A.M.C. v. City of Toronto, 2019 CanLII 18809

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 04, 2019

FILE NO.: WR 155944

Assessed Person(s): A.M.C.

Appellant(s): A.M.C.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): City Toronto

Roll Number(s): Withheld

Application Number(s): 3260472

Taxation Year(s): 2017

Hearing Event No.: 691067 and 704268

Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c.11 Sched. A

Heard: June 25, 2018 and September 24, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

A.M.C.

Self-represented

City of Toronto

Jennifer Boyczuk⁺ Luis Verastegui

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1A.M.C (the “Applicant”) filed an application to the City of Toronto (“City”) to have her 2017 taxes reduced, cancelled or refunded because she was unable to pay due either to sickness or extreme poverty, under s. 323(1)(e) of the City of Toronto Act. (“Act”).

2The City has passed a by-law, delegating its authority to determine such applications to the Assessment Review Board (“Board”) under s. 323(11) of the Act.

ISSUE

3The issue before the Board is whether or not the Applicant’s 2017 property taxes should be cancelled, reduced or refunded due to the Applicant’s inability to pay because of sickness or extreme poverty. This requires the Board to determine a number of things. First the Board must determine, based on the evidence at the hearing, if the Applicant was unable to pay her 2017 property taxes. If the Board determines she was unable to pay her property taxes, the Board must then determine if the reason she was unable to pay was either sickness or extreme poverty.

4If the Board determines that the reason she was unable to pay was sickness or extreme poverty, the Board must then decide on the amount of the taxes levied to be cancelled, reduced or refunded.

DECISION

5The Board finds that the Applicant demonstrated that she was unable to pay the property taxes levied in 2017 and that the Applicant was unable to pay because of extreme poverty. The property taxes levied in 2017, in the amount of $3,463.73, are therefore cancelled.

REASONS FOR THE DECISION

Was the Applicant able to pay the Property Taxes levied in 2017?

6The Applicant reported a total annual income for 2017 of $18,183. This amount was made up from Ontario Works/Ontario Disability Support program payments of $4,942, Child Tax Benefits of $12,174, and support payments from her estranged spouse of $1,068. The average income per month was $1,515.

7The Applicant reported that monthly financial activity for the household is transacted through a single checking account. The balance on that account on January 1, 2017 was $1,061. The balance on December 31, 2017 was $307.

8The Board noted that regular transfers of approximately $800 per month move from the checking account to an unspecified account. These transfers were explained by the Applicant as being contributions to a trust account, set up to provide future support for her two children. The Applicant testified that this amount was offset by equivalent contributions to the account from her father.

9The Applicant testified that the subject property has a value of approximately $523,500 (the phased in assessment value for 2017). She has no other tangible assets.

10Monthly expenses reported by the Applicant for 2017 totaled approximately $1,787 per month. These expenses are summarized as follows (all rounded to the nearest dollar):

• Mortgage payments - $1,116;

• House Insurance - $61;

• Groceries and household supplies and clothing - $256;

• Utilities (heat, hydro water and sewer) - $157;

• Cell phone, telephone, cable and internet - $62;

• Other, non-specified - $30; and

• Property taxes - $105.

11The Applicant testified that there are no car loans or credit card debts. The mortgage balance is approximately $180,000. The subject property is further encumbered by a lien registered by Legal Aid Ontario in the amount of $5,234.33. This amount reflects the value of legal services rendered to the Applicant in connection with her settlement dispute with her estranged spouse and their impending divorce.

12The Appellant submitted that she had a difficult time meeting her obligations in 2017 and that a refund of the taxes paid would allow her to improve her family’s standard of living and would allow her to be less reliant on family for support.

13V.C. is the Applicant’s father and appeared in support of his daughter in this application. He testified that the transfers in question go to trust funds that he has set up for the applicant’s children and that these trust funds are intended to provide them with long term stability as their father has left, and their mother has an uncertain future. These transfers amount to approximately $10,000 and reflect, more or less, the amounts deposited by the Government of Canada in the form of child tax benefits.

14V.C. further testified that he and his spouse make their family car available to the applicant to run errands and to carry out the transportation requirements of the family.

15V.C. confirmed that, in order for his daughter to make ends meet, he regularly provides funds to her. The documents in evidence reveal that these payments amount to an average of approximately $800 per month, which is the same amount as the transfers to the trust account withdrawals.

The City’s Submissions

16The City submitted that the evidence before the Board strongly suggested that the Applicant was able to pay her property taxes in 2017. It submits that the money transferred to the childrens’ trust funds are discretionary and that even a portion of those transfers would have been sufficient to meet the tax obligation in full, while still leaving some money for future savings.

17The City also submitted that the sales of properties in the neighbourhood in 2017 indicate the value of the subject property actually approaches $800,000, reflecting a significant amount of equity that might be accessible to bring the 2017 tax account up to date.

18The City submitted that the Applicant paid $1,256 toward the property taxes in 2017. The original amount levied by the City in 2017 was $3,463.73, with an outstanding balance of $2,207.73.

The Board’s Analysis

19Monthly finances are not the only measure used by the Board to determine if an Applicant was able to pay property taxes. The Board regularly reviews overall financial conditions, including mortgage and other debts owing, credit card debt and other loans or commitments.

20The Applicant submitted that the matrimonial home is the major financial consideration between her and her spouse and that any proceeds derived from its sale or further mortgage have to wait until the divorce is settled.

21The Board notes the level of support the Applicant receives from her family, both monetary and emotional. Her parents should be commended for their commitment to their daughter and grand-children. When full stock is taken of the transfers in and out of the Applicant’s bank account in 2017, a number of things are evident.

22Firstly, the amount of money transferred to V.C for deposit to the children’s’ trust funds is nearly the same as the amount of cash support provided by V.C. to his daughter. This transfer back and forth results in the same monthly income of $1,515 for the household.

23Without property taxes included, the Applicant had monthly expenses of $1,682; representing a monthly shortfall of $167. The City did not refute the amount of this shortfall. Despite this shortfall, the Applicant made property tax payments averaging $105 per month.

24The Board finds that the Applicant has demonstrated that she was unable to pay the property taxes in 2017.

Was the Applicant Unable to pay because of sickness or extreme poverty?

25The financial situation experienced by the Applicant in 2017 shows that every month there was less money available than the expenses required to meet the basics of life for her and her children. The Board does not find that any of these expenses can be considered ‘discretionary’ or beyond the necessary expenses to provide the basics of the household.

26Extreme poverty is a condition in which the income a person or household is receiving is not enough to meet the basic necessities of life of that household. The expenses reported by the Applicant are related to food, shelter and basic communications. These are basic necessities of life.

27Accordingly, the Board finds that the Applicant was in a condition of extreme poverty and that this was the reason she was unable to pay the property taxes in 2017. Therefore, the property taxes levied in 2017, the amount of $3,463.73, are cancelled.