A. P. v. City of Toronto, 2018 CanLII 70339

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 25, 2018

FILE NO.: WR 150543

Assessed Person(s): A. P.

Appellant(s): A .P.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): City of Toronto

Roll Number(s): Withheld

Appeal Number(s): 3108233

Taxation Year(s): 2015

Hearing Event No.: 686586

Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006, c.11, Sched. A

Heard: October 30, 2017 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
A. P.	Self-represented
City of Toronto	Jennifer Boyczuk+ and Melanie Shankar

MEMORANDUM OF ORAL DECISION DELIVERED BY SUBUOLA AWOLERI ON OCTOBER 30, 2017

INTRODUCTION

1A. P. (“Applicant”) lives alone in the subject property. The subject property is three bedroom link home built in 1982. The Applicant purchased the subject property in 2000 for $240,000. In the 2015 taxation year, all the property tax was paid in full with no interest or penalties. The Applicant filed this application to have his property taxes refunded on the basis of sickness and/or extreme poverty.

ISSUE

2Should the Applicant be granted a full or partial refund of the property taxes paid in the taxation year 2015 due to sickness or extreme poverty pursuant to s. 323.(1)(e) of the Act?

DECISION

3The Applicant should not be granted a full or partial refund of the property taxes paid in the taxation year 2015 due to sickness or extreme poverty pursuant to s. 323.(1)(e) of the Act. The Board determines that on a balance of probabilities, the Applicant would have been able to pay the property taxes for the 2015 taxation year despite his sickness and/or extreme poverty. The application is dismissed.

REASONS FOR DECISION

Legislation

4Section 323.(1)(e) of the Act provides:

Upon application to the city treasurer made in accordance with this section, the City 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,

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

5In 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

Sickness

6The Applicant presented corroborating documentary evidence of his sickness in Exhibit 1, a Doctor’s Statement, which provides that the Applicant suffers from Hepatitis “C”, and he experiences extreme fatigue and lack of energy and as a result of this sickness the Applicant has been unable to work since 2005. The Applicant also testified that he suffers from diabetes and glaucoma. The City takes no position on this.

7The Applicant advised the Board that he has limited resources to pay his property taxes. He wanted to build a website for a business but he lacked the financial resources.

8The Board must consider the Applicant’s ability to pay all or part of his property taxes due to sickness and extreme poverty.

Extreme Poverty

9The term “extreme poverty” is not defined under the Act. In determining whether the Applicant is in a situation of extreme poverty, the Board has to consider the evidence presented by the Applicant regarding his financial situation and a full spectrum assessment of the financial resources available to him in 2015, which is not limited to his income and expenses. This is relevant to a finding of extreme poverty and the Applicant’s ability to pay his 2015 property taxes.

Ability to Pay

Applicant’s Submissions

10The Applicant testified that he cannot secure a job due to his sickness. He also testified that his property tax payments are automatically withdrawn from his bank account, which his son repays him by cash and he does not deposit it into his bank account. He advised the Board that he had applied for other property tax relief from the City and he received an Elderly Rebate in reduction of his property taxes in 2015.

11The Applicant further testified that his son used the proceeds from the life insurance payment received upon the death of the Applicant’s wife to pay off the mortgage on the subject property. In Exhibit 2, he provides a letter from a lawyer dated November 28, 2005, which states that the Applicant’s mortgage has been paid off by his son on the condition that the Applicant will give back to the son an amount of $183,630, by making monthly payments to his son of $450 and concludes “…we are in the process of preparing this mortgage.” Further attached to this letter is charge registered in favour of the Applicant’s son for the principal amount of $183,630. The Applicant testified that the balance on the mortgage in 2015 was $128,700.

Source of Income

12The Applicant’s source of income for 2015 was from the Ontario Disability Support Program (“ODSP”) with a monthly income of $1,379.

Expenses

13A review of the Applicant’s financial information form, reveals a 2015 total monthly expense of $1,918.84, giving rise to a net income of (-$539.84).

14The Applicant’s income and expenses are summarized in the Income and Expenses Table below:

Table 1

Income/Expenses	Amount ($)
Income (monthly)	1,379.00
Expenses (monthly)
Mortgage	450.00
Property Tax	227.43
Home Insurance	70.00
Water	29.41
Heat	123.00
Hydro	132.00
Telephone	10.00
Groceries	300.00
Household supplies	50.00
Transit/TTC	80.00
Accident Insurance	11.00
Special diet	276.00
Internet	80.00
Meals- Outside	30.00
Clothing	50.00
Total Expenses	1,918.84
Net Income (Total Income less Expenses)	-539.84

Assets

15The City provided the assessed value of the subject property for the 2015 taxation year by MPAC as $507,000. The City argued that this assessed value may be higher based on the sale of a comparable property in October 2015 for $650,000. The Applicant testified that the estimated amount outstanding owing to his son on the mortgage is $128,700. The Applicant also had a balance of $1,431.44 in his bank account for the period ending December 11, 2015. The Applicant has no other liabilities.

16Table 2 sets out the breakdown of the Applicant’s assets and liabilities:

Table 2

Asset/Liabilities	Amount ($)
Assets
Home	507,000 (Value from MPAC)
Chequing Account	1,431.44
Total Assets	508,431.44
Liabilities
Mortgage	128,700.00
Net Assets (Total assets less liabilities)	379,731.44

17In conclusion, he submits that he seeks a refund of $1,000 from the total amount of $2,729.10, which he paid in 2015 as property taxes. He advised the Board that he would have been able to pay $1,729.10, with difficulty, although he paid the total 2015 property taxes owning, he submits that it will be “fair” get a refund of $1,000. In other words, while the Applicant did pay the full amount owing, he submits that he should be entitled to a refund of $1,000 from the taxes already paid.

City’s Submissions

18Jennifer Boyczuk, on behalf of the City, submits that the City opposes the application as the Applicant had the ability to pay his property taxes despite his sickness, which he paid fully without penalties and the application should be dismissed for the following reasons:

a. The Applicant has presented low income, this does not equate to extreme poverty. The Applicant paid all his property taxes in 2015 and as determined by the Board in N.H. v. Municipal Property Assessment Corp. Region No. 9, [2009] O.A.R.B.D. No. 1 (“N.H.”), low income is not the same as extreme poverty;

b. There must be a direct connection between the Applicant’s sickness and his ability to pay and the Board has to consider all the alternative financial resources available to the Applicant to pay his property taxes, as determined by the Board in the N.H. decision;

c. The Applicant has not explored options to mitigate his property tax obligation. He has not leveraged on the equity in his home as he submits that doing this will affect his ODSP payment. The equity from the subject property will supplement his ODSP payment. She cited E. B. v. Toronto (City), 2016 CanLII 45380 (ON ARB), [2016] O.A.R.B.D. Decision File No. WR 139943 (“E.B.”), where the Board determined that there was substantial equity in the home and there was no evidence that the Applicant had explored any option in accessing the equity in the home;

d. The 2015 property taxes was paid in full with no interest or penalty, this in addition to the evidence adduced at the hearing shows that the Applicant has the ability to pay;

e. The City has already applied an elderly rebate of $627.81 to the Applicant’s 2015 property taxes and a water rebate of $127.61 in 2015; and

f. The Applicant had a closing balance in his bank account of $1,431.44.

Board’s Analysis

19The 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.

20The Applicant provided a Doctor’s Statement, which corroborates the Applicant’s evidence of sickness. The Board determines that sickness exists, which fulfills the first part of the test.

21The Applicant testified that he lacked the income and sufficient financial resources to pay his property taxes. The Board will further determine if the Applicant is in a situation of extreme poverty in addition to determining whether the Applicant was unable to pay his property taxes due to sickness and/or extreme poverty. An analysis of the Applicant’s financial circumstances will be examined.

22The Applicant requested for a $1,000 refund from the total property taxes he paid in 2015. The Board has to determine if the Applicant qualifies for a $1,000 refund by examining amongst other things all financial resources available to him to meet his property tax obligation in said taxation year.

23The Applicant had a monthly deficit of -$539.84, despite this; he was still able to pay all of his property taxes in 2015. According to the Applicant, his son reimbursed him the amount of the property tax payment, but the Applicant did not deposit this reimbursement into his own bank account. Basically, his son paid his property taxes, which the Applicant did not have to repay. The Applicant did not testify during the hearing that he reimbursed his son for these payments. He testified that he utilized the amount he received from his son for other expenses. This is not a loan to the Applicant. This is additional financial support, corroborated by the Applicant’s testimony when he testified that he receives financial support from his son who has discontinued supporting him due to his son’s personal financial responsibilities.

24A review of the Applicant’s bank statement further reveals he would have been able to make the monthly property tax payment of $227.43. His opening balances each month does not reveal a deficit, in fact the opening balances each month excluding the months of February, April and May, in which he had opening balances of $138.55, $186.44 and $220.90 respectively reveals that the monthly payment of $227.43 could have been paid by the Applicant. In corroboration of this fact is the Applicant’s testimony of receiving financial support from his son. Furthermore, his bank statement for the period ending December 11, 2015 shows a closing balance of $1,431.44, which the Applicant testified will be utilized for the following month. On December 10, 2015 he had a balance of $228.08, which could also have been used to pay the monthly property tax of $227.43.

25The Board finds that based on this evidence the Applicant is not in a situation of extreme poverty.

26The Applicant had some discretionary expenses which includes purchases from the Beer Store, LCBO, Kitchen Stuff Plus and Yorkdale Adult (sic) totaling $205.14. This excludes purchases from Costco Wholesale and a payment of $216 made to the Ministry of Transportation Ontario (MTO), which the Applicant testified he made on behalf of his son. As further determined by the Board in E.D. v. Municipal Property Assessment Corporation (MPAC) Region 9 and City of Toronto, [2015] O.A.R.B.D., Decision File No. WR 128986, discretionary expenses must not take precedence over the payment of property taxes.

27The Applicant testified that he makes a mortgage payment of approximately $450 monthly without interest to his son. Evidence in form of receipts was not tendered to prove these payments. There was no document before the Board revealing the balance on the mortgage; the Applicant provided oral testimony of an estimate of the balance.

28The Board agrees with the City that there is substantial equity in the subject property which is accessible to the Applicant. During cross-examination, he admitted that he had not explored the option of renting out the two extra rooms in his home or applied for a loan or refinance since he was advised that it will affect his monthly income from ODSP and concluded that he has a right to receive ODSP. The Applicant also has an obligation as a home owner to pay his property taxes. As determined by the Board in the case of N.H.,:

“what is forgiven to one taxpayer is of necessity charged to all other taxpayers.”

29In G.H. v. The City of Toronto, O.A.R.B.D. Decision File No. WR 68915.

the Board determined that the Applicant had considerable equity in the home, which he “could draw upon to pay down the outstanding property taxes.”

30In E. B., the Applicant, the owner of the home was 81 years old suffering from various illnesses. She applied for relief from paying her property taxes due to sickness. Her net income was a deficit. The Board found that the Applicant met the first part of the test as there was evidence of sickness but failed to meet the second part of the test since she had not explored options on how to access the $280,000 equity in her home. The Board determined that:

“These applications are of last resort and the Applicant must have depleted all resources before making such an application. The Applicant must demonstrate in her application, that after managing her resources and expenditures, she has no further resources to meet the basic necessities of life in addition to paying all or some of her property taxes.”

31The Applicant in this application could have mitigated his property tax obligation by leveraging on the equity in his home or renting out the extra rooms in his home in order to minimize his tax burden. Notwithstanding, without utilizing the equity or renting out the extra two rooms, the Applicant was still able to pay all his property taxes without interests or penalties.

32On a balance of probability, the Applicant has demonstrated that despite his sickness and claim of extreme poverty he has the ability to pay the $1,000 refund he requested and all his property taxes in 2015, which he paid in full without interest or penalties.

33The Applicant advised the Assessment Review Board (“Board”) at the commencement of the hearing that he seeks a deferral of payment of his property taxes. He submits that upon his death, his son will pay the City of Toronto (“City”) all the outstanding amount. The Board advised the Applicant that this is beyond its jurisdiction and as read in its opening remarks, the Board obtains its authority from s. 323.(1)(e) of the City of Toronto Act (“Act”), which limits the jurisdiction of the Board to the powers delegated to it by the City to “…cancel, reduce or refund all or part of taxes levied on land…”

CONCLUSION

34The Board finds that the Applicant would have been able to pay all of his 2015 property taxes, which he paid in full in 2015. The Board determines that this application does not qualify for relief under the Act.

35The Board dismisses the application for the 2015 taxation year.