Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 29, 2018

FILE NO.: DM 153843

Moving Party: Municipal Property Assessment Corporation (“MPAC”) Region No 7

Respondents: Stephen Cherry, Anneke Cherry

Respondent: City of Kawartha Lakes

Property Location: 31527 Simcoe Street

Municipality: City of Kawartha Lakes

Roll Number: 1651-160-050-00100-0000

Appeal Numbers: 3233323 and 3293040

Taxation Years: 2017 and 2018

Hearing Event No.: 700572

Legislative Authority: Rule 24 of the Assessment Review Board Rules of Practice and Procedure

Heard: In writing

APPEARANCES:

Parties	Representative
MPAC	William John White
Stephen Cherry and Anneke Cherry	Stephen Cherry
City of Kawartha Lakes	Melita Andrews

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH AND ANTHONY LaREGINA

1MPAC brings this motion seeking to dismiss the 2017 and 2018 appeals of the property at 31527 Simcoe Street in the City of Kawartha Lakes. MPAC argues that the owners of that property, Stephen Cherry and Anneke Cherry (the “Cherrys”), did not comply with an order of this Assessment Review Board (the “Board”), and that the consequence of that non-compliance should be a dismissal of these appeals.

2We find that there was non-compliance with an order of this Board, but that both MPAC and the Cherrys bear some responsibility for that outcome. In light of that shared fault, a dismissal of these appeals would be inappropriate.

3We also find that these appeals can only be properly litigated if an inspection of the property takes place. We order that the parties immediately schedule an inspection of the property, to be completed on or before July 23, 2018. The peremptory hearing of these appeals is set for August 16, 2018. If an inspection has not been completed as ordered, the hearing panel is encouraged to award costs against the party most at fault for the non-compliance.

Background

4These appeals are summary proceedings and an inspection is generally considered part of the disclosure in summary proceedings. In this case the assigned disclosure deadline was January 3, 2018. During the request for review process in 2017, Mr. O’Connor, the valuations officer from MPAC, attempted to visit the property to see if he could conduct an inspection. There was a conflict with Mr. Cherry on that day and no inspection took place. MPAC again requested an inspection in December of 2017, and asked to inspect the property again shortly after the disclosure deadline. Mr. Cherry refused to permit an inspection at any time before the hearing.

5MPAC sought an order at the hearing and Mr. Cherry agreed, on the condition that the inspector be someone other than Mr. O’Connor. While it would have been preferable for MPAC to have sought a Board order for an inspection before the hearing date, their failure to do so is not fatal. MPAC knew that Mr. Cherry was refusing an inspection by early February, and should have sought an order at that time. They did not do so, only raising the issue at the hearing before Member LaRegina on March 26, 2018. That is not how inspection orders ought to be sought.

6Even though the preferred method was not followed, Member LaRegina did find that an inspection of the property was required in order to hold a fair hearing due to factual issues that are in dispute. He ordered that an inspection be conducted by two employees of MPAC, neither of which was to be Mr. O’Connor, within four weeks of the hearing, or by April 23, 2018. The parties agreed that they could conduct an inspection in that timeframe.

7The first contact between the parties after that hearing was an email from Mark Lindquist, of MPAC, to Mr. Cherry on April 18, 2018. That is over three weeks after the hearing, and only five days from the Board imposed deadline. When Mr. Cherry did not respond, MPAC filed this motion on April 30, 2018, a week after the Board imposed deadline. Mr. Cherry finally responded to Mr. Lindquist’s email on May 3, 2018, over a week after the deadline and shortly after he was served with this motion. Mr. Cherry suggested a time for an inspection on May 11, 2018. MPAC did not avail itself of that proposed inspection time, instead pursuing this motion.

Dismissal

8MPAC argues that Rule 24(d) of the Assessment Review Board Rules of Practice and Procedure (the “Rules”) applies here. That Rule states, in relevant part, that a “Board Member may dismiss an appeal…if… the appellant has not responded to a request by the Board for further information within the time specified by the Board.” MPAC suggests that the information to be provided here was the results of the inspection. It is our view that Rule 24(d) does not apply here. That Rule is aimed at direct requests for information by the Board, such as contemplated in Rule 21. The Board did not seek any information from the Cherrys. The Board ordered both the Cherrys and MPAC to do a particular thing by a particular time. That did not involve providing further information to the Board.

9The inapplicability of Rule 24(d) does not mean that a dismissal order is not open to this Board. The Board has control over its processes pursuant to s. 25.0.1 of the Statutory Powers Procedure Act, RSO 1990, c S.22. That section states, in relevant part, that the Board “has the power to determine its own procedures and practices and may for that purpose… make orders with respect to the procedures and practices that apply in any particular proceeding.” Member LaRegina was engaging that power in making the order to inspect and that power over the Board’s process means that we can dismiss these appeals if it would be appropriate to do so.

10This Board has held that “dismissal is an extreme remedy and should only be granted in the clearest of cases,” Municipal Property Assessment Corporation, Region No. 9 v 234900 Ontario Ltd., 2018 CanLII 248 (ON ARB), 2017 CanLII 74719 (ON ARB) at paragraph 8. The clearest of cases are those where there are willful breaches of the Board’s orders or Rules that are entirely attributable to the taxpayer. This is because the taxpayer is the only party punished through a dismissal order. The Board also held in 234900 Ontario Ltd that a “dismissal order is an inappropriate response to mutual breaches of the Board’s Rules and orders,” see paragraph 10. We agree that dismissal is inappropriate when both parties share fault for the non-compliance.

Fault

11Both parties are at fault for the non-compliance here. MPAC sat on its hands for 20 days after Member LaRegina made his order. While the Cherrys could have taken the first step, MPAC was the party that had to find staff, other than the assigned assessor, to conduct the inspection. It was reasonable for the Cherrys to wait for MPAC to initiate contact.

12The Cherrys are not, however, without fault. Mr. Cherry waited 15 days to respond to the email from MPAC and suggested an inspection date eight days later. That does not show a strong desire to comply with the Board’s order.

13A reasonable course of action would have been to canvas dates immediately following the hearing. Neither party did so, leading both parties to be in default of the Board’s order.

Costs

14Dismissal is rarely the appropriate remedy for minor breaches of Board orders or of the Rules. Dismissal is a harsh and absolute measure that removes the appellant’s appeal rights. Such an order will seldom be in line with Rule 4 as ensuring “the just, most expeditious and least expensive determination of every proceeding.” There will be clear cases of significant taxpayer non-compliance that may justify a dismissal order. However, that remedy will be too severe for many cases. Some measure is required to deal with broader issues of non-compliance. Rule 8 leaves that determination to the Board.

15We find that most cases of non-compliance can be fairly dealt with through an award of costs. Rule 116 is clear that the Board may order costs against any party on its own initiative if “a party that has acted unreasonably, frivolously, is vexatious, or in bad faith.” Many willful breaches of Board orders will be unreasonable and in bad faith, and thus fall within the class of cases eligible for a cost award. A cost award creates an incentive for compliance, but preserves the substance of the appeal. Cost awards are also available against all parties, while dismissal is only available against the taxpayer. Having the same remedy available to all parties creates a more level playing field in arguments about alleged breaches of Board orders or the Rules.

16Each case will be determined on its own facts, but we would encourage parties to view costs as the appropriate remedy for non-compliance before this Board. Dismissal should only be reserved for the clearest cases of significant taxpayer non-compliance. Costs awards can be tailored to address each particular breach, while dismissal orders cannot.

17Given the shared responsibility here, and the fact that it is not currently the Board’s practice to order costs for non-compliance, we will not order costs here. However, we would encourage the panel hearing this appeal to seriously consider a cost award if there is continued non-compliance with our order.

ORDER

18We deny MPAC’s motion for a dismissal order. We find that an inspection of the property is still required for a just disposition of these appeals. We order the parties to agree to a date for an inspection to be conducted on or before July 23, 2018. The peremptory hearing of these appeals is set for August 16, 2018 and any cost arguments should be brought before the panel hearing these appeals.