoff Belch⁺

Damion Anthony Smith and Michelle Lynne Smith

Self-represented

MPAC

Tony Pileggi

DECISION OF THE BOARD DELIVERED BY JOSEPH M. WYGER AND DAN WEAGANT

INTRODUCTION

1It started with a smoking flowerbed. Michelle Lynne Smith and Damian Anthony Smith (the assessed persons) learned that their house and the surrounding neighbourhood had an issue with methane gas in the ground. Following further enquiries, investigations and tests, they determined that the methane gas along with other volatile organic compounds (“VOCs”) that they believed were entering the house from outside, were potentially explosive as well as a serious health hazard. The assessed persons considered the house unsafe to live in and their family chose to move out. They claimed that they could not obtain insurance, mortgage financing or any realtor to list the property for sale due to these issues.

2Ms. Smith appealed her property assessment for the 2009 through 2012 taxation years, which were based on a January 1, 2008 valuation. Following a full hearing into the issues affecting the property, the Assessment Review Board, (the “Board”) concluded that “…because of a very serious methane gas problem, the current value of the subject property is zero for the taxation years under appeal.” For the first taxation year of the new cycle (2013) which is based on a January 1, 2012 valuation day, MPAC returned an assessment of zero for the property, on the basis of the Board’s decision for the January 1, 2008 valuation day.

3The City of London (“City”) does not dispute the pre-existing presence of methane gas on the subject property, but contests MPAC’s returned assessment of zero for the 2013 through 2016 taxation years, based on the January 1, 2016 valuation day.

ISSUES

4A number of issues arise with respect to this appeal:

1. A preliminary issue was raised by the Assessed Person (Ms. Smith) as to whether the principle of issue estoppel applies to this case, since the Board decided the question of whether, and to what extent methane gas affected the value of the subject property for the 2009 through 2012 taxation years.

2. If issue estoppel does not apply, is there is a methane or VOC problem serious enough to affect the current value for the 2013 to 2016 taxation years, and if so to what extent?

3. What is the correct current value of the subject property for the 2013 through 2016 taxation years?

4. Is the correct current value determined inequitable relative to the assessed values of similar lands in the vicinity, requiring a further adjustment?

DECISION

5The Board finds that the principle of issue estoppel does not apply.

6The Board finds that the methane or VOC problem does not make the property unsaleable, but does reduce its current value as of January 1, 2012 because of the resulting stigma.

7The Board finds the correct current value to be $206,000.

8The Board is unable to make a finding of inequity when the correct current value is compared to the assessed values of similar properties in the vicinity, so no further adjustment is required.

REASONS FOR DECISION

Legislation

9In making its determination the Board must consider the following sections of the Assessment Act (“Act”).

10Section1(1) of the Act states:

current value means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer; (“value actuelle”)

11Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

12Section 19.2 (1) of the Act states:

Valuation days

19.2 (1) Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

13Section 44.(3) a) and (b) of the Act states:

Same, 2009 and subsequent years

(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

14Section 45 of the Act states:

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.

Issue Estoppel

15The assessed persons, Michelle and Damian Smith submitted that the presence and impact of methane gas on the value of the property had been resolved in the appeals for the previous tax cycle and therefore that question could not be raised in the appeals for this new tax cycle. The City of London submitted that the question of if and to what extent methane gas affected the value of the subject property as of January 1, 2008 was litigated and decided by the Board but only for the for the taxation years 2009 through 2012. The City is seeking to argue the effect of methane gas, if any, on the current value of the subject property as of January 1, 2012 for the taxation years 2013 through 2016, on the grounds that the current value for the valuation year 2012 is not the same issue as the current value for the valuation year 2008.

16The principle of issue estoppel prevents the re-litigating of an issue that has already been judicially decided. The Board must determine if the principle of issue estoppel applies, to prevent the City from re-arguing the question of if and to what extent methane gas affects the value of the subject property for the 2013 through 2016 taxation years.

17The Board determines that the principle of issue estoppel is not applicable in this case for the reasons that follow. In the context of the subject property, it is the issue of the effect of methane on its current value, which the Board decided reduced its value to zero, in WR 111365 issued on December 11, 2011.

18The three criteria that must all be met for issue estoppel to apply are well-settled in the law, and were framed in Wabi Iron and Steel Corp. V Municipal Property Assessment Corp. Region No. 29 [2002] O.A.R.B.D. No. 219, and upheld by Divisional Court 2005 CanLII 3984 (ONSC):

• That the same question has been decided;

• That the judicial decision which is said to create the issue estoppel was final; and

• That the parties to the judicial decision were the same persons as the parties to the proceedings in which the estoppel is raised.

19Ms. Smith raised the question of issue estoppel at the May 29, 2017 hearing event. The Board requested the parties to be prepared to make submissions on that question when the hearing was re-convened on August 24, 2017. Ms. Smith maintained that the methane in her house is still there, so the issue is the same as before and the property is still worth zero.

20Mr. Belch pointed out that there was evidence that methane was not a risk to health or safety, which was not presented to Member Ian Birnie at the first hearing. He also argued that the City did not participate in the first hearing, suggesting that the parties to the decision were not the same as the case before us, in which the City is now playing a role as a full party exercising its right of appeal. Mr. Belch provided cases on issue estoppel in which the principle was applied to stop the re-litigation of the current value that was already decided within the same assessment cycle; that is with the same base year. He contrasted that scenario with the case before this panel, which is a new assessment cycle where the current value is now based on a January 2012 value, and not the January 2008 current value, which was previously argued and decided.

21Mr. Belch asserted that the current value for 2008 is not the same issue as the current value for 2012. He made the case that to apply issue estoppel across new assessment cycles raised the spectre of the property having a zero assessment for the next 20 or 30 years, and that this could be unfair to other taxpayers and was wrong as a matter of policy. Mr. Belch argued that a party should be able to challenge the current value in the new cycle, as new facts and evidence (related to methane or otherwise) may arise as it has in this case, to show that there are changes to the subject property that affect its current value.

22Mr. Pileggi for MPAC, echoed most of Mr. Belch’s points. While he conceded that the issue of methane gas remained constant in both base year appeals, the fact that the appeals speak to two completely different market base years is a fundamental difference. He maintained that the matter in issue before us is the 2012 current value, and that matter is different from the 2008 current value. Both MPAC and the City relied on a number of cases that supported that proposition: Halan Park Development Ltd. and Regional Assessment Commissioner for Hamilton-Wentworth, Region No. 19 et al. 1985 CanLII 1999 (ON HCJ), 50 O.R. (2d) 437; Gregory v. Ontario Property Assessment Corp., Region No 28 [2001] O.A.R.B.D. No. 645; Municipal Property Assessment Corp, Region No. 14 v Zeppieri, [2012] O.A.R.B.D. No. 14; Wabi Iron and Steel Corp. V Municipal Property Assessment Corp. Region No. 29 [2002] O.A.R.B.D. No. 219:

23The issue for this panel to determine is the correct current value of the subject property as of the statutory valuation day of January 1, 2012. The previous panel of the Board made a determination of the correct current value of the subject property as of the statutory valuation day of January 1, 2008 on the basis that methane affected that value. This issue of whether methane devalued the property in 2008 may not be the same issue as whether it affected value in the 2012 valuation year. The methane problem is a physical characteristic of the property that can change between valuation years just like any other physical characteristic. Any devaluation due to methane ought to be subject to re-testing at the beginning of each cycle, just like any other possible changes to a property’s physical condition. The decision of the Board for the 2008 base year would have been a final decision for four taxation years, but it cannot be considered a final decision for all taxation years thereafter due to the very nature of the changes that occur to real property over time.

24The Board finds, therefore that the first criteria for issue estoppel to apply, “that the same question has been decided”, is not applicable for these appeals. Because all three criteria cited above must be met, issue estoppel does not apply.

The Methane Issue

25The methane issue is a long standing one, initiated by concerns raised by Ms. Smith when she learned of the presence of methane gas on her property when the smoking flowerbed was investigated.

26Since the 2011 decision of the Board, both the City, and the Assessed Persons have engaged consultants to make determinations of the level of methane gas produced at the rear of the property and the impact of that methane gas on safety and on the interior air quality of the subject dwelling. The Smiths did not call any of their consultants to provide their expert opinions to the Board, while Geoff Belch, counsel for the City called two fact witnesses and three experts in support of its position. Over the objections of the City, the Board permitted the Smiths to enter all of their consultant’s reports without those consultants being present at the hearing. To deny them would have left them with no case to present which would have been unfair to them and would have left the Board without a complete picture of the facts and history of the issues.

27The context of these ensuing investigations is best set out in the Naylor Engineering report, titled ‘Methane Gas Investigation 23 Winship Close London Ontario’, prepared in March 2009. (‘Naylor 2009’). This report was also before the previous panel of the Board. At that time its conclusions and recommendations were not refuted and were relied upon for the Board’s previous decision on the 2009 through 2012 taxation year appeals.

28The Naylor 2009 report concluded that:

• There is organic material on the property that is a source of methane gas;

• This organic material is producing methane gas that may present an ‘explosive hazard’ and monitoring may not be enough to mitigate such a hazard;

• Gas probes installed at four boreholes show up to 76% gas by volume which exceeds the 5% lower Explosive Limit (‘LEL’) of methane gas;

• The subsurface barrier between the source of methane gas in the rear yard and the dwelling may not be of sufficient clay content to act as a sub-surface migration barrier to methane;

• The passive removal system (vent pipes connected to weeping tiles) could fail due to blockage;

• Removal of the source of methane may be required; and

• Additional study of the methane source is recommended.

29As a result of Naylor 2009, the Smiths retained MTE Consultants Inc. to carry out an additional study titled “Preliminary Air and Soil Vapour Sampling – 23 Winship Close, London. (“MTE 2013”). This was the first report, chronologically, that was prepared after the previous Board decision. This and subsequent reports summarized below constitute new evidence for the 2013 through 2016 appeals that are before this panel.

30The MTE 2013 study involved indoor air and soil gas sampling to determine:

• The presence of methane, VOC and PHC F1 and F2 inside the dwelling;

• If these compounds were detected in indoor air; and

• If the presence of these compounds were attributed to soil vapour intrusion i.e., migration from subsurface conditions at the property.

31MTE 2013 concluded that:

• Soil borne methane at Borehole 3 is significant at 512,000 parts per million (PPM), which was similar to the finding of Naylor 2009;

• Further air and soil vapour testing was warranted to address indoor VOCs and PHCs;

• Subsurface soil and groundwater should be investigated for PHCs and VOCs to determine their extent and severity and their source; and

• A review by a toxicologist to determine the level of risk to the health and safety of occupants is recommended.

32The conclusions of MTE 2013 led the City of London to retain Golder Associates Ltd. to complete two further studies; ‘Methane Investigation, 23 Winship Close London Ontario, December 2014’ (“Golder 2014”) and ‘Toxicological Review of Soil gas, Sub-Slab Gas and Indoor Air Quality Data for 23 Winship Close London Ontario’, January 9, 2015. (“Golder 2015”).

33The purpose of Golder 2014 was to determine if methane gas, present in the soil gas, is migrating to the indoor air inside the dwelling. To complete their assessment, Golder carried out the following:

• Drilling of boreholes and installation of soil gas probes in the rear yard

• Installation of sub-slab gas probes in the basement of the dwelling;

• Installation of permanent combustible gas sensors with data logging in the dwelling;

• Monitoring of soil gas, sub-slab gas and indoor air quality; and

• Collection of soil gas, sub-slab gas and indoor air samples for analysis.

34As a result of this program of data collection and monitoring, Golder 2014 concluded that:

• Elevated concentrations of methane were measured in soil gas outside of the house, northwest of the dwelling where the known organic fill material exists (consistent with the findings of Naylor 2009 and MTE 2013);

• No methane gas was detected above 0.2% by volume from any of the sub-slab gas probes installed, during either field screening or lab analysis (5.0 % is the LEL for methane);

• Concentrations of combustible gas measured at permanent sensors in the dwelling were below 30 PPM, with methane specifically below the 0.2% detection limit of the equipment;

• The methane venting system was functioning as designed (methane was measured at 0.0% by volume in the venting system, consistent with the sub-slab soil gas measurements); and

• Methane in the outdoor soil gas is not migrating into indoor air.

35The purpose of Golder 2015 was to determine if concentrations of chemical compounds measured in soil gas, sub-slab gas and indoor air are potentially of concern to human health resulting from soil gas intrusion. Golder 2015 concluded:

• Samples of soil gas, sub-slab gas and indoor air samples were collected in November 2013, April 2014 and August 2014;

• One substance (benzene) was detected at concentrations greater than its health based screening value. However, benzene is commonly detected in dwellings with attached garages (like the subject dwelling). Benzene was not detected in sub-slab gas and as a result, its presence was not considered to be due to vapour intrusion from an outside source.

• All other substances measured in the indoor air fell below levels associated with health effects and, if present, are likely from a source within the residence itself.

36In response to Golder 2014 and Golder 2015, the Smith’s retained MTE to review the work plans, monitoring program and analysis, commissioning two documents; ‘Review of Technical report from Golder Associates Ltd. Methane Investigation, 2014’, dated September 1 2015. (“MTE 2015 -1”); and ‘Review of Technical memorandum from Golder Associates Ltd. Toxicological Review of Soil gas, Sub - Slab Gas and Indoor Quality Data for 23 Winship Close, London ON, dated September 3, 2015 (“MTE 2015 – 2”).

37Both MTE 2015 – 1 and MTE 2015 – 2 serve as a record of numerous questions and comments regarding the approach and findings of the Golder 2014 and 2015 reports.

38In turn, Golder provided documents to the City with explanations, clarifications and technical responses to each of the points raised by MTE in their review. The result of the Golder response was that none of their findings or conclusions changed. However, in June of 2017, a revised screening level assessment of soil gas, sub-slab gas and indoor air quality was prepared by Ramboll Environ (“Ramboll”). The author of the original toxicological review (Golder 2015) had moved to Ramboll Environ from Golder Associates Ltd. in the intervening time and was retained by the City for the purposes of continuity. The purpose of the Ramboll report was to focus on those chemicals that were suspected to be from the subsurface environment rather than from indoor sources. The conclusions reached by Ramboll were:

• Benzene was detected in the interior of the dwelling at levels above its health related screening level, but is common in dwellings with attached garages, confirming that benzene is not considered to be subject to vapour intrusion from an outdoor source.

• Other substances were measured in indoor air at concentrations much lower than those associated with health effects and are likely attributable to a residential source.

Current Value

39The City of London retained Valco Real Estate Appraisers & Consultants (“Valco”) to prepare a valuation of the subject property, as of the valuation day, January 1, 2012. The report produced by Valco, dated March 26, 2015 was based on the findings of Golder 2014 and 2015 and considered the methane gas on the site, outside of the building.

40Valco’s representative, Dan Tapping, approached the valuation by first determining a current value as though there was no methane present and then made an adjustment to his findings to reflect the effects of ‘stigma’ related to the presence of the methane in the rear yard and the history of testing and investigations related to methane gas.

41Mr. Tapping applied the Direct Comparison Approach to value, whereby similar properties that sold on or near the valuation day are compared with the subject property to determine its value. In addition, Mr. Tapping undertook a detailed inspection of the dwelling to support his findings.

42Mr. Tapping selected six sales that occurred in the vicinity of the subject property that sold between August 2011 and February 2012. All six properties are two-storey dwellings with attached garages, like the subject property. Characteristics of these six properties are summarized in Table A.

TABLE A

Property

Sale date

Sale Price

Building Area (sq. ft.)

Sale Price / sq. ft.

No. bedrooms

Lot Dimensions

Subject

N/A

N/A

1,808

N/A

4

54’ x irreg.

Comparable 1

Feb. 2012

$211,500

1,953

$108.29

4

50’ x irreg.

Comparable 2

Sept. 2011

$227,000

1,808

$125.55

4

50’ x 100’

Comparable 3

August 2011

$248,000

1,663

$149.13

4

66’ x 100’

Comparable 4

January 2012

$230,000

1,457

$157.86

4

45’ x irreg.

Comparable 5

Feb 2012

$217,888

1,347

$161.76

3

50.39’ x irreg.

Comparable 6

Dec 2011

$249,500

1,482

$168.35

3

55’ x irreg.

43Mr. Tapping found that the average building area of the six comparable sales was 1,603 sq. ft., with an average sale price per sq. ft. $148.58. After a detailed comparison of the six properties to the subject property, he arrived at his opinion that a probable current value of the subject property, based on per sq. ft. value of between $150 to $155, is $275,000.

Stigma

44To address the impact on value resulting from the presence of methane gas and VOCs as described by Golder 2014 and 2015, Mr. Tapping considered the stigma associated with these elements and the history of the property and the impact on the property’s value. He submitted that there are nine such factors that impact pricing in such a situation and that six of these are present at the subject property:

• Longer marketing time

• Capability of arranging financing

• Obtaining mortgage insurance

• Obtaining building insurance

• Additional carrying costs

• Increased legal costs.

45In his opinion, these factors would combine to have a 25% downward impact on the value of the subject property or $68,750, resulting in a value of $206,250 with the stigma adjustment applied.

The City’s Position

46Mr. Belch submitted that the substantive issues related to current value have been clearly demonstrated by the City, through the evidence and testimony supporting its case. Specifically, Mr. Belch pointed out that the technical studies and reports completed by Golder and subsequently defended by them show that while there is methane producing material on the subject property, it is not migrating to the dwelling itself. He submitted that there is no evidence before the Board that the methane produced on the site is migrating into the dwelling.

47Mr. Belch called five witnesses to support the City’s position. The first two, Wesley Abbott and Tim Conlon are employees of the City who took the Board through the various steps of development of the subject property, from the original 1981 geotechnical report when the naturally occurring methane and its extent were first discovered, through a design report stipulating methane control measures, to the subdivision agreement and building permit stages where those control measures were implemented.

48The second two witnesses called by Mr. Belch were the authors of the Golder and Ramboll reports submitted as exhibits. Mr. Belch submits that under cross examination, these witnesses effectively defended their findings and at the end of the day it was determined that there is no ground source methane or VOC, or any other compounds existing in the subject dwelling that are above any explosive or health limits.

49Finally, Mr. Belch referred to the City’s valuation expert, Mr. Tapping, who considered these findings by Golder and Ramboll, and arrived at an opinion of current value of $206,250 which includes consideration of the stigma associated with the property resulting from its history and its notoriety in the local press and in the neighbourhood.

The Smith’s Position

50Ms. Smith took the position that the subject property has no value because the inability to obtain insurance has made it impossible to list it with a realtor or to obtain a mortgage. To support these assertions she provided correspondence from an insurance broker, a real estate broker and a mortgage broker.

51She testified that her family no longer lives at the home and when they moved, she contacted her mortgage lender to discuss payment options on the amount owing. The result of these discussions was that the lender, in an unusual step, discharged the mortgage on its own initiative; a step that Ms. Smith submits shows that it is unreasonable to expect that a prospective purchaser would be successful in obtaining a mortgage of any value, rendering the property valueless.

MPAC’s Position

52MPAC took no specific position on the issue of current value. Tony Pileggi submitted that MPAC had returned a value of zero for the 2012 current value assessment (“CVA”), based on the Board’s 2011 decision. He explained that, in the absence of any specific evidence available to MPAC at the time of the 2012 CVA, they saw no reason to take issue with the 2011 Board decision and the resulting current value.

ANALYSIS

The Impact of the presence of Methane and VOCs

53The smoking flowerbed that led to a series of investigations by the City and the Smiths was not determined to be linked to any soil borne methane or VOCs. The best evidence on the source of the smoking garden was that of the London Fire Department who, given their experiences at other properties, determined that the source was most likely a mulch product sold by a local retailer that was placed in the garden by the owner. The Fire Department responded to similar calls around the same time.

54The impact of this composting mulch was that the subject property became a topic of review by the City as it was known to be in a methane producing area and the City chose to take all reasonable precautions to eliminate the methane as a source of the smoking mulch.

55The Board finds that the ensuing studies and investigations serve to show that neither methane nor VOCs present in the soil at the rear of the dwelling were the source of any explosive or health risk, real or imagined. The Board agrees with Mr. Belch in that these potential risks were suitably assessed by the consultants and that their conclusions held up to scrutiny by the Smiths through consultant review and cross examination at the hearing. The Board finds the reports and findings of Golder and Ramboll to be credible and conclusive. The Board accepts the expert opinions of the City’s witnesses, and agrees with their un-contradicted conclusions that there is no risk of explosion or adverse health effects from indoor air quality as a result of naturally occurring methane in the ground outside.

Current Value

56The Board finds that the current value of the subject property is $206,250. Mr. Tapping’s report was unrefuted by the Smiths. The value without the methane stigma was determined by Mr. Tapping using the Direct Comparison Approach to value which is a time tested method of determining value when there is no sale of the subject property at or near the valuation day. The current value determined by Mr. Tapping of $275,000 is supported by his method and the comparable properties used.

57In determining the stigma adjustment, Mr. Tapping took a measured and systematic approach that resulted in his opinion that the factors leading to an adjustment for stigma equaled 25% of the current value determined. Neither his approach nor his findings were refuted by the Smiths. The Board finds Mr. Tapping’s opinion to be the best evidence of the current value with the stigma adjustment applied for a value of $206,000 (rounded).

Equity

58The Board is unable to make a finding of inequity when the correct current value is compared to the assessed values of similar properties in the vicinity, so no further adjustment is required.

59The City’s appraiser Mr. Tapping concluded that the correct current value of the subject property, in the absence of the methane issue would be $275,000. At the hearing, Brian Shimla for the City proposed an “equitable value” of $254,700 based on the average assessment per square foot (“psf”) of seven nearby properties. The range of values was from $127.50 psf to $152.65 psf. with a mean of $140.88 psf.

60While the Courts have held that s. 44(3)(b) of the Act does not specify any particular method for determining whether a correct current value is inequitable, it is incumbent on the Board to employ a method that persuades us on a balance of probabilities that to leave a correct current value at its correct level would do an inequity or unfairness to the property owner. To take the average or median assessed value of eight other assessed values as an “equitable value”, simply turns a correct current value into an incorrect current value because that “method” neither proves not cures inequity.

61Each one of Mr. Shimla’s seven assessed values is presumed to be at its correct current value, and so is the Board determined correct current value for the subject property. Because properties are generally not identical to each other, their market values differ from each other for legitimate appraisal/valuation reasons. The subject property’s correct current value is within the range of values of those seven similar properties. Having reference to this group of assessments and simply taking some midpoint value and calling it the “equitable value” does not demonstrate that the correct current value of the subject property was not equitable. Moving that correct current value from its point in the high end of the range to some middle value actually makes it less equitable relative to the other properties in the high end of the range which remain at the their correct current values. The logical extension of this “method” is to simply place all eight assessments at exactly the same number and eliminate the necessity of doing a current value analyses in the first place.

62The principle of equity permits a remedy to be applied where it is provable that the subject property’s current value is at a wholly different and higher level of assessment. If the subject current value fell well above Mr. Shimla’s range of eight similar properties, it would at least be arguable that it should fall within that range. The best way of examining if there is inequity is to determine if similar lands in the area are assessed at a level well below their likely sale values (current value). If they are at a lower level of assessment while the subject is at its likely sale value, then a finding of inequity is possible. In Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Ontario et al., 1968 CanLII 183 (ON CA), [1968] O.J. No.1164 (“Empire Realty”) the Court of Appeal hypothesized that even an assessment at actual value (current value) would be inequitable “if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred”. Simply averaging or finding the mid-point of a grouping of assessed values says nothing about whether those assessed values are at a substantially lower level than the subject property’s correct current value.

63Mr. Tapping provided sales and assessments in his analysis of six comparable properties. Three of these are also on Mr. Shimla’s list and the assessment to sale ratio (“ASR”) of the three averages 1.1 which is also the median. And while three ASR’s are precious few to show a trend, if anything they show that the level of assessments of neighbouring properties is about 10% higher than sales and so not inequitable to the subject. The average and median ASRs of all six of Mr. Tapping’s comparables is 1.00 and 0.97, demonstrating a close correlation between the level of assessments and level of sales for similar properties. When the subject property current value also resides at its likely sale value as it does in this case, there is no inequity and therefore no adjustment to the current value determined is required.

CONCLUSION

1. The Board finds that the principle of issue estoppel does not apply.

2. The Board concludes that the methane or VOC problem does not make the property unsaleable, but does reduce its value because of the resulting stigma.

3. The Board finds the correct current value to be $206,000.

4. The Board is unable to make a finding of inequity when the correct current value is compared to the assessed values of similar properties in the vicinity, so no further adjustment is required.

64Accordingly, the assessment of the property at 23 Winship Close is increased to $206,000 for the 2013, 2014, 2015 and 2016 taxation years, in the Residential property class.