Donald Rennick and Susan Elizabeth Rennick v. Municipal Property Assessment Corporation (“MPAC”) Region 28, 2019 CanLII 14341

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 19, 2019

FILE NO.: RD 2019M04

Assessed Person(s): Donald Rennick and Susan Elizabeth Rennick

Appellant(s): Donald Rennick and Susan Elizabeth Rennick

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 28

Respondent(s): City of North Bay

Property Location(s): 392 Surrey Drive

Municipality(ies): City of North Bay

Roll Number(s): 4844-050-077-61200-0000

Appeal Number(s): 3235053 and 3314203

Taxation Year(s): 2017 and 2018

Hearing Event No.: 700567

Legislative Authority: Rule 123 of the Assessment Review Board Rules of Practice and Procedure

Request for: A review of the Board’s Decision WR 154343 issued on September 6, 2018

Heard: By written submission

Parties	Counsel+/Representative	Submissions
Donald Rennick and Susan Elizabeth Rennick	Self-represented	Requester
MPAC	No one appeared	Not Received
City of North Bay	Lisa Beaulieu	Received

DECISION DELIVERED BY PAUL MULDOON AND ORDER OF THE BOARD

INTRODUCTION

1Donald Rennick and Susan Elizabeth Rennick (the “Rennicks”) seek to have the decision of this Assessment Review Board (this “Board”) in Rennick v Municipal Property Assessment Corporation, Region 28, 2018 CanLII 84486 (ON ARB) (the “Decision”) reviewed. The Decision was issued on September 6, 2018 and this review was filed with the Board on October 2, 2018.

2MPAC did not provide any response to the Board’s request for submissions on this review and the City of North Bay indicated that it would not be making any submissions on this review. The Board therefore only had the Rennicks’ uncontested evidence to consider.

3The Rennicks complain that the Decision fundamentally misunderstood their submissions. They say that they did not contest MPAC’s sales evidence and that nearly all of their submissions were based on their reading of clause 44(3)(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). The Board is not satisfied that the Decision contains any significant errors of law or fact such that the Board likely would have reached a decision.

4The Rennicks also complain that the Board violated natural justice or procedural fairness in stating that they had a hopeless case before the hearing began and not considering jurisprudence that they properly submitted. Having reviewed the Rennicks’ submission, the Board is satisfied that a new hearing is required for these appeals.

5The Decision is cancelled and a rehearing of the appeals is ordered before a different panel of this Board.

ISSUES AND ORDER SOUGHT

6The Rennicks set out a number of alleged errors in the Decision, nearly all of which relate to a misunderstanding of their case. They have two main concerns: (1) that the Board did not properly interpret clause 44(3)(b) of the Act; and (2) that the Board breached procedural fairness or natural justice both by telling them at the start of the hearing that their equity submissions would be unsuccessful and by not reviewing jurisprudence that was submitted to the Board.

RELEVANT RULES

7Review requests must meet the procedural requirements of Rule 120 in the Board’s Rules of Practice and Procedure (Rules”) before they are considered. There are no procedural concerns with the Rennicks’ request. Reviews can only be granted if the provisions of Rule 121 are met: That Rule states:

121 A request for review will not be granted unless the Board is satisfied that:

(a) the Board acted outside its jurisdiction or violated the rules of natural justice or procedural fairness;

(b) the Board made a significant error of law or fact such that the Board would likely have reached a different decision;

(c) the Board heard false or misleading evidence from a party or witness, which was discovered only after the hearing and would have affected the result;

(d) there is new evidence that could not have reasonably been obtained earlier and would have affected the result; or

(e) any of the situations in Rule 122 exist.

8If the Board is satisfied that a provision of Rule 121 is met, the remedies available are set out in Rule 123, which states:

123 Upon consideration of a request for review, or on its own initiative, the Board may:

(a) dismiss the request;

(b) reinstate the appeal, with or without conditions; or

(c) after providing all parties an opportunity to make submissions,

i. confirm, vary, or cancel the decision,

ii. order a rehearing on all or part of the matter, or

iii. order a motion to decide the review.

ERRORS OF FACT OR LAW

9The Rennicks say that the Decision shows that they were not understood. The Decision states, at paragraph 5, that the Rennicks said that “sales evidence was not required to determine the [property]’s value, despite the Board explaining it was a legislated requirement.” They deny that claim. They also take exception to the Decision’s statement, at paragraph 32, that they “said that while [they] understood that sales evidence was required, for both determining current value and when considering equity, [they] disagreed.”

10The Rennicks state that their position was clearly that an adjustment was required pursuant to clause 44(3)(b) of the Act, which states that the Board must “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.” They say that the Decision erred in treating their submissions as being on current value.

11The Rennicks say that, in addressing clause 44(3)(b), the Decision was too focused on the sales of properties and did not address the value at which similar lands in the vicinity are assessed. They say that the Decision substituted an assessment to sale ratio for a true measure of if the assessment was equitable. They argue that clause 44(3)(b) cannot be used simply to measure MPAC’s success in determining current value. They submit that an equity assessment should “shine a fresh perspective on the issue” and that relying on sales to assessment ratios cannot achieve that.

12The Divisional Court recently considered clause 44(3)(b) in Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299. The Court focused on what is meant by “similar properties” and held, at paragraph 25, that “all points of comparison must be considered.” The Court also held in Municipal Property Assessment Corporation v Schumacher et al., 2016 ONSC 3239 (“Schumacher”) ,at paragraph 18, that clause 44(3)(b) “does not specify any particular methodology.”

13The Rennicks are correct that an adjustment pursuant to clause 44(3)(b) does not require an assessment of sales and how they relate to assessments. However, this Board held Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB), at paragraph 110, that the “best evidence that there is an inequity is a statistically reliable level of assessment study.” That study must be made up of similar property in the vicinity, and it is not the only way to measure the fairness of assessments, but there is no better metric to meet the standard set by the Ontario Court of Appeal in Re Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA). The Court of Appeal held that an assessment is “unequitable… if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred.” Only a level of assessment study can show the percentage of actual value at which properties are assessed.

14The Rennicks submit that clause 44(3)(b) is not about equity, but is rather about the equitability of assessments. They say that this means a uniform assessment and not a relation to the sales value of other properties. They rightly point out that the clause does not refer to sales, only assessments. The operative phrase in clause 44(3)(b) is that the Board must “adjust the assessment of the land to make it equitable with that of similar lands in the vicinity.” That is after having reference to the assessments of similar lands in the vicinity. The question is how to make an assessment equitable. That necessarily first requires a finding that the assessment is inequitable, or unfair.

15There is no set way of proving that an assessment is unfair. For instance, there was nothing wrong with the Rennicks’ submission that the assessment per square foot of two properties in the vicinity was a fair measure of equity. An assessment per square foot analysis was conducted by the Board, and upheld by the Divisional Court, in Schumacher. But that is not the only way to prove unfairness. A level of assessment study is compelling evidence because it can show that similar property in the vicinity is not assessed at its current value. Subsection 19(1) of the Act requires that all property be assessed at its current value. Evidence that other property is assessed below its current value can show that it would unfair, or inequitable, to assess this property at its current value. That is clear evidence of unfairness.

16An analysis of assessments per square foot of building space is not as compelling as a statistically sound level of assessment study. While it is likely that similar properties will be assessed in similar ways, buildings often differ in more ways than simply size. There are also economies of scale that should be expected in larger living spaces. Both of those facts make a comparison on only the assessment per square foot of building space an unreliable measure of fairness. Property must much more similar to compare assessments directly than is necessary in a level of assessment study.

17The Board must take the best evidence before it. It was open to the Decision to prefer MPAC’s level of assessment study over the Rennicks’ assessment per square foot evidence. The Decision found, at paragraph 42, that the level of assessment study of 30 similar properties in the vicinity “is the better evidence.” It was not in error in making that finding.

18The Board accepts the Rennicks’ argument that the Decision may not have properly conveyed their position at the hearing. But the Decision squarely addressed their assessment per square foot equity argument and made no error in preferring other evidence.

NATURAL JUSTICE

19The Rennicks also raise two concerns related to natural justice and procedural fairness. A violation of those standards is grounds for a review, pursuant to Rule 121(a). Their first concern is that the Member told them that their equity arguments would not be successful before the hearing began. Their second claim is that the Board erred in not providing jurisprudence that they submitted to the Member.

Open Mind

20The Rennicks say that when the hearing opened the Member told them that if they were hoping for a reduction in the assessment based on an equity adjustment, they would be disappointed. They say that this comment shows that the Member was biased against them and neglected his duty to act fairly.

21The legal test for when an apprehension of bias is present was set out by the Supreme Court of Canada in Committee for Justice and Liberty et al. v. National Energy Board et al., [1978] 1 SCR 369, 1976 CanLII 2 (SCC). The Court held that the test is “whether a fully informed reasonable person viewing the Member’s conduct practically and realistically would conclude that it is more likely than not that the presiding member did not decide the matter fairly.” It is likely that a reasonable person, hearing a Member say that a party’s main argument is hopeless, before hearing the evidence, brings into question the fairness of the hearing.

22Members of this Board are required to impartially adjudicate disputes that come before them. The Supreme Court of Canada held, in Wewaykum Indian Band v. Canada, [2003] 2 SCR 259, 2003 SCC 45, at paragraph 58, that the “essence of impartiality lies in the requirement of the judge to approach the case to be adjudicated with an open mind.” An opening address that summarily dismisses a party’s main argument is an indication that the Member did not approach the matter with an open mind.

23The Board cannot verify what the Member said at the hearing. It may be that the Member’s words were misinterpreted by the Rennicks or were simply out of context. There is no recording of the hearing and there is, therefore, no way to confirm or deny exactly what was said at the hearing, or in what context. In this review, the only evidence before the Board was filed by the Rennicks. That evidence is that the Member made comments which implied that he did not have an open mind. With no competing evidence, the Board is satisfied that there has been a breach of procedural fairness in how the Member opened the hearing.

Jurisprudence

24The Decision states, at paragraph 23, that the Rennicks “had two prior decisions of the Board that he wished the Board to consider,” and that they were notified that if they “wished the Board to consider those decisions then [they] had seven business days to provide those decisions to the Board.” The Decision goes on to say that “as of August 17, 2018 the Appellant had not responded to the Board's direction.” The Rennicks say that they emailed the cases to the Board before that date and that the Decision unfairly assigned them the blame for the Member not receiving the cases.

25The two cases relied on by the Rennicks are Kwinter v Municipal Property Assessment Corporation, Region 9, 2015 CanLII 45097 (ON ARB) (“Kwinter”) and Gordon v Municipal Property Assessment Corporation, Region No. 30, 2017 CanLII 54407 (ON ARB) (“Gordon”). Kwinter is relied on for the proposition that the closest properties are those in the vicinity, and Gordon is relied on for an assessment per square foot methodology. While the Board always benefits from jurisprudence, neither of those issues were directly in dispute in the Decision.

26It is unclear why the Member did not receive and consider the jurisprudence. The only evidence before the Board is that the Rennicks did forward the jurisprudence, but it seems clear from the Decision that the Member did not receive the material. The uncontested evidence is that the Board received the jurisprudence, but it was not considered in the Decision. That may not be the fault of the Member, but is still a breach of the principles of natural justice pursuant to Rule 121(a). A party is entitled to have the Board consider and address their legal arguments.

Remedy

27Rule 123 sets out the remedies available. The Board may “…vary, or cancel the decision, or order a rehearing on all or part of the matter.” The Board cannot vary the Decision because this review cannot replace a fair, open hearing in which the Rennicks are heard and their arguments fairly considered. The Board therefore cancels the Decision and orders a rehearing before a different panel of this Board.