Zarichansky v. Municipal Property Assessment Corporation, 2018 CanLII 70341

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 27, 2018

FILE NO.: WR 150192

Assessed Person: Ken Zarichansky

Appellant: Ken Zarichansky

Respondent: Municipal Property Assessment Corporation ("MPAC") Region 2

Respondent: Township of North Grenville

Property Location: 5300 County Road 19

Municipality: Township of North Grenville

Roll Number: 0719-716-040-20200-0000

Appeal Number: 3216555 and 3288965 (deemed 2018 appeal)

Taxation Year: 2017 and 2018 (deemed appeal)

Hearing Event No.: 688464

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

Heard: December 4, 2017 in Kemptville, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Ken Zarichansky	Self-represented
MPAC	Christina Smith
Township of North Grenville	No one appeared

DECISION OF THE BOARD DELIVERED BY JOSEPH JEBREEN AND SCOTT McANSH

1Ken Zarichansky appeals the assessment of his property located at 5300 County Road 19 in the Township of North Grenville for the 2017 taxation year. MPAC initially returned an assessment of $89,000 for the January 1, 2016 valuation date, but reduced its estimate of current value to $84,000 at the hearing of this appeal. Mr. Zarichansky submits that the correct current value is $55,000.

2For the reasons that follow, we find that MPAC has failed to discharge its statutory burden to prove the correctness of the current value of the property. We adopt the reasons in Patry Enterprises v Municipal Property Assessment Corporation, WR 152892 ("Patry Enterprises"), also released today, on the appropriate steps to take when MPAC has failed to meet its burden. We do not accept Mr. Zarichansky's unsupported opinion of the value of the property. We therefore reduce the assessment to the last uncontested value of $57,000.

3At this hearing on December 4, 2017, we were a three Member panel, with Member Robert Neron as the third Member. Member Neron resigned from the Assessment Review Board (the "Board") a short time later, and did not participate in writing this decision.

4After the hearing we asked the parties to make written submissions specifically regarding the consequences of MPAC failing to meet its burden under subsection. 40(17) of the Assessment Act (the "Act"). We received submissions from both parties by January 19, 2018. MPAC made submissions unrelated to our question of burden and provided further unsworn evidence in an attempt to justify its estimate of current value. We decline to consider those submissions and evidence because they were made after the conclusion of the hearing with no opportunity to challenge.

BACKGROUND

5The property is a 2,612 square foot single family detached residential dwelling on a 0.69 acre lot that backs onto the Kemptville Creek. The original dwelling was built in 1946 and an addition of 1,620 square feet was started in 1999. The addition remains unfinished and the property is located on a floodplain, so the addition cannot be completed.

6MPAC assigned the building an effective year built of 1978, a quality class of 4, and a condition of poor. The waterfront is overgrown and the shoreline is weedy.

ISSUES

7The only issue in dispute is the current value of the property. In addition to the 2017 taxation year appeal before us, we also have a 2018 taxation year appeal because, pursuant to subsection 44(26), a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was "not finally disposed of before March 31," 2018.

8We must first determine the current value of the property. In other words, what the property would have sold for in an arm's length transaction on January 1, 2016 for the 2017 taxation year. Once the current value has been determined, clause 44(3)(b) of the Act requires that we "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" but only if that adjustment would result in a reduction of the assessment.

9We do not have sufficient evidence to determine the current value here, and equity therefore has no application.

LAW AND ANALYSIS

10Subsection 40(17) of the Act states that MPAC has the burden of proving "the correctness of the current value of the land." The burden is around "current value" and not the assessment. That is, MPAC is not required to prove the correctness of their returned assessment. They are required to prove the correctness of "the amount of money the fee simple, if unencumbered, would realize if sold at arm's length from a willing seller to a willing buyer."

11MPAC correctly submits that the burden they bear is on the civil standard of a balance of probabilities, citing FH v. McDougall, 2008 SCC 53, [2008] 3 SCR 41. However, MPAC further submits that the Act requires us to determine if its case is more likely to be true than Mr. Zarichansky's case. That is not what is set out in the Act, nor is it how a burden of proof operates. We rely on our analysis of burden, the content of MPAC's burden, and the appropriate consequences when MPAC fails to meet its burden in Patry Enterprises.

12Patry Enterprises summarizes the appropriate procedure to follow in an appeal where current value is at issue, at paragraph 41:

...first look at MPAC's evidence on its own and make a determination as to whether it can prove its suggested current value on a balance of probabilities. If MPAC meets its burden, the Board should review all of the evidence before it and determine the current value of the property. However, if MPAC has not met its burden, the taxpayer's evidence must be analyzed to see if it is capable of proving that a particular current value is more likely than not. If there is no evidence in the record that is capable of proving current value, the Board should fix the assessment at the last uncontested assessed value.

13We will follow that procedure here.

Does MPAC's evidence support its suggested current value?

14MPAC presents five properties and admits that none of the five properties are comparable to the property. Specifically, MPAC agrees that all five properties are superior to the property. Those properties sold for between $170,000 and $272,000, and the only inference that can be drawn from that evidence is that the property is worth less than $170,000.

15MPAC also notes that the property benefitted from a cost to cure adjustment of $30,784, which was found by this Board in a 2011 decision, and from a -20% adjustment to the entire structure due to its incomplete condition. But MPAC failed to explain how that evidence leads to a current value of $84,000.

16MPAC submits $84,000 as the current value of the subject property based on the direct comparison approach, but gave us no comparable properties that reflect that current value. When we asked what value the -20% adjustment applied to, MPAC could not say. When we asked for an analytical pathway from the evidence presented to MPAC's proposed value of $84,000, MPAC was unable to provide one. MPAC submits that its current value was produced by its computer system but could not give any particulars of how the current value was calculated, or how the evidence it submitted supported a current value of $84,000.

17Simply put, at the hearing, MPAC provided insufficient evidence to support its suggested current value of $84,000.

18MPAC has failed to meet its statutory burden.

Does the taxpayer's evidence prove a current value?

19Mr. Zarichansky argues that the property is worth $55,000 because it is in a flood plain and is in a worse condition than it was on the last valuation day. He admits that he purchased the property in 1999 for just under $50,000, but insists that it would only sell for $55,000 on the January 1, 2016 valuation day.

20Mr. Zarichansky does not provide any comparable sales evidence, or any other objective evidence, to support his proposed current value. We do not find that the information he has provided is sufficient to prove that any particular current value is more likely than not.

Last Uncontested Assessment

21As indicated in Patry Enterprises, when neither party provides evidence that can support a current value, the Board should return the last uncontested value to the assessment roll. Here that value is $57,000. That is the assessment for the January 1, 2012 valuation day, which was never appealed. We therefore reduce the assessment for the 2017 taxation year from $89,000 to $57,000 and reduce the assessment for the 2018 taxation year from $84,000 to $57,000.

EQUITY

22We find that an equity assessment is not necessary when MPAC has failed to discharge its burden. We have not made a current value determination, but have instead imposed a previous assessed value due to MPAC's failure to discharge its burden. There is therefore no current value determined in clause 44(3)(a) to compare to the assessments of similar lands in the vicinity in clause 44(3)(b). Other land is assessed at its current value pursuant to subsection 19(1) while this property is not. It is likely that there will be an inequity that results from MPAC failing to discharge its burden, but the inequity is that the property is likely assessed lower than other property in the vicinity. That is not an inequity that clause 44(3)(b) can cure.

CONCLUSION

23MPAC has failed to meet its burden to prove the correctness of the current value. We therefore reduce the assessment from $89,000 to $57,000 for the 2017 taxation year and reduce the assessment from $84,000 to $57,000 for the 2018 taxation year.