A.K. and F.K. v. City of Mississauga, 2018 CanLII 48357

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 09, 2018

FILE NO.: WR 150842

Assessed Person(s): A.K. and F.K.

Appellant(s): A.K. and F.K.

Respondent(s): City of Mississauga

Property Location(s): Withheld

Municipality(ies): City of Mississauga

Roll Number(s): Withheld

Appeal Number(s): 3235742

Taxation Year(s): 2016

Hearing Event No.: 687970

Legislative Authority: Section 357.(1)(d1) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended

Heard: October 13, 2017 in Mississauga, Ontario

APPEARANCES:

Parties	Representative
A. K. & F.K.	A.K.
City of Mississauga	Sean Doyle

MEMORANDUM OF ORAL DECISION DELIVERED BY SUBUOLA AWOLERI AND MARGARITA OKHOVATI ON OCTOBER 13, 2017

INTRODUCTION

1This matter came before the Assessment Review Board (“Board”) on October 13, 2017. An oral decision was rendered at that time. Subsequently, A. K. and his spouse F.K. (“the Applicants”) requested that decision in writing.

2The Applicants both own and live together in the subject property, which is a town house condominium. It was purchased in 2014 for $362,000. They are both responsible for the payment of the property taxes on this property. In the 2016 taxation year, all property taxes were paid in full. The Applicants filed this application to have their property taxes refunded on the basis of sickness and/or extreme poverty.

ISSUE

3Should the Applicants be granted a full or partial refund of the property taxes paid in the taxation year 2016 due to sickness or extreme poverty pursuant to s. 357.(1)(d.1) of the Municipal Act, 2001 (“Act”).

DECISION

4The Applicants should not be granted a full or partial refund of the property taxes paid in the taxation year 2016 due to sickness or extreme poverty pursuant to s.357.(1)(d.1) of the Act. The Board determines that on a balance of probabilities, the Applicants would have been able to pay the property taxes for the 2016 taxation year. The application is dismissed.

REASONS FOR DECISION

Legislation

5Section 357.(1)(d.1) of the Act provides:

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 taxes levied on land in the year in respect of which the application is made if,

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

6In making a determination in this application, the Board must first determine whether sickness or extreme poverty exists, which is the first part of the two-part test. If neither sickness nor extreme poverty exists, the Applicant would not qualify for relief. If either exists, to fulfill the second part of the test, the Applicant must demonstrate an inability to pay all or part of his property taxes.

EVIDENCE AND ANALYSIS

7F. K. was not present at the hearing. A. K. presented the evidence for the Applicants.

Sickness

8A. K. testified that in 2013, a pacemaker was inserted into his heart. He presented corroborating documentary evidence of his sickness in Exhibit 2, which includes letters from Doctors regarding his sickness and a history of his medical treatment. One of the letters from a cardiologist reveals that he suffers from “ischemic cardiomyopathy”. Another Doctor’s letter dated October 7, 2017, provides that A.K. has been on disability since December 2003 and is unable to return to work indefinitely.

9A.K. also testified that F.K. has health problems however, he did not identify her sickness or present corroborating documentary evidence in this respect. He stated that F.K. found work through employment agencies. She worked full-time in 2016 but has been unable to secure a full-time job since that date which explains her low income. The Applicants’ application will be determined on the basis of an inability to pay property taxes due to A.K.’s sickness and the Applicants’ extreme poverty.

Extreme Poverty

10The term “extreme poverty” is not defined under the Act. In determining whether F.K. is in a situation of extreme poverty, the Board has to consider the evidence presented by the Applicants regarding their financial situation and a full spectrum assessment of the financial resources available to the Applicants in 2016, which is not limited to their income and expenses.

Ability to Pay

Applicants’ Evidence and Submissions

11A.K. submits that although they have paid all their property taxes for 2016 including 2017, as the evidence reveals from their low income and sickness they could barely make ends meet and they had to borrow money to pay their property taxes. Consequently, they are seeking a refund of $2,981.52 paid in 2016.

12A. K. testified that in September 2016, they obtained a loan of $35,000 from a private lender to travel out of the country for their daughter’s wedding and it was out of this money that they paid the 2016 property taxes on the subject property. He further testified that F.K. obtained approval to consolidate all their credit card debts in 2015, and they are currently making a minimum monthly payment of $175.00 towards this debt.

Household Income and Expenses

13The total monthly household income is $3,062.00. A review of the financial statement form reveals a monthly expense of $4,343.20, giving rise to a net income of (-$1,281.20). The Applicants’ income and expenses are summarized in the Income and Expenses Table below:

Table 1

Income/Expenses	Amount ($)
Household Income (monthly)	3,062.00
Expenses (monthly)
Mortgage	1,719.20
Fuel	200.00
Hydro/Water	200.00
Telephone (cell)	75.00
Insurance- Home	35.00
Insurance car Honda Civic 2015)	200.00
Car payment	287.00
Gas	200.00
Medication	200.00
Groceries	400.00
Credit card payments	400.00
Transportation	100.00
Maintenance of house	227.00
Internet/TV	100.00
Clothing	50.00
Total Expenses	4,343.20
Net Income (Total Income less Expenses)	(-1,281.20)

Assets

14In Exhibit 1, the Applicants’ Financial Statement, the City provided the assessed value of the subject property for the 2016 taxation year by MPAC as $421,000. The outstanding mortgage is $331,000. The Applicants had approximately $90,000 equity in the home in 2016.

15During cross-examination, when asked by the City how they were able to purchase the subject property in their current financial state and how they managed to make up the short fall from their deficit as revealed in Table 1, A.K. testified that F.K. has assets outside Canada. A.K. revealed that F.K. has two properties outside Canada. In 2014 she sold one property and used the proceeds of that sale to purchase the subject property, while the second property is currently under construction to be used as a residential property and will be given to their daughter as a gift who lives outside Canada. He stated further that F.K. also has a bank account outside Canada and the amount in that bank account is equivalent to approximately $20,000. A.K. also testified that in 1998, F. K. purchased life insurance certificates outside Canada. F.K. has sold some of these certificates and approximately $10,000 is left from this sale.

City’s Submissions

16Sean Doyle, on behalf of the City, submits that the evidence furnished by the Applicants reveals that their application does not qualify for relief. However, Mr. Doyle did not make any recommendation to the Board.

Board’s Analysis

17The 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. Either of these two eligible criteria must exist in order for a property owner to fulfill the first part of the test.

18A.K. presented letters from Doctors and other medical evidence which corroborates his sickness. The Board determines that sickness exists, which fulfills the first part of the test for A. K. The Board did not have sufficient evidence regarding F.K.’s sickness and determines that in the case of F.K. sickness does not exist. Having determined that in the case of A.K. sickness exists, the Board shall proceed to determine the Applicants’ inability to pay their property taxes due to A.K.’s sickness and the Applicants’ claim of extreme poverty. These two eligible criteria not only require an analysis of the Applicants’ income and expenses as provided by the Applicants in Table 1 above, but also an examination of all financial resources available to the Applicants which can be used to determine if the Applicants could mitigate their property tax obligation.

19A review of F.K.’s bank account activity in 2016 reveals various discretionary expenses, which includes various purchases from clothing and cosmetic stores, such as Le Chateau, Victoria Secrets, La Senza, Sephora and Holt Renfrew. During cross examination A. K. testified that these purchases were made for his daughter and son-in-law. Furthermore, the Board notes that there are several e-transfers from outside Canada to the Applicants’ bank account in Canada. A.K. testified that this money was provided by his relatives to help the Applicants financially prior to obtaining a second mortgage. He stated that they had to pay this money back to their relatives however, there is no evidence before the Board that this amount was paid back.

20Furthermore, on December 31, 2016, the closing balance in F. K.’s account was $1,266.09, after paying the total property taxes for 2016. The monthly property tax payable was $248.46. In addition to the money used on discretionary expenses and e-transfers, the Applicants’ banking activities reveal that they could make this payment.

21Moreover, A.K. testified that in 2016, they traveled outside Canada for their daughter’s wedding and paid approximately $3,000 for airline tickets.

22A.K. furnished the Board with details of F.K.’s assets outside Canada. The proceeds of sale of one of the properties was used to purchase the subject property. F.K. has a bank account with approximately $20,000 and has government certificates worth approximately $10,000; this excludes F.K.’s life insurance policy also outside the country. F.K. further has the financial capacity to pay for a second property currently under construction outside Canada. This reveals the Applicants’ global net worth is more than what was included in documents submitted in support of their application. The evidence before the Board is establishing that the Applicants are financially capable of sustaining themselves with their assets outside Canada. They had the financial capacity to pay their property taxes and they paid it in full.

23As determined by the Board in A.M. v. Toronto (City), 2016 CanLII 42756 (ON ARB):

Individuals must demonstrate that after having called upon every resource available to them and having explored every reasonable opportunity to mitigate any financial stresses there are no means of being able to pay some or all of their property taxes.

24The Applicants must demonstrate in their application, that after managing their financial resources and expenditures, they have no further resources to meet the basic necessities of life in addition to paying all or some of their property taxes.

25All home owners have a primary responsibility to pay their property taxes. The Applicants are both occupants of the home and their primary responsibility is to pay their property taxes.

26The evidence reveals that despite A. K.’s sickness the Applicants were capable of paying their property taxes for the 2016 taxation year.

27Furthermore, this application does not qualify as an extreme poverty case. The Applicants were able to make their property tax payment despite their claim of extreme poverty. Their financial resources available to them within and outside Canada could have been used to pay their property taxes, which was paid in full in 2016.

CONCLUSION

28The Board finds that the Applicants did not establish the requirements for the Board to make a finding of an inability to pay their property taxes due to sickness and/or extreme poverty and they do not qualify for a refund of all or part of the property taxes paid in 2016.

29The Board dismisses the application for the 2016 taxation year.