Canadian National Railway v. Municipal Property Assessment Corporation, Region 19, 2019 CanLII 114732

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

November 27, 2019

FILE NO.:

DM 2019M65

Moving Party(ies):

Canadian National Railway

Respondent(s):

Municipal Property Assessment Corporation (“MPAC), Region 19

Respondent(s):

City of Hamilton

Property Location(s):

2 Roadway NLCNR, 245 Queen Street North and 232 Stuart Street

Municipality(ies):

City of Hamilton

Roll Number(s):

2518-020-192-09060-0000, 2518-010-106-07000-0000 and 2518-020-125-58450-0000

Taxation Year(s):

Various

Hearing Event No.:

722965

Legislative Authority:

Section 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard:

September 23, 2019 by written submission

Parties

Counsel⁺/Representative

Submissions

Canadian National Railway

Mathias Hintikka

Moving Party

Municipal Property Assessment Corporation

Calvin Ho⁺

Received

City of Hamilton

David Janaszek

Received

DISPOSITION OF THE BOARD DELIVERED BY JEAN-PAUL PILON

DISPOSITION OF MOTION

1Canadian National Railway (the “Moving Party”) is the owner of three properties in the City of Hamilton situated in an area known as the Stuart Street Yard. These properties are identified municipally as 232 Stuart Street (2518-020-125-58450) (“Stuart”), 245 Queen Street (2518-010-106-07000) (“Queen”) and 2 Roadway NLCNR (2518-020-192-09060) (“Roadway”).

2The Moving Party brought this motion to extend time for bringing appeals and a direction that the assessment corporation be the applicant pursuant to section 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) because it appears that there are palpable errors in the assessment roll. The taxation years which are at issue in the motion are 2007 to 2016 for Stuart and 2007 to 2019 for both Queen and Roadway.

3MPAC and the City of Hamilton (the “Municipality”) would be parties to any appeals created if this motion was successful. They opposed the relief requested by the Moving Party in the motion.

4In essence, the Moving Party argued that since these properties cannot be conveyed separately, their existence as three properties instead of one in the roll are palpable errors which, when corrected, should result in lower assessed values and corresponding taxes.

5For the reasons that follow, this motion is denied.

REASONS FOR DISPOSITION OF MOTION

Facts

6The relevant parts of the three properties in question in this motion are oddly shaped lots that lie south of train tracks just south of Burlington Bay. Roughly speaking, Queen is the westernmost property, Stuart lies in the middle and Roadway is to the east.

7Queen to the west is essentially a rectangular parcel with slivers jutting out from its northernmost corners, east and west. The sliver of land that is important in this motion is a narrow one that goes east, bordering the north part of Stuart, which widens as it gets to Roadway.

8The Moving Party relied on the affidavit of Ernie Longo sworn on August 14, 2019. In his affidavit, Mr. Longo stated that “the single yard has been valued as three separate parcels of land since at least 2014,” and that “two of the parcels, (identified by roll numbers as Queen and Roadway) have been valued and taxed separately since at least 2009.” The Moving Party “pays taxes on each of these parcels each year,” and “larger acreages pay a lower rate per acre than similarly located small acreages.” Without saying which taxation year was being referred to, the affidavit specifically listed these tax bills as $218,335 per acre for the smallest piece, Stuart; $202,994 per acre for the medium sized piece, Roadway; and $145,627 per acre for the largest piece, Queen.

9MPAC relied on the affidavit of Paul Leslie sworn on September 3, 2019. He wrote that he inspected the properties on November 20, 2018 and that he “saw no way for someone to access (Roadway) from (Queen) without crossing (Stuart)”

10Mr. Leslie also stated that that Stuart was transferred to the Moving Party on November 15, 2013 by the Municipality, and that Queen and Roadway were “always” owned by the Moving Party except for a severance that is not relevant here. He also noted that property assessment notices for each property were sent to the Moving Party in all relevant years.

11The Municipality relied on the affidavit of David Janaszek affirmed on August 28, 2019. That affidavit noted that an appeal for Stuart was filed for 2017 and appeals were then automatically deemed by the Board in the normal course for the 2018 and 2019 taxation years. The Moving Party filed no prior Requests for Reconsideration (“RfRs”) for Stuart prior to 2017, only a single RfR for the 2017 taxation year for Queen, and only RfRs for the 2015 to 2017 taxation years for Roadway.

12The Moving Party’s reply submission alleged facts that were not supported by any affidavit, which is an issue addressed later in this decision.

Legislation

13Section 40.1(b) of the Act provides:

Correction of errors

b.1 If it appears that there are palpable errors in the assessment roll,

(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing appeals and direct the assessment corporation to be the appellant.

14Section 41 of the Act provides:

Roll to be binding notwithstanding errors in it or in notice sent to persons assessed

41 The last revised assessment roll shall, subject to subsections 37 (5) and (6), be valid and bind all parties concerned, despite any defect or error committed in or with regard to the roll, or any defect, error or misstatement in the notice required by section 31 or the omission to deliver or transmit the notice, provided that the provisions of this section in so far as they relate to the omission to deliver or transmit the notice do not apply to any person who has given the assessment corporation the notice provided for in subsection 31 (4).

15Section 50(3)(b) of the Planning Act, R.S.O. 1990, c. P.13 provides:

(3) No person shall convey land by way of a deed or transfer, or grant, assign or exercise a power of appointment with respect to land, or mortgage or charge land, or enter into an agreement of sale and purchase of land or enter into any agreement that has the effect of granting the use of or right in land directly or by entitlement to renewal for a period of twenty-one years or more unless,

(b) the grantor by deed or transfer, the person granting, assigning or exercising a power of appointment, the mortgagor or chargor, the vendor under an agreement of purchase and sale or the grantor of a use of or right in land, as the case may be, does not retain the fee or the equity of redemption in, or a power or right to grant, assign or exercise a power of appointment in respect of, any land abutting the land that is being conveyed or otherwise dealt with other than land that is the whole of one or more lots or blocks within one or more registered plans of subdivision;

Arguments

The Moving Party

16The Moving Party principally based its case on a submission that the facts before the Board in this motion are similar to those that were before the Assessment Review Board (the “Board”) in Canadian Tire Corporation Limited v. Municipal Property Assessment Corporation, Region 15, 2017 CanLII 3661 (ON ARB) (”Canadian Tire”).

17In that case, Canadian Tire owned three abutting parcels of land. Two of these were registered as a single parcel of land without the third. However, pursuant to section 50(3)(b) of the Planning Act, R.S.O. 1990, c. P.13 (the “Planning Act”), the third piece could only be conveyed with the other two because none of them were whole lots on a plan of subdivision.

18At para. 6 of Canadian Tire, the Board found that “the parties agree that the assessment of what is essentially one parcel of land under three separate roll numbers is a palpable error on the face of the assessment roll.” At para. 9, that decision found that “an incongruity between the assessment roll and the legal description of land is a common basis for a finding that there is a palpable error,” and at para. 10, that “the assessment roll should correspond to parcels that can be separately conveyed.”

19The Moving Party also addressed the issue of prejudice, because at para. 12, Canadian Tire cited Municipal Property Assessment Corporation, Region 09 v. Chew, 2015 CanLII 78969 (ON ARB) (“Chew”) where the Board determined that prejudice is a factor that must considered before relief can be granted where it appears that there is a palpable error in the roll.

20As was noted above, the Moving Party argued that it has been prejudiced by the alleged errors because of economies of scale, and surmised that its tax bills for each piece individually have been higher than they would have been had they been assessed as one. In support of this submission, the Moving Party cited Municipal Property Assessment Corporation, Region 28 v. Callander (Municipality), 2018 CanLII 110104 (ON ARB) (also known as Piggott v. Municipal Property Assessment Corp., Region 28, [2018] O.A.R.B.D. No. 300) (“Piggott”) at para. 22 where the Board held that “palpable errors that result in higher taxes always prejudice taxpayers.” In Canadian Tire at para. 13 the Board found that “MPAC has a duty to prepare an accurate assessment roll and is not prejudiced by the late filing.” The Moving Party also referred to 584952 Ontario Ltd v Municipal Property Assessment Corp Region No 9, [2007] O.A.R.B.D. No 792, 58 OMBR 353, 2007 CLB 13869, 2007 CarswellOnt 9535 at para. 34, that “the central theme of the Act that all properties shall be assessed, and they shall be assessed correctly.”

MPAC

21MPAC’s argument had three parts. The first part surveyed the statutory scheme for the determination of palpable errors, the second part argued that there were no palpable errors before 2013 when the Moving Party acquired Stuart, and in the third part, MPAC argued that the Board should not exercise its discretion in this case even if it determined there are palpable errors on the assessment roll.

Statutory Scheme

22MPAC argued that once the roll is returned, taxpayers have the responsibility to take steps to correct errors. Coupled with the objective of finality of the assessment roll, MPAC argued that balance is achieved through an informal means of appealing assessments with a firm limitation period, beyond which time the roll is binding on all those concerned.

23MPAC noted that the only exception to this statutory scheme in the Act is through the palpable error process in section 40.1 of the Act which “creates an extraordinary remedy that cannot be relied on by parties to appeal multiple taxation cycles with the benefit of hindsight when they did not pursue their appropriate remedies in a timely fashion,” citing Municipal Property Assessment Corp. v. Conservation Authority Grand River, [2018] O.A.R.B.D. No. 2 at para. 11 and others. MPAC also argued, however, that a party cannot rely on their own carelessness, citing the Board’s decision in 217-225 Richmond Street West Ltd. v. Ontario (Assessment Review Board), 1997 CanLII 26465 (ON CTGD), [1998] O.J. No. 35 (“Richmond”) at para. 1.

24MPAC went on to say that a party alleging a palpable error must first show that there is a palpable error in the roll, “an error of conspicuous magnitude; plain, evident, obvious and easy to understand” (Brockville (City) v. Municipal Property Assessment Corp., 2016 ONSC 5752 (“Brockville”) at para. 14 and Scott v. Municipal Property Assessment Corp., Region 15, 2015 CarswellOnt 2298 at para. 34) (“Scott”).

Palpable Error

25The second part of MPAC’s argument was that Queen did not abut Roadway until it acquired Stuart in 2013. The argument followed that if Queen and Roadway did not abut, then they were individual parcels that could be conveyed separately distinguishing these circumstances from those in Canadian Tire.

Discretion

26The third and final part of MPAC’s argument said that a potential appellant must then show that it would be “unreasonable, unfair and highly prejudicial to leave the assessment roll as it stands” for the Board to exercise its discretion pursuant to section 40.1 of the Act (Wellington (County) and Municipal Property Assessment Corp., Region 22, 2018 CarswellOnt 6018).¹

The Municipality

27The Municipality cited Hopper v. Municipal Property Assessment Corporation, Region 15, 2016 CanLII 24421 (ON ARB), (“Hopper”), which says at para. 13 that relief pursuant to section 40.1 of the should only be applied in the “clearest of circumstances,” that a palpable error must be “plain and obvious,” and that “an error in judgment can – and should – be properly addressed through an appeal to the Board.” It went on to cite Kinglip Holdings Inc. v. Municipal Property Assessment Corp. Region No. 9, 2015 CarswellOnt 1733 (“Kinglip”) at para. 41 that “section 40.1 would be rendered meaningless if parties were able to rely on it, with the benefit of hindsight, to create appeals spanning multiple taxation years and tax cycles.” The Municipality also noted that the Moving Party provided no explanation for its failure to file appeals in the normal course.

28Finally, the Municipality quoted the Board’s decision in York Condominium Corporation No. 60 v Municipal Property Assessment Corporation, Region 09, 2019 CanLII 39632 (ON ARB) (“York”) at para. 23:

More to the point, the prejudice to the Corporation and others who might have to pay for its error should not outweigh the fact that it would be unreasonable and unfair to reopen the roll when it was the Corporation that was entirely at fault for not filing appeals within the time allowed by the Act. Simple inadvertence cannot be enough to justify the exercise of discretion if such discretion is only to be exercised in a sparing way and only in extraordinary circumstances. It would render the time limit for filing an appeal meaningless and it would create a precedent that could be cited by anyone who had simply neglected to file their appeals within the statutory timelines. None of this could have been the legislature’s intent in enacting section 40.1 of the Act, and the Board has been clear in its decisions that this relief is to be granted only rarely and extraordinarily.

The Moving Party on Reply

29On reply, the Moving Party argued that the situation is the same as the one in Hopper in that it is “an error that mischaracterizes the fundamental nature or legal character of the property.” It argued that the question is one of fact and not judgment and “that these properties are connected and not subject to a plan of subdivision is not a matter of opinion or judgment.”

30The Moving Party also referred to its original argument in which it noted that this issue did not come to light until there was what is referred to as a “detailed review” of Stuart that led to the filing of appeals in 2017 for that property. The Moving Party cited Arbor Memorial Inc v Municipal Property Assessment Corp Region No 15, [2015] O.A.R.B.D. No 316, 2015 CarswellOnt 19579, 88 OMBR 320 at para. 28 where there was an argument that an appellant was “a sophisticated party who should have been able to figure out that there was an error in the roll in time to file an appeal…” The Board in that decision accepted “the uncontroverted evidence … that the landholding and related appeals were complex and that it was not until 2014 that (the appellant) realized that there was an error in the assessments of the 2004-2008 taxation years” at para. 30.

31The Moving Party’s argument on reply was then summarized as follows: “it is entirely reasonable that even a plain and obvious error might go unnoticed given the vast number of parcels owned by the taxpayer. Once the error was identified, the issue was brought forward.”

32In reply to MPAC’s argument, the Moving Party noted that “the ability to walk from one property to another is not the test of continuity.” It went on that “it is also not true in this case that one cannot access one property from the other.” Then, in its argument and not in any affidavit, it provided a copy of what was purported to be an excerpt from what was described as “MPAC’s own mapping information” which appeared to show a very narrow sliver of land connecting Queen to Roadway with Stuart on the south.

33The Moving Party argued that in York, where it was determined that a party could not rely on its own carelessness, the taxpayer alleging a palpable error was aware of the error but misunderstood the deeming provisions of the Act, whereas in this case the Moving Party did not know of the issue and acted when it came to its attention.

34Finally, the Moving Party argued that financial prejudice to the taxpayer must be considered pursuant to the Board’s decision in Chew and repeated that the Board determined in Piggott at para. 22 that “a taxpayer will always be prejudiced by palpable errors in the roll that increase the value of their land.” The Moving Party also noted that there was no evidence of evidence of prejudice from either the Municipality or MPAC in their submissions.

Analysis

Up to and Including the 2013 Taxation Year

35As noted above, the Moving Party sought to create appeals for Stuart for the years 2007 to 2016 and filed an appeal in 2017 when it became aware of the issues outlined in this motion. The Moving Party did not, however, acquire Stuart until 2013 and it provided no explanation as to why it would have any interest in creating appeals for a time period before the property belonged to it.

36The Board therefore determines there are no palpable errors in the roll for Stuart up to and including for the 2013 taxation year.

37The more significant question for that time period is whether Queen and Roadway abutted each other prior to Stuart’s acquisition in 2013 to bring it into the subdivision control provisions of section 50(3)(b) of the Planning Act. This is important because the Moving Party based its submission on the Board’s decision in Canadian Tire which determined that the assessment roll should reflect legal descriptions of land.

38Rule 64 of the Board’s Rules of Practice and Procedure (the “Rules”) provides that “evidence in a motion must be by affidavit, … unless the Board directs otherwise.” There were only three affidavits before the Board in this motion, one from each of the parties to the motion filed with their submissions. No affidavit was filed with the Moving Party’s reply submission.

39Mr. Longo’s affidavit said that the three addresses and roll numbers were adjacent and functionally one property that had been valued as three separate parcels of land. It exhibited maps it says were obtained from MPAC and from what was described as “the GeoWarehouse system,” but none of them conclusively showed that Queen and Roadway in fact abutted each other. This is important because it goes to the substance of the motion in its allegation of palpable errors for Queen and Roadway prior to the Moving Party’s acquisition of Stuart in 2013.

40The issue, put simply, is this: if Queen and Roadway did not abut each other prior to the Moving Party’s acquisition of Stuart, then there would be no palpable error. This is because they would not have had to have been conveyed together pursuant to the provisions of the Planning Act and could have been conveyed separately. As a result, the circumstances would not be analogous to the Canadian Tire decision upon which the Moving Party primarily based its motion.

41In his affidavit, Mr. Leslie denied that Stuart and Roadway abutted. Again, he said: “I inspected the CNR Properties on November 20, 2018” and “saw no way for someone to access 2 Roadway NLCNR from 245 Queen Street without crossing the (sic) 232 Stuart Street.” In its reply submission, the Moving Party questioned that conclusion, saying that a visual inspection would not have been helpful in determining whether a property abuts another.

42At the same time, however, it is an issue that should have been addressed in the Moving Party’s initial affidavit and was not, where the Moving Party had the burden of proof in the motion. The photographs and maps of the properties exhibited with the affidavits from the Moving Party and MPAC did not show that the properties abutted and it was predictable that this would be an issue in the motion when such reliance was being placed on Canadian Tire. All that would have been required to settle the question would have been for a plan of survey to have been attached to Mr. Longo’s affidavit, but none was.

43The Moving Party attempted to answer this issue retrospectively in its reply submission with a magnified map taken from MPAC’s public website which purported to show a tiny continuous strip of land that would have connected the two properties. The first issue with this submission is the question of the authoritativeness of MPAC’s website in determining Planning Act issues when it was presumably set up for a different purpose. The second issue is that this allegation was made on reply which deprived MPAC and the Municipality of an opportunity to respond to it. The third issue is that the Canadian Tire decision at para. 8 quoted para. 21 of the Chew decision that “anything that is subject to disagreement and requires evidence to prove it, cannot be said to be plain and obvious.”

44In short, the Moving Party failed to prove a central fact in its motion for this period of time, that Queen and Roadway were abutting properties prior to the Moving Party’s acquisition of Stuart. The Board therefore finds that there was no palpable error in the roll for the period 2007 to 2013 for Queen or Roadway because they were separate properties that did not abut each other and need not have been conveyed together to comply with the subdivision control provisions of the Planning Act.

Post-2013

Palpable Error

45There is no question however that once Stuart was acquired in 2013 that the properties could not be conveyed separately. Repeating Canadian Tire at para. 9, the Board found that “an incongruity between the assessment roll and the legal description of land is a common basis for a finding there is a palpable error (italics added).”

46The “common basis” referred to in Canadian Tire is indicative but not conclusive of a palpable error because there is a great deal of other jurisprudence to consider in the determination. In addition, the next question after determining that there are palpable errors in the roll is whether the Board should exercise its discretion to create appeals to correct them or, in this case, the creation of appeals.

47In a recent Board decision, Municipal Property Assessment Corporation (“MPAC”) Region No. 03 v Ottawa (City), 2019 CanLII 101175 (ON ARB), the Board summarized a selection of its caselaw (with citations abridged) to consider in determining whether a palpable error exists in the roll, which is underlined in parts for emphasis:

…a palpable error has to be plain and obvious, and readily or easily perceived (1012419 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 9, 2009 CarswellOnt 3819 at para. 11, Kinglip at para. 15 and Jolis Investments Ontario Ltd. v. Municipal Property Assessment Corp. Region No. 14, 2011 CarswellOnt 1822 at para. 10. A palpable error must be of “conspicuous magnitude” and “easy to understand” (Brockville at para. 14 and Scott at para. 34). A palpable error is more than an error in judgment by a party which would be the subject of an appeal (Kinglip at para 15 and Jolis at para. 10)

48The facts before the Board in this case meet most of these requirements, where after the Stuart acquisition the error was plain, obvious and easily perceived, particularly in view of the Board’s decision in Canadian Tire. In addition, although not ascertainable on the face of the roll, it was of conspicuous magnitude when considering the taxes involved, and it was relatively easy to understand with a brief explanation of the Planning Act.

49There is difficulty, however, in finding that the errors are “more than an error of judgment” because the Moving Party failed to file appeals after 2013 when it had the opportunity to do so, particularly when RfRs had been filed for some of the properties previously. The Moving Party also did not explain with any precision how or why it discovered these errors while it filed an appeal in Stuart for 2017 but not Queen and Roadway when it filed RfRs in the same year.

50In addition, the Board’s decision in Chew was cited by the Moving Party to say the Board is required to consider prejudice to each party before granting relief. However, in Chew at para. 18 the Board also determined that it must consider whether an error is truly inadvertent and unintentional in deciding whether an error is palpable and that the “how and why the purported error comes about may be very relevant.”

51There is nothing more in Mr. Longo’s affidavit explaining how or why these facts came to be. The Moving Party’s initial filing in the motion also failed to explain it other than to say that this issue was discovered when the Moving Party filed its Stuart appeal for the 2017 taxation year. It was only on reply, and in its submission and not in any affidavit, that the Moving Party wrote “that with holdings as complex as those of the Canadian National Railway a taxpayer might reasonable fail to notice such an error, plain and obvious as it may be.”

52Even outside of an affidavit, the Board can accept as common knowledge that the Moving Party, a very large and established railway concern in Canada, has extensive real estate holdings. However, leaving aside the Rule 64 issue that these factual allegations were not contained in an affidavit, the Board has difficulty accepting that an entity of the size, and complexity and sophistication of the Moving Party would fail to perceive that these properties were taxed separately, especially after its acquisition of Stuart. The Moving Party was represented by counsel when it acquired Stuart, where the registered Transfer for that property was attached to Mr. Janaszek’s affidavit. One of the tasks of counsel in that Transfer would have been to investigate the Planning Act implications of the transaction, and its solicitor on closing provided the standard form and required Planning Act statement in the Transfer document indicating that such inquiries had taken place. It would have been reasonable to assume at that point that the Moving Party would have or should have known that the abutting lands were separately taxed. It would have been even more obvious if the assessment roll number had been inserted into the appropriate box in the Land Transfer Tax Statements attached to the Transfer, which it was not. This would have shown to the Moving Party if it was not already obvious that Stuart had a different roll number from the other two properties.

Discretionary Relief

53The Board is not satisfied that these are palpable errors in the roll. Even if they were, the Board would not have exercised its discretion to create the appeals requested. It may well that the Moving Party is paying more tax than it would if the three parcels were considered one in the roll. It is also the case that the only evidence of prejudice before the Board in this motion is to the Moving Party where it says it is having to pay more tax than it should. However, prejudice is not the Board’s only concern when deciding whether to exercise its discretion in these cases. On this point the Board again references the Richmond and York decisions quoted above where simple inadvertence or carelessness is not sufficient justification to exercise the extraordinary remedy requested. There must be more, because the Board has consistently determined that correcting palpable errors is a rare and extraordinary remedy to be exercised sparingly. Otherwise, the time limits in the Act would be meaningless, and that could not have been the intention of the legislature in enacting section 40.1 of the Act.

54For these reasons the Board finds that the Moving Party has not met its burden of proving that the assessment roll contains any palpable errors for these properties. In any event, even if Moving Party had proven the existence of palpable errors in the roll, in these circumstances the Board would not have exercised it discretion to correct them through the creation of appeals.

CONCLUSION

55Canadian National Railway’s motion for an extension of time for bringing appeals and a direction that MPAC be the appellant is denied because the errors described in the motion are not palpable errors, nor would they have justified the exercise of the Board’s discretion if they were palpable errors.

Jean-Paul Pilon”

Footnotes

1. 1It is notable that in its recent review decision upholding Piggott (Piggott v Municipal Property Assessment Corporation, Region 28, 2019 CanLII 109527 (ON ARB)), the Board determined at para. 31 that “all tests converge to suggest that the Board’s discretion to grant a palpable error motion should only be exercised when it is clear that it would be unreasonable, unfair and highly prejudicial to penalize the parties for not meeting their statutory obligation in a timely manner.”