F.E.J.B. v. City of Mississauga, 2018 CanLII 96173

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 12, 2018

FILE NO.: WR 155899

Assessed Person(s): F.E.J.B.; M.B

Appellant(s): F.E.J.B.; M.B

Respondent(s): City of Mississauga

Property Location(s): Withheld

Municipality(ies): City of Mississauga

Roll Number(s): Withheld

Appeal Number(s): 3319165

Taxation Year(s): 2017

Hearing Event No.: 703672

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

Heard: September 19, 2018 in Mississauga, Ontario

APPEARANCES:

Parties	Representative
F.E.J.B.	Self-represented
City of Mississauga	Sean Doyle

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI

INTRODUCTION

1F.E.J.B., (the “Applicant”) is a 60-year old single woman who owns and lives by herself in the subject property which is a four-bedroom and four-bathroom custom made detached house with a finished basement. It has a total area building of 3,900 square feet (“sq. ft.”) with a two car garage. The Municipal Property Assessment Corporation’s (“MPAC”) assessment of the subject property is $1,362,000 for the 2017 taxation year.

2The Applicant filed an application with the City of Mississauga (the “City”) to have her 2017 property taxes refunded pursuant to s. 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25 (“Act”), due to sickness or extreme poverty.

ISSUE

3The issue before the Board is to determine whether the Applicant’s property taxes for the 2017 taxation year should be refunded as a result of the Applicant’s inability to pay due to sickness or extreme poverty.

DECISION

4The Board finds that, based on the evidence before it, the Applicant would have been able to pay her 2017 property taxes and in fact she paid it in full notwithstanding being sick. The Board finds that in 2017, the Applicant was not living in a condition of extreme poverty. The Board therefore, dismisses this application for the 2017 taxation year.

REASONS FOR DECISION

Legislation

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

357.(1) 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 her property taxes.

EVIDENCE AND ANALYSIS

Applicant’s Evidence and Position

Sickness

7The Applicant testified orally and in writing that she was her mother’s only caregiver before her mother passed away in 2016 at the age of 103. In addition, she went through a hard time for financial problems she encountered and stopped working in July 2017 after going on sick leave for medical reasons.

8The Applicant submitted a medical report from Dr. Michael Kates dated July 12, 2017, which stated, “the Applicant is currently incapable of working. She is followed medically. Fitness to return to work will be determined after a course of therapy and follow up.” The Applicant submitted that she was unable to pay her property taxes because of sickness.

Extreme Poverty

9The term “extreme poverty” is not defined under the Act. In determining whether the Applicant is in a situation of extreme poverty and is unable to pay her taxes because of such poverty, the Board has to consider the evidence presented by the Applicant regarding her financial situation, which is not limited to her income and expenses. The Applicant submitted that she was living in extreme poverty and was therefore unable to pay her property taxes.

10The Applicant submitted her life story in writing and also testified orally to the following.

11The Applicant stated that she and her brother lived in a small house with their parents, which was built in 1942, when their parents were married. After her father passed away in 2001, she decided with her brother and mother to demolish the house and build a new big house on the same land. In 2004, her brother passed away however, the Applicant and her mother decided to go ahead with their plan. In 2009, the house was demolished. The Applicant and her mother rented a house while the new house was being built. The Applicant stated that building the new house cost them $1,600,000. She stated that they encountered financial difficulties and had to use the equity in the house to borrow $390,000 in order to finish the new house. At the end of 2012 they moved into the new house. The Applicant testified that she worked in a retail store from 2014 until July 2017. She went on sick leave in July 2017 and collected employment insurance thereafter. She stated that their struggle with financial difficulties continued and made them unable to pay their property taxes effective 2012. Owing property taxes for six years (2012- 2017) in 2018, the collecting agency took $79,500, including interest and penalty, from the Applicant’s line of credit to pay the outstanding property taxes. The Applicant testified that she applied to increase her line of credit but was declined by the bank.

Applicant’s Financial Evidence

12The Applicant submitted a copy of the Form 1 – Financial Information and also provided evidence at the hearing regarding her total monthly income, expenses, assets and liabilities as detailed hereunder:

Income Total $1,649.75/month

Expenses Total $2,344.37/month

NET INCOME TOTAL $ -694.62/month

Assets Total

Assessed value of the house in 2017 $1,362,000

Liabilities

Home Equity Line of Credit $390,000.00

Credit Cards $ 34,372.63

Unsecured Line of Credit $ 9,695.84

Chequing Account $ 2,495.88

Liabilities Total $436,564.35

NET WORTH TOTAL $925,435.70

13Based on the information submitted in Form 1- Financial Information and the Bank Statements the net worth of the Applicant is $925,435.70.

City’s Evidence and submissions

14Sean Doyle, the City representative, advised the Board that the Applicant’s property taxes for 2017 are $10,810.38, which has been paid fully and that there is no mortgage on the house. He presented no observations or made any recommendations.

Board’s Analysis

15The 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.

16As noted in paragraphs 7 and 8 above, the Applicant’s evidence regarding sickness was not disputed by the City. The Applicant’s claim of sickness was supported by a written statement by Dr. Michael Kates. The Board finds this evidence to be reliable and persuasive and therefore finds that the Applicant satisfies the “sickness” portion of the test.

17The Applicant’s ability to pay her 2017 property taxes will be discussed in conjunction with the discussion about poverty.

18The Act qualifies the level of poverty as “extreme” and, in the Board’s view, this raises the level of requirement to qualify for relief under the Act to a level that is materially and substantially above that of the simple and ordinary meaning of poverty. The Board believes that 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.

19The Board has considered the oral testimony of the Applicant and has reviewed all of the evidence pertaining to her financial situation to determine whether the Applicant has to be refunded the 2017 property taxes and whether the Applicant was living in extreme poverty in 2017.

20The Board is not satisfied that the Applicant was unable to pay her taxes because of sickness nor that her circumstances rise to the level of “extreme poverty” for the following reasons.

21The Board notes from the City’s documents that the subject property is mortgage free and its assessed value in 2017 is $1,362,000. This is considerable equity on the house. Even if we consider the total liabilities of the Applicant for $436,564.35, her net worth stands at $925,435.70.

22Furthermore, the Board notes from the Applicant’s bank statement that in 2017, the Applicant has spent $5,183.20 ($431.93/month) on pet food and pet hospital. Although the Board is not questioning the Applicant regarding having a pet however, large expenditures as such are questionable considering the Applicant’s claim of living in extreme poverty and not being able to pay her property taxes. The property taxes have to be prioritized. This question was not put to the Applicant for her possible response.

23Moreover, the Applicant testified that she lives in a 3,900 sq. ft. house with 4 bedrooms, 4 bathrooms, 2 garage spaces and a finished basement. She was asked whether she has considered to rent out a part of her house to generate more income. She stated that she has not for she was advised against it.

24The Applicant was further asked whether she has considered taking a reverse mortgage. She stated that her friends did not advise her to do so. She stated that she intends to sell the house.

CONCLUSION

25Based on the reasons stated above, the Board finds that the Applicant did not establish that she had an inability to pay her taxes because of sickness, nor that extreme poverty existed in her case. In fact, the evidence reveals that the Applicant was able to pay her 2017 property taxes.

26The Board therefore dismisses the Applicant’s application and determines that this application does not qualify for relief under the Act.