Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

December 4, 2019

FILE NO.:

WR 162545

Assessed Person(s):

Lois Lipton

Appellant(s):

Lois Lipton

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 30

Respondent(s):

Town of Killarney

Property Location(s):

9 Channel Street South

Municipality(ies):

Town of Killarney

Roll Number(s):

5136-000-001-00200-0000

Appeal Number(s):

3207157

Taxation Year(s):

2016

Hearing Event No.:

724685

Legislative Authority:

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

Heard:

October 16, 2019 by telephone conference

APPEARANCES:

Parties

Counsel+/Representative

Lois Lipton

Self-represented

MPAC

Justin Johnstone, William Semenuk Jamie Conroy (observing), Shelby Roper (observing)

Town of Killarney

Candy Beauvais (observing) and Julie Solomon (observing)

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1Lois Lipton, (the “Appellant”) is the owner of 9 Channel Street (the “Subject Property”). This decision concerns the Appellant’s appeal of the 2016 assessment of the Subject Property. The Subject Property is a vacant commercial land, with a site area of 1,980 square feet or 0.045 acres. The MPAC characterizes the Subject Property as a waterfront property on the south side of Channel Street and is also a gravel parking lot. The Subject Property is used to park vehicles and has docks and slips which MPAC states are physically attached to the Subject Property.

2This matter was before the Assessment Review Board (the “Board) in 2015, where the Board issued a decision which provided the current value assessment (“CVA”) for the valuation date of January 1, 2012. In that decision, the assessment of the docks¹ attached to the Subject Property was not an issue, therefore the decision did not resolve it, which is the main issue between the parties in this appeal. Justin Johnstone, MPAC’s advocate advised the Board that at the 2015 hearing, only the value of the land was an issue. He further stated that MPAC missed the valuation of the docks on the Subject Property and issued a s. 33 for omitted assessment for the docks, which increased the assessment of the Subject Property for the 2016 taxation year, returned at $44,000. However, based on a revised assessment it was reduced to $27,000. MPAC wants the Board to confirm the assessment of the Subject Property at $27,000.

3The value of the land which MPAC provided as $6,966 is not in dispute between the parties. The main issue in this appeal as stated earlier, is the assessment of the docks attached to the Subject Property. The Appellant argued that the dock that she owns has zero value and the new docks owned by the tenant should not be assessed as part of the Subject Property. Therefore, the Appellant submits that the correct CVA of the Subject Property should be $6,966, which is only the value of the land.

4MPAC used the cost approach to value the Subject Property.

5Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), the assessment of land shall be based on its current value. The Act also provides that, for the 2013 to 2016 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2012 (“current value”).

6Pursuant to s. 40(11) of the Act, the Municipality, (in this case, the Town of Killarney) is a party to this proceeding. The Town was represented by Candy Beauvais and Julie Solomon who were both observing the hearing.

7At the completion of the hearing, the Board reserved its decision.

ISSUES

8The issues to be determined are:

i) Are the docks assessable under s. 1 of the Act? Does the ownership of the new docks by the tenant preclude their assessment as part of the Subject Property under s. 1 of the Act?

ii) What is the correct current value of the Subject Property for the 2016 taxation year?

iii) Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?

DECISION

9The Board determines that the docks are assessable under s. 1 of the Act and the ownership of the new docks by the tenant does not preclude their assessment as part of the Subject Property under s. 1 of the Act.

10The Board finds that the correct current value of the Subject Property for the 2016 taxation year to be $27,000.

11The Board finds that no further reduction in the current value is required to achieve equity.

12The Board reduces the assessment of the Subject Property from $44,000 to $27,000 for the 2016 taxation year.

REASONS FOR DECISION

Legislation

13In accordance with s. 44.(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land.” Section 1 of the Act defines current value as “the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.” That is, for the 2016 taxation year, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2012 valuation day set by the Act.

14The second mandate of the Board is provided in s. 44.(3)(b) of the Act which provides:

… The Board shall … 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 if such an adjustment would result in a reduction of the assessment of the land.

15Section 19.2(1)3 of the Act prescribes the valuation days, which provides:

Valuation days

19.2 (1) Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

3. For the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

16Section 1 (1) of the Act provides:

1 (1) In this Act,

“land”, “real property” and “real estate” include,

(a) land covered with water,

(b) all trees and underwood growing upon land,

(c) all mines, minerals, gas, oil, salt quarries and fossils in and under land,

(d) all buildings, or any part of any building, and all structures, machinery and fixtures erected or placed upon, in, over, under or affixed to land,

(e) all structures and fixtures erected or placed upon, in, over, under or affixed to a highway, lane or other public communication or water, but not the rolling stock of a transportation system;

17Section 3(1) provides that “all real property in Ontario is liable to assessment and taxation.” This section further provides real properties that are exempted from taxation.

18Section 40.(17) of the Act places “the burden of proof as to the correctness of current value” on MPAC.

Issue No. 1: Are the docks assessable under [s. 1](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html)?

MPAC’s Evidence and Submissions

19Mr. Johnstone submitted that the docks are assessable as land under s. 1 of the Act since they are attached to the Subject Property. He argued that s. 3(1) of the Act, provides that all real property in Ontario are liable to assessment, subject to certain exemptions and in reviewing these exemptions, docks are not included as exempted from taxation, contrary to the Appellant’s argument. He called MPAC’s witness, William Semenuk whose testimony provided the Board with a detailed review of the Subject Property including the physical description, the physical location of the docks, boardwalks and slips and how they are attached to the Subject Property.

Evidence of William Semenuk

20Mr. Semenuk prepared a valuation report respecting the Subject Property, dated September 9, 2019, which he submitted into evidence.

21Mr. Semenuk testified that he has been a property valuation analyst with MPAC since 1993 and he is familiar with the Subject Property. He testified that he last inspected the Subject Property on June 12, 2019, to ensure that the description of the Subject Property is still accurate. He testified that there is a combination of older and newer docks and slips on the Subject Property. He further testified that there is an older dock attached to a boardwalk and this boardwalk is attached to the Subject Property. He also testified that the new docks and slips are attached to the new ramp, which is physically bolted to the Subject Property. Essentially, he concluded that all the docks, boardwalks and slips are physically attached to the Subject Property. During cross-examination, Mr. Semenuk admitted that he was not aware if the docks were removed in winter, but he is certain that in the summer months the docks are bolted to the Subject Property. Furthermore, during cross-examination, Mr. Semenuk, confirmed that regardless of the ownership of the new docks, the docks are attached to the land and are assessable under the Act. Mr. Semenuk further directed the Board to the photographs of the Subject Property in MPAC’s valuation report which shows that the old and new docks including the floating docks and slips are all attached to the Subject Property.

22Mr. Johnstone presented the following relevant cases to support his submission that since all the docks are attached to the Subject Property, this shows a degree of permanency and are assessable as land pursuant to s. 1 of the Act.

23Carsons' Camp Ltd v Municipal Property Assessment Corp, [2006] OJ No 5373, 49 RPR (4th) 288, 153 ACWS (3d) 17, 27 MPLR (4th) 217, 54 OMBR 399, 2006 CarswellOnt 6927. (“Carsons’ Camp”)

The Applicant, Carsons’ Camp applied to the Ontario Superior Court of Justice to determine the validity of the assessment and taxation of seasonally used trailers located on the campground owned by Carsons. Parts of the campground were rented to the trailers for summer months. These trailers rested on their own weight on the campground and most were removed at the end of the season. MPAC in accordance to section 1 of the Act assessed the trailers as part of the land. In addition to its constitutional argument, Carsons’ argued that the value of the land should not have included the trailers as they were not part of the land. In addition to the constitutional issue, the court at paragraph 45 had to determine:

“whether these trailers, designed for recreational living accommodation during period May to October are structures placed upon land, and thus land”.

Allowing the application, the court held that the trailers did not form part of the land for the purpose of municipal tax assessment.

24Northern Broadcasting Co. v. Mountjoy (Improvement District), 1950 CanLII 9 (SCC), [1950] S.C.R. 502 (“Northern Broadcasting”).

The Supreme Court of Canada had to determine “… whether or not a transformer and a transmitter, located in a building on premises held by the appellant under lease and used for broadcasting purposes constitute “land”, “real property” or “real estate” within the meaning of the Ontario Assessment Act, R.S.O. 1937, c. 272, s. 1, clause (i), and liable to assessment and taxation as such under the provision of that statute.” Northern Broadcasting the appellant, leased a premises for 10 years, in which it used to operate a broadcasting transmitter station. The lease agreement had provision that permits the lessee to remove “all buildings, fixtures and structures erected on the land.” A transformer was erected in the basement and a transmitter on the first floor. The transformer and the transmitter rested on their weight on the floors. In order to facilitate broadcasting, power from high voltage lines was provided into the building to the transformer and by wires to the transmitter and using the same channel into the external broadcasting towers. The transformer and transmitter were assessed and their assessment was appealed on the ground that neither are land, real property or real estate within the purview of section 1 (1) (iv) (now section 1 (d)) of the Act. Dismissing the Appeal and affirming the decision of the Court of Appeal, the Supreme Court of Canada held that “both the transformer and transmitter were "land" within the meaning of the Statute and therefore assessable.”

Appellant’s Evidence

25The Appellant presented as part of her evidence a letter dated September 19, 2019, by Mr. Pitfield, the current tenant on the Subject Property. The Appellant advised the Board that Mr. Pitfield was unable to attend the hearing due to his work commitments. Mr. Johnstone did not object to the admissibility of this letter but submitted that the Board should attach minimal weight to it, as it is hearsay, since Mr. Pitfield was not available to be cross-examined on the content of the letter.

26Mr. Pitfield confirmed in his letter that the new dock system was installed in June/July 2012 and is attached to the Subject Property. According to Mr. Pitfield’s letter the new dock system is affixed to the Subject Property by means of a pin system, which is disengaged in October and about May/June the pins are re-installed. He stated that the newly constructed dock and floating docks at the east end of the property belongs to him and are his chattels. He emphasized that should the Appellant sell the property to a third party, he would remove the docks that he owns. He also stated that his lease with the Appellant is on an annual basis.

27The Appellant argued that excluding the old dock and boardwalk that she owns; the new docks and slips belong to the tenant and should be considered as chattels and should not have been included in the assessment of the Subject Property. She submitted that these chattels owned by the tenant lack a degree of permanence, since the Subject Property cannot be sold with these chattels and they are only on the Subject Property for 4 to 5 months of the year.

28She further argued that real property in accordance to s. 1 of the Act is to be owned by the owner. Although not explicitly stated in s. 1 of the Act, she argued that it implies that it refers to items owned by the owner. In this appeal she states that the new docks belong to the tenant and that in all the cases presented by MPAC it was the owner that placed the items of permanence on the properties.

29The Appellant submitted that in the definition of current value is the idea of permanency, which relates to fee simple ownership and since she does not have fee simple ownership of the docks owned by the tenants, which she classified as chattels they are not assessable as part of the Subject Property.

30The Appellant further submitted that the Carsons’ Camp decision is distinguishable from the present appeal as trailers are different from docks.

Preliminary issue

31Mr. Johnstone argued that the Board should attach little weight to Mr. Pitfield’s letter, and submitted that it is hearsay, since he was not available to be cross-examined on it.

32Section 15(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 ("SPPA") provides:

(1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court, any oral testimony; and any document or other thing,

33This section reiterates the jurisprudence that tribunals are not bound by the strict rules of evidence as courts; therefore, a tribunal may admit hearsay evidence if relevant to the proceeding. Mr. Pitfield’s evidence is relevant to provide further information on the ownership of the new docks and how and when they are affixed to the Subject Property.

Findings on Issue 1

Board’s Analysis – Are Docks Assessable under [s. 1](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html)?

34Section 3(1) of the Act provides that “all real property in Ontario is liable to assessment and taxation…” This section further provides some exemptions, which does not include docks. Section 1 of the Act provides that “land, real property and real estate include.

(d) all buildings, or any part of any building, and all structures, machinery and fixtures erected or placed upon, in, over, under or affixed to land,

35In order to determine if the docks are assessable under s. 1 of the Act, the Board must first determine if the docks are structures or fixtures “erected or placed upon, in, over, under or affixed to the land.”

36The evidence from the parties indicates that all the docks using the language in the Act are affixed (attached) to the Subject Property. Mr. Semenuk testified that the older dock is attached to a boardwalk and this boardwalk is attached to the Subject Property. He also testified that the new docks and slips are attached to the new ramp, which is physically bolted to the Subject Property. Mr. Pitfield states in his letter which was further corroborated by the Appellant that “The dock system was installed in June/July 2012 to the subject property and is affixed by means of a pin system from the end of the ramp leading to the docks to the rock face on land.” This is the qualification for the docks as a structure or fixture to be included as land, real property or real estate under s. 1 of the Act.

37The parties disagree on how the docks are affixed to the Subject Property. Mr. Semenuk testified that the docks are bolted to the Subject Property. The Appellant testified that the dock that she owns is attached by cribs and the new docks installed by the tenant are affixed by pins for easy disengagement. None of the parties testified that the docks are not affixed to the Subject Property. In fact, the Appellant confirmed in her testimony upon inquiry by the Board that the older dock which she owns should be assessed since it belongs to her as they have been on the Subject Property for approximately 30 years, although she disputes MPAC’s value. This implies that her argument is not that docks are not assessable under the Act. It is settled that the docks are affixed to the Subject Property. If affixed to the Subject Property, then the docks should be included as land/real property assessable under s. 1 of the Act.

38The sub-issue which arises as a result of the Appellant argument is:

Does the ownership of the new docks by the tenant preclude their assessment as part of the Subject Property under s. 1 of the Act?

39The Appellant argued that the new docks and slips should not have been included in the assessment of the Subject Property, since they are owned by the tenant and therefore does not form part of the fee simple interest. That the land cannot be sold with it as the tenant will remove it upon sale to a third party and furthermore, it lacks the degree of permanence, since it is installed for only up to 4 to 5 months of the year.

40Section 1 of the Act does not stipulate ownership of the land, real property and real estate. The Appellant argues it is implicit in it. Section 17(1) provides that:

Subject to section 18, land shall be assessed against the owner.

41In Carsons’ Camp, the Court referred to several decided cases, which the Board found relevant in the determination of this sub-issue:

42Myers v Ontario Regional Assessment Commissioner, Region No 32, 1991 CanLII 7078 (ON CTGD), [1991] OJ No 910, 3 OR (3d) 488, 81 DLR (4th) 149, 51 OAC 157, 4 MPLR (2d) 238, 27 ACWS (3d) 156 (“Myers”), Myers operated a mobile home trailer park on her properties. She leased specific areas of these properties to tenants. The legal agreement allowed the tenants to improve the properties by permanently placing on or affixing mobile homes to the land. The mobile homes were used as permanent residences, which rested by “their own weight permanently on the land and were connected to the land by water, sewer, electrical and telephone connections.” The trial judge held that “the mobile homes were "land" within the meaning of s. 1 (k)(iv) of the Assessment Act, separate and distinct from the land upon which they were affixed.”

43The Divisional Court allowing the appeal of the Regional Assessment Commissioner and Lakehead Board of Education, held that:

“Once the mobile homes became affixed to the land they became land, but the consequence of assessing the mobile homes separately after they had been affixed was to give them the character of chattels. This was contrary to the Act. The trial judge was wrong to conclude that mobile homes were parcels of land in their own right”.

44As determined in Myers, once the docks were affixed to the land they became part of the land. The distinction in Myers and this appeal is that the trailers were assessed separate and distinct from the land, which the Divisional Court disagreed with as this gave them the character of chattels. The fact that the trailers were owned by the tenant was irrelevant; they were still assessable, but not as separate and distinct from the land. MPAC in this appeal assessed the docks as part of the Subject Property.

45In Myers, the Divisional Court referred to the decision in Marley v. Sandwich (Town) (1932), 41 O.W.N. 178, (“Marley”) in which billboards were determined to be assessable as building under the Act. The court in Marley held that:

“Neither the fact that they remained the property of the tenant nor the fact that they did not add to the selling value of the land, could alter their character. These structures being part of the land, must be assessed under the Act, which did not provide for assessment of leasehold interests”.

46The Divisional Court in Myers concluded citing the decision in Vancouver (City) v. Canada (Attorney General), 1943 CanLII 23 (SCC), [1944] S.C.R. 23, [1944] 1 D.L.R. 497 that “the improvement of the character of the land by the addition of the structure may be included in the assessment against the owner of the land.”

47In Richmond and Richmond v. Ashton, 1961 CanLII 175 (ON HCJ), [1962] O.R. 49 (“Richmond”), the Applicants applied to the court for a declaration that certain machinery used on the premises were not assessable as part of the land under the Act. The Applicants leased their property for the operation of a coin laundry. The lessee put in washers and dryers for public use. The lease agreement included a clause that the lessee may remove his fixtures and equipment. The court found that:

“the assessment was correct. Section 1(i)(iv) of the Assessment Act, R.S.O. 1960, c. 23 defines land to include buildings and "all .... machinery and fixtures erected or placed upon, in, over, under or affixed to land". The question whether machinery has been placed upon land depends on whether it has been put in a particular location with the intention that it remain there during the period of its usefulness. Under this test, the washers and dryers were "land". The fact that they were subject to a conditional sales contract was immaterial”. [emphasis added]

48The Court further determined that:

“… the washing machines and dryers were installed for commercial use and that it never has been intended that they be moved during their period of usefulness. There is no evidence to suggest the contrary and, of course, the absence of that evidence is, in my opinion, fully explained by the fact that it was intended that those machines should remain in their present location and continue to have their present installations for as long as their utility for commercial purposes remained”.

49The Court went further to find that it will be irrelevant that the machinery was not fully paid for and could be removed at any time, the court specifically stated that “the Act does not make the definition of “fixtures” dependent upon ownership…”

50In addressing the degree of permanence, the Appellant argued that the new docks owned by the tenant lacked the degree of permanency as cited in Carsons’ Camp. In Carsons’ Camp the court held that:

“Seasonal trailers did not form part of land for purposes of municipal tax assessment-- Trailers were not placed on land with intention of permanence and did not form part of current value of land -- Trailers belonged to campers and not to Carsons and would not have increased value of Carsons' land if land was sold a third party -- Each trailer rested on its own weight and was not annexed to ground -- No intention that trailers would become Carsons' property”.

51The Board notes that in Carsons’ Camp, “each trailer rests on its own weight, above ground on its axles or wheels or deck blocks, that there is no foundation for such or underpinning of any of trailers to the land underneath and thus no annexation to the land.” This is distinct from the present appeal all the docks are affixed to the Subject Property.

52In Northern Broadcasting, the Supreme Court of Canada determined that:

“… it is sufficient in the present case to bring the two articles here in question within the meaning of "land" in the Statute, that they are heavy articles placed each in one particular spot with the idea of remaining there so long as they are used for the purpose for which they were placed upon the premises”.

53As determined in Richmond, the Board finds that the docks were placed in their particular location with the intention that the docks remained there during the period of their usefulness. The usefulness of the docks as provided in Mr. Pitfield’s letter and as testified by the Appellant is in the period between May/June to sometime in October. According to Mr. Pitfield’s letter, the pins are reinstalled in or about May/June, and the docks are re-attached to the Subject Property. In October of each year the pins are disengaged and the docks are removed from the Subject Property. This basically implies that there is some intention of permanence since they are not only attached to the Subject Property but are being utilized for the purpose in which they were installed and removed when the season does not permit the purpose. The fact that they are removed when not used does not remove the intention of permanency, since they would not have otherwise being used when the season does not permit it.

54The Board determines that the docks are assessable under s. 1 of the Act and the fact that new docks are owned by the tenant does not preclude their assessment as part of the Subject Property.

Issue No. 2: What is the correct current value of the Subject Property for the 2016 taxation year?

MPAC’s Evidence

55Mr. Semenuk testified that the cost approach to value was used to value the Subject Property. The direct comparison sales approach was not used since there are lack of comparable sales properties and the income approach could not be used since there was limited availability of income data. Mr. Semenuk testified that he had approached the Appellant years ago for income information, but he Appellant did not provide it. During cross-examination, Mr. Semenuk admitted that he did not request for the income information after the new docks were installed.

56Mr. Semenuk further testified that in order to estimate the current value of the Subject Property he used the following steps:

i. “Estimate the cost to acquire a site (without improvements) of similar utility to the subject property, including any site preparation work required.

ii. Estimate the current cost to produce improvements on the site with similar utility to the subject improvements, including entrepreneurial profit.

iii. Observe and estimate the accrued depreciation from all sources.

iv. Deduct the accrued depreciation from the current improvement cost.

v. Add the site value to the depreciated improvement value for the final estimate value.”

57MPAC used the Automated Costing System (“ACS”) to estimate the replacement cost new for all improvements on the Subject Property. Mr. Semenuk testified that in reviewing the ACS for the Subject Property, “docks are valued based on horizontal square foot area and boardwalks are valued based on liner feet along the shoreline. The newer docks and slips were valued as Ship/boat docks.” According to Mr. Semenuk this resulted in the 2012 CVA as $44,000 for land and improvements.

58Mr. Semenuk further testified that upon being advised by MPAC’s Cost Services Department that the docks should be valued as Small Power craft/Runabouts/Light Craft, the revised automated costing produces a revised value of $27,000 for land and improvements. He further directed the Board to the revised automated costing report attached to MPAC’s valuation report.

59Mr. Semenuk provided the estimate value of the Subject Property in this table:

Improvements

Value

Total Cost new

$40,953

Total Depreciation

$-20,476

Total Cost Less Depreciation

$20,476

Land value

$6,966

Estimate of Value using Cost Approach

$27,442 (rounded to $27,000)

60Mr. Johnstone requested that the Board finds the current value of the Subject Property for the 2016 taxation year as $27,000.

Appellant’s Evidence

61Apart from the Appellant’s oral testimony, the Appellant did not provide any evidence to the Board to prove that the dock she owns should be valued as zero. In the evidence the Appellant submitted to the Board, the Appellant asserts that the measurements provided by MPAC for the docks which includes the one she owns and her tenant is different from her measurements, consequently, a breakdown in the measurements is necessary, which will lead to a re-evaluation for assessment purposes. The Appellant also asserts that MPAC is not consistent in its approach in the valuation of docks used for rental income.

62The Appellant further questioned MPAC’s valuation of the boardwalk which belongs to her. MPAC using ACS valued it at $3,585, after deducting depreciation. The Appellant argued that given the age of this structure, of approximately 30 years old, it should be valued at zero. She concluded that since she does not own the new docks, and the dock she owns according to her has zero value, then the current value for the Subject Property for the 2016 taxation year, should only be the land value, valued as agreed by the parties at $6,966.

Findings on Issue 2

The Correct Current Value of the Subject Property for the 2016 Taxation Year

63There was no other evidence provided by the parties for other methods of valuing the Subject Property, other than the cost approach to value provided by MPAC. The parties testified that there are no comparable sales properties to compare with the Subject Property, therefore the direct sales comparison approach to value, which relies on comparable sales properties will not be applicable. The income approach to value was also not used by MPAC since the income information was not provided by the Appellant, when requested by MPAC, although Mr. Semenuk admitted that after the installation of the new docks, he did not request this information from the Appellant.

64The cost approach to value, is usually used when properties cannot be valued using the direct sales comparison and income approach to value. In the cost approach, the theory of substitution is used to estimate the value of the buildings/structures. The theory is based on the principle that a purchaser will not pay more for a property than it will cost to build a new one that performs the same function. However, the purchaser is not buying the replacement property but the Subject Property with its defects, therefore the cost approach takes into consideration the depreciation on the Subject Property, in order to arrive at the correct value of the property.

65There is no evidence of any income information or comparable sale properties before the Board. Consequently, the Board accepts the cost approach as the correct approach to value the Subject Property for the 2016 taxation year.

66The Board has determined that the docks owned by the tenant but affixed to the Subject Property should be assessed as part of the Subject Property. Only MPAC has provided evidence regarding the value attached to the docks. The Appellant disputes the value of the dock she owns but has provided no evidence of its zero value. This structure is still on the Subject Property and it is still being used. MPAC has provided a value of $3,585 after deducting the depreciation. The Board accepts this value.

67The Appellant also disputes the measurements of the docks on the Subject Property, which she argues affects the assessment of the Subject Property. The Appellant did not furnish the Board with what she believes to be the correct measurements of the docks. The Board accepts MPAC’s evidence of the measurements of the docks.

68The best evidence for the correct current value of the Subject Property has been provided by MPAC. The Board reviewed MPAC’s valuation of the Subject Property using the cost approach and determines that the correct current value of the Subject Property is $27,000 (rounded) for the 2016 taxation year.

Issue No. 3: Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.

Equity Analysis

69Section 44.(3)(b) of the Act directs that after determining current value, the Board shall 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 if such an adjustment would result in a reduction of the assessment of the land.”

70The burden of proof rests with the party that alleges that it would be inequitable to assess the Subject Property at its current value, and in this appeal is the Appellant. The Appellant has to establish, on a balance of probabilities, that an equitable reduction is required. The Appellant did not provide any evidence of this reduction, nor did the Appellant make any submissions in support of this reduction.

71The Board finds that there is no evidence to prove that an equitable reduction is required.

CONCLUSION

72Based on all the evidence, the Board determines that the docks are assessable under s. 1 of the Act and that the ownership of the new docks by the tenant does not preclude their assessment as part of the Subject Property under s. 1 of the Act.

73The Board also finds that the correct current value of the Subject Property to be $27,000 and determines that this correct current value requires no reduction for equity.

74The Board reduces the assessment of the Subject Property from $44,000 to $27,000 for the 2016 taxation year.

Footnotes

1. 1Reference to docks in this decision includes boardwalks and slips.