2440781 Ontario Limited v. Municipal Property Assessment Corporation, 2018 CanLII 73666

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: August 1, 2018

FILE NO.: RR 2018M04

Moving Party: 2440781 Ontario Limited

Respondent: Municipal Property Assessment Corporation (“MPAC”) Region 27

Respondent: Town of Leamington

Respondent: 2320480 Ontario Limited

Property Location: 201 Erie Street North

Municipality: Town of Leamington

Roll Number: 3706-060-000-03000-0000

Appeal Numbers: 3035653 and 3092838

Taxation Years: 2014 and 2015

Hearing Event No.: 700983

Legislative Authority: Rule 122 of the Assessment Review Board’s Rules of Practice and Procedure

Request for: Reinstatement of appeals 3035653 and 3092838

Heard: June 15, 2018 by teleconference

APPEARANCES:

Parties	Representative
2440781 Ontario Limited	Akbar Bapoo
MPAC	Tom Elliott
Town of Leamington	Laura Rauch, Delores Jeffery, and Ginny Campbell
2320480 Ontario Limited	Geoff Watts

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH AND DAN WEAGANT

12440781 Ontario Limited (the “Owner”) is requesting that this Assessment Review Board (the “Board”) reinstate appeal 3092838. It made this request for reinstatement pursuant to Rule 122 of the Board’s Rules of Practice and Procedure (the “Rules”) on May 15, 2017 and Associate Chair Muldoon assigned this panel of the Board to hear its reinstatement request by motion.

2The Owner purchased 201 Erie Street North (the “Property”) in the Town of Leamington (“Leamington”) on March 12, 2015 from 2320480 Ontario Limited (the “Company”). On the sale date, the Company had unresolved appeals filed with this Board for the 2014 and 2015 taxation years. The Owner was under the mistaken impression that it could not file an appeal for the 2015 taxation year because the Company had already filed an appeal for that tax year. The Owner filed a request for reconsideration of the assessment of the Property for the 2016 taxation year and reached a negotiated resolution with MPAC through that process. The assessment for the 2016 taxation year was reduced from $3,882,000 to $3,673,000.

3The Owner was under the impression that the settlement with MPAC would apply to the 2014 and 2015 taxation year appeals filed by the Company. The Company was apparently unaware of the 2016 settlement and withdrew both the 2014 and 2015 appeals of the assessment of the Property on February 10, 2017. The Owner requested reinstatement of both of those appeals less than two weeks later, on February 22, 2017, and formalized his motion materials on May 15, 2017. MPAC, Leamington, and the Company all consent to reinstating the 2015 taxation year appeal.

ISSUES AND ORDER SOUGHT

4The Owner originally filed this request seeking the reinstatement of both appeal 3035653, for the 2014 taxation year, and 3092838, for the 2015 taxation year. The Owner abandoned its request of the 2014 taxation year at the hearing of this motion, so we will not consider it. For the reasons set out below, appeal 3092838, for the 2015 taxation year, is reinstated.

Rules

5Reinstatement requests are governed by Rule 122, which states:

122 Notwithstanding Rule 120, a party to a former proceeding may seek an order from the Board to reinstate an appeal by filing an affidavit with the Board, copied to all parties, no more than 30 days after the appeal was dismissed or withdrawn by the Board setting out that:

(a) the appeal was withdrawn, removed or dismissed in error;

(b) a party failed to appear at a hearing event through no fault of their own; or

(c) natural justice or procedural fairness require that the appeal be reinstated.

6Rule 122 has three components. First, it is only open to parties to proceedings that have been dismissed or withdrawn. Secondly, an affidavit must be filed no more than 30 days after the appeal was dismissed or withdrawn. Finally, the Board must be satisfied that one of factors in the three clauses is made out before the Board may reinstate the appeal.

Party

7The Owner was a party to the 2015 appeal. It purchased the property on March 12, 2015. Land is assessed against the owner, pursuant to s. 17(1) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). The parties to an appeal are set out in s. 40(11) of the Act and include “all persons whose assessment is the subject of the appeal.” Additionally, s. 40(28) makes any reference to an appellant a reference to the owner, if the ownership changes before the appeal is disposed of. The Owner was a party to the appeal under both provisions. The first component of Rule 122 is made out.

Timing

8The Owner filed this application in a timely way. It was filed with the Board 12 days after the Company withdrew the appeal. That is well within the 30 day limit set in Rule 122. The second component of Rule 122 is made out.

Natural Justice or Procedural Fairness

9There are only three grounds under which appeals may be reinstated. There is no indication in the record that this appeal was withdrawn in error, so clause 122(a) is not engaged. It is not possible that any party failed to appear at a hearing event because no hearing event was held for this appeal, so clause 122(b) is not engaged. This request must focus on questions of natural justice and procedural fairness, pursuant to clause 122(c).

10Natural justice and procedural fairness are flexible doctrines that ensure a minimum level of protection and fairness to parties. What is required to meet the standard of natural justice depends on the circumstance of each case, see Committee for Justice and Liberty et al v National Energy Board et al, 1976 CanLII 2 (SCC), [1978] 1 SCR 369 at page 395.

11Determining what particular protections are required for procedural fairness requires, among other things, a review of the legislative scheme, see Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 SCR 817 (“Baker”) at para. 24. The 2015 appeal was filed by the Company pursuant to s. 40 of the Act. The Act sets out a valuation day for each taxation year in s. 19.2(1). For the 2013, 2014, 2015, and 2016 taxation years the valuation day was January 1, 2012. That is, the assessment was based on the same valuation day for the appeals the Company withdrew and for the 2016 assessment that MPAC reduced after speaking with the Owner.

12MPAC’s consent reduction of the 2016 taxation year is an indication that MPAC considers the assessment of the Property for the 2015 taxation year to be too high. The Company’s withdrawal of the 2015 appeal harmed the Owner, who would have been entitled to a reduction in the 2015 assessment.

13The content of procedural fairness is also determined by the party’s legitimate expectations, see Baker at para. 26. The Owner expected to see an adjustment to its 2015 taxes based on the settlement it had reached with MPAC for the 2016 taxation year. Expectations cannot create substantive rights, but can shape the procedure required by natural justice. It is certainly legitimate that an owner expects to benefit from appeals of the assessment of its property that have been filed by others. It was also reasonable for the Owner to expect that the 2016 settlement would be applied to the 2015 appeal, given that they both rely on the January 1, 2012 valuation day. It is unclear why MPAC did not apply the new value to the 2014 and 2015 taxation year appeals in the time between the settlement with the Owner and the Company’s withdrawal.

14New owners may have rights pursuant to s. 40(28) of the Act that limit the ability of an appellant to withdraw an appeal as of right. While Rule 72 permits such a withdrawal for appellants, s. 40(28) makes the new owner an appellant for the purposes of the Act. We do not need to determine if Rule 72 is consistent with that provision of the Act, but that section of the Act certainly would make a new owner reasonably believe that their interest in filed appeals of their property was protected. The Owner’s interests were not protected from the Company’s unilateral withdrawal of the 2015 appeal. Fairness requires that the 2015 appeal be reinstated.

15Prejudice to parties is an underlying driver of any fairness assessment, so it is important to consider prejudice in any reinstatement request pursuant to Rule 122(c). We find that the prejudice here favours reinstating this appeal.

16Both the Company and the Owner are likely paying more in municipal taxes than they ought to, in light of MPAC’s changed opinion of the Property’s value for the January 1, 2012 valuation day. That is clear financial prejudice. There does not appear to be any prejudice from reinstating this appeal. MPAC and Leamington both consent to the reinstatement, and they are the only potentially negatively impacted parties. MPAC has a mandate to return correct assessments, so it is difficult to see how the reinstatement could be prejudicial to MPAC. Leamington also consented to this reinstatement request, effectively waiving any harm it may suffer in the financial uncertainty created by assessment litigation.

17The prejudice to the Owner and the Company far outweigh any prejudice to MPAC or Leamington. The balance of prejudice in this case engages natural justice and requires that the 2015 appeal be reinstated.

CONCLUSION

18The Owner’s reinstatement request for 2015 appeal is granted. Appeal 3092838 is reinstated and will be assigned a commencement date by the Registrar.