Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 08, 2019

FILE NO.: WR 157243

Assessed Person(s): Z. C.

Applicant(s): Z. C.

Respondent(s): City of Hamilton

Property Location(s): Address Withheld

Municipality(ies): City of Hamilton

Roll Number(s): Roll Number Withheld

Appeal Number(s): 3317666

Taxation Year(s): 2017

Hearing Event No. 706871

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

Heard: October 26, 2018 in Stoney Creek, Ontario

APPEARANCES:

Parties	Representative
Z. C.	E. C.
City of Hamilton	A. Tyutyunnik I. Sampat

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1Z.C. (the “Applicant”) lives with her divorced spouse, E. C., and two children in a single-family detached house, built in 2007. The Applicant is the only registered owner on title to the subject property. In 2017, the property taxes on the subject property were in arrears in the amount of $4,966.55 excluding penalties and interest. The Applicant had made two previous applications for relief in different taxation years to have her property taxes cancelled.

ISSUE

2The issue before the Assessment Review Board (the “Board”) is whether or not the Applicant’s 2017 property taxes should be cancelled, reduced or refunded as a result of the Applicant’s inability to pay due to sickness or extreme poverty under s. 357.(1)(d.1) of the Municipal Act, 2001 (“Act”).

DECISION

3The Board finds that the Applicant’s financial resources were insufficient to pay all her 2017 property taxes due to sickness.

4Accordingly, the Board orders the City of Hamilton (the “City”) to cancel the 2017 property taxes levied on the subject property in the amount of $4,966.55.

REASONS FOR DECISION

Legislation

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

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 order for the Applicant to qualify for relief, the Board must first determine if the Applicant had the ability to pay all or some of her property taxes. If the Applicant could pay her 2017 property taxes, she would not qualify for relief. If there is an inability to pay, the Board will determine if it was due to either sickness or extreme poverty.

Evidence and Analysis

Ability to Pay

Applicant’s Submission

7E. C’s name is not registered on title to the subject property. E.C. contributes to the household income and expenses and therefore his financial resources are relevant to this application. The Board has to review evidence from the Applicant and E.C., for the Applicant to discharge her onus of proving to the Board that she was unable to meet her 2017 property tax obligation.

8E.C. testified that due to the severity of their illnesses, they are unable to work and are both receiving funds from the Ontario Disability Support Program (“ODSP”). He also testified that one of their children also suffers from various illness which includes sever autism, sever obsessive compulsive disorder, anxiety disorder, and oppositional deficiency disorder. He testified that this child stopped school in Grade 4 and all their time is devoted to taking care of him. He further added that due the child’s medical needs he is extremely demanding and overweight. He mostly sleeps during the day and is active at night. He demands for food at night and if his expectations are not met, he gets angry and starts to destroy the house. They do not have the time to prepare the food when the demand is made and resort to fast food. According to E.C., this accounts for the huge expenses in groceries and fast food and the expenses towards repairs in the house. The second child is a full time student.

Source of Income

9The Applicant, E.C., and their son all receive ODSP. This is the major source of their income. In 2017, they received Child Tax Benefit (“CTB”) and some GST credit from the government. The total monthly household income for the 2017 taxation year was $3,867.03.

Expenses

10The household expense reveals a total monthly expense of $4,458.19, which provides a net income of (-$591.16).

11The household income and expenses is summarized in Table 1.

Table 1

Income/Expenses	Amount ($)
Household Income—Monthly	3,867.03
Expenses—Monthly
Mortgage & Loan interest on Line of Credit	922.52
Water Heater	23.41
Telephone	75.20
Insurance- House	100.00
Insurance- Car	113.06
Gas	130.00
Medication	55.00
Food	1,994.00
Transportation/Car Maintenance	50.00
Cable/Internet/Landline	150.00
Credit Card	45.00
Property Tax arrears	400.00
Clothing	100.00
Repairs to House & Pet Care	300.00
Total Expenses	4,458.19
Net Income (Total Income Less Expenses)	(-591.16)

Assets

12The only asset owned by the Applicant is the subject property. E.C., does not own any asset. E.C., testified that he operated a business but it was wound up in 2012, with a lot of debts. The City provided the value of the subject property for the 2017 taxation year as $458,000.

13The Applicant and E.C’s. assets and liabilities are summarized in Table 2.

Table 2

Assets/Liabilities	Amount ($)
Assets
Home	458,000 (Value from MPAC)
Total Assets	458,000
Liabilities
Mortgage	230,257.98
Line of Credit	28,200.98
Credit Card	56,304.63
Property Taxes	21,575.23
Additional Liabilities (No documentary Evidence)
Royal Bank of Canada (Business Line of Credit)	10,000.00
Canadian Imperial Bank of Canada (Business Line of Credit)	76,000.00
MBNA	35,000.00
Wells Fargo	38,000.00
Total Liabilities	495,338.82
Net Asset (Total Asset Less Liabilities)	(-37,338.82)

14The Applicant’s net worth is (-$37,338.82).

15In conclusion, E.C., submits that he was a successful business man, but his son’s illness started the stress in their lives. He was unable to sell his business and consequently had to wind it up. In 2001, he was involved in a car accident, and did not get enough compensation for pain and suffering. All these stressors added to the breakdown of the Applicant’s mental health. He added that they attempted to sell the subject property in 2013, whereby it was listed for sale for six months but it did not sell. He submits that if it had sold, they would still not have been in a better position as they would still be in debt as revealed in Table 2. He testified that they also attempted to obtain money from the equity in the house but were turned down by the bank. He submits that he understands that this is a temporary relief, however, there is no other way out for his family and urged the Board to cancel the outstanding 2017 property taxes.

Sickness

16The Applicant testified that since 2012, she was diagnosed with major depression. She has substance abuse addiction and has made numerous suicidal attempts. Due to this sickness, she has been hospitalized on several occasions and is unable to work. She did not provide any medical evidence to corroborate her testimony. The City did not dispute the Applicant’s evidence.

17E.C., presented an attending Physician’s Statement, which states that he suffers from numerous illness which includes cervical degenerative disc disease, obsessive compulsive disorder, and major depressive disorder. The Physician further states that there is no prospect for E.C. to return to work. The City did not dispute E.C.’s evidence.

18The Applicant advised the Board that this application is also made under extreme poverty.

City’s Submissions

19Irwin Sampat, on behalf of the City, submits that the City takes no position on this application. However, he made submissions regarding the Applicant’s evidence. Mr. Sampat submits that the expenses for groceries is high and submits in evidence a guide for the Cost of Nutritious Food Basket, which provides that for a family of four, the average cost per month is $965.16. He added that having reviewed the Applicant’s three months monthly expenses for groceries, he obtained an average monthly amount of $1,601.00. He submits that this amount is more reasonable and if this amount is used for the groceries instead of $1,994.00 provided by the Applicant, the Applicant’s net income will be (-$198.16).

20Mr. Sampat further submits that there are some discretionary food expenses, and in three months this results to an average amount of $518.72. Furthermore, he added that the Applicant did not provide corroborating documentary evidence for the additional debts totaling $159,000, which the Applicant claimed as additional liabilities. He requests that the Board exclude these debts from the Applicant’s liabilities resulting in a net worth of $121,661.18.

Board’s Analysis

21The intent of the legislation is to provide temporary 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. In this application, the Board must decide if the Applicant is unable to pay all or part of her property taxes due to sickness or extreme poverty. Either of these two eligible criteria not only requires an analysis of the Applicant and E.C.’s income and expense as provided by the Applicant in Table 1 above, but also an examination of all financial resources available to them, which will be used to determine if the Applicant could mitigate her property tax obligation.

22The Board finds that the Applicant did not have the ability to pay all her 2017 property taxes, due to the Applicant’s sickness.

23The Applicant has a deficit net income of $-591.16. Mr. Sampat submits that it should be $-198.16, using the three months average expenses spent by the Applicant for groceries. He presented a food guide to show that a “regular” family of four should spend $965.16 per month on groceries. However, despite presenting this evidence, he did not use the suggested amount in calculating the Applicant’s revised net income of $-198.16. He still used the Applicant’s three months average spent on food as revealed in the Applicant’s bank statement. This reveals an acknowledgement by the City that the Applicant’s situation is peculiar and cannot to be treated as a regular family. Regardless, the amount Mr. Sampat obtained as the revised net income is still a deficit and the Applicant would still not have been able to pay her property taxes. In addition, the Board accepts E.C’s testimony regarding his son’s extreme eating habits due to his medical needs and Mr. Sampat did not oppose this evidence.

24Mr. Sampat confirmed E.C’s testimony of an agreement the Applicant made with the City to make a monthly payment of $400.00 towards all her property tax arrears from preceding years. This shows that the Applicant is making an effort to reduce the property tax debt.

25Mr. Sampat further urged the Board to exclude the Applicant’s additional liabilities since there is no corroborating documentary evidence of proof of the debts. Mr. Sampat argued that by excluding these additional debts, the Applicant’s net asset should be $121,661.18, rather than $-37,338.82. The Board finds that this revised net asset makes no difference to proving the Applicant’s ability to pay all or part of her property taxes. E.C had testified that they had tried to leverage on the equity in the house but where declined by the bank. This evidence was not challenged by the City. They also tried to sell the house but were unable to sell it for six months. A net asset of $121,661.18 puts the Applicant in no better position as they were unable to access the equity in the home.

26This section of the Act was enacted for property owners. The fact that an Applicant owns a house does disqualify the Applicant from relief. However, the Applicant must demonstrate qualification for relief. The Act does not specify how many times an applicant can apply for relief. However, it is the expectation as determined in the case of G.J. v. Municipal Property Assessment Corp. Region No. 3 [2009] O.A.R.B.D. No. 27, (“G.J.”) that an applicant understands that these applications are of “last resort” and it is a temporary relief in order to preserve the applicant’s property. In G.J., the Board finds that:

… this subsection was intended to provide relief for someone in extreme need, who has made a valiant effort to honour obligations but can no longer do so due to “extreme” circumstances …

27In G.E.B. v. Municipal Property Assessment Corp. Region 18, [2016] O.A.R.B.D. No. 103, (“G.E.B”), the applicant applied for relief for three taxation years. The representative of the Township of West Lincoln (“Township”) adduced evidence at the hearing that the applicant had continuously applied for relief and was granted by the Board from 1996 to 2012. She submits that she was at loss to understand how the applicant was granted relief since 1996. The Board dismissed the application citing amongst other reasons that:

… it was not convinced that G.B. had made reasonable attempts to explore the various forms of assistance offered by the Township …”

28In this Application, the Applicant, in addition to demonstrating through the evidence that she could not have reasonably paid all or part of her 2017 property taxes, has further entered into an agreement with the City to make a monthly payment of $400 towards the outstanding property tax arrears. The Applicant has further explored means to leverage on the equity in the subject property.

29These applications are fact driven and determination must be made on the facts of each application. Applicants must present evidence relevant to each year in which the application is made. In other words, just because this application is granted this year, does not set the precedent that it will be granted in the future.

30The Applicant has demonstrated that after managing her resources and expenditures, she has no further resources to meet the basic necessities of life, and this is in addition to paying the amount of $400 towards the payment of the property tax arrears from previous years.

31The Applicant testified about her illness, although no corroborating documentary evidence was presented by the Applicant, the Board finds the Applicant credible in her testimony. The Board also accepts E.C.’s uncontested testimony regarding his sickness. Based on the reasons stated above, the Applicant has shown that she is unable to pay all of her property taxes due to sickness.

CONCLUSION

32The Board finds that the Applicant has established the requirements for the Board to make a finding that she is unable to pay all or part of her 2017 property taxes due to sickness and consequently qualifies for relief under the Act. The Board orders that the City of Hamilton cancels the 2017 property taxes levied on the subject property in the amount of $4,966.55.