Bruce Easterbrook v. Municipal Property Assessment Corporation, 2019 CanLII 32434

Assessment Review Board

ISSUE DATE: April 9, 2019

FILE NO.: DM 158095

Moving Party(ies): Bruce Easterbrook

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 02

Respondent(s): Township of Athens

Property Location(s): 102 8th Line Road

Municipality(ies): Township of Athens

Roll Number(s): 0819-819-024-07105-0000

Appeal Number(s): 3262533 and 3288839

Taxation Year(s): 2017 and 2018

Hearing Event No.: 702069

Legislative Authority: Rule 45 of the Assessment Review Board Rules of Practice and Procedure

Heard: July 5, 2018 by written submission

Parties	Counsel+/Representative	Submissions
Bruce Eastbrook	Moving Party
MPAC	Walter Fleming and Laura Kelleher	Received
Township of Athens		Received

DISPOSITION OF THE BOARD DELIVERED BY DIRK VANDERBENT

REASONS

Background

1Bruce Easterbrook is the owner of a property located at 102 8th Line Road, Township of Athens (the "Subject Property"), which is a residential property.

2Pursuant 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 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016. ("current value").

3Mr. Easterbrook (the "Appellant") has filed appeals for the 2017 and 2018 taxation years with the Assessment Review Board (the "Board"), pursuant to s. 40 of the Act. These appeals are being heard by way of summary proceeding. The Board Rules of Practice and Procedure (the "Rules") provides for a Schedule of Events which sets out due dates for completion of pleadings and exchange of disclosure.

4In this proceeding, the Appellant has filed a Motion with the Board, pursuant to Rule 45 of the Board's Rules, requesting disclosure of information for both the Subject Property and a number of other properties. In overview, the information that he has requested relates to MPAC's valuation of these properties using its mass appraisal method.

5The Board directed that the Motion be heard in writing. Only MPAC has filed a response to this Motion.

DECISION

6The Motion is denied.

Relevant Legislation and Rules

7The Act:

1. "current value" means, in relation to land, 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.

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

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

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

44.(3) Same, 2009 and subsequent years. – For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) 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.

8The Board's Rules of Practice:

Proportionality

5. These Rules shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding and with a view to resolving appeals within the four year cycle.

Statement of Issues and Responses

38. Statements of issues and responses must contain:

(1) If the issue is current value:

a) the current value requested and how it is calculated;

b) a full statement of every issue that the party intends to raise, including identification of comparable property to be referred to, if any;

c) a list of all facts, legal grounds and documents that the party relies on in support of its position.

(2) If the issue is the equity of the assessment pursuant to section 44(3)(b) of the Assessment Act:

a) the assessment requested;

b) identification of the vicinity claimed by the party;

c) identification of similar lands in the vicinity to be relied on by the party;

d) how the party proposes to calculate the adjustment for equity; and

e) a list of all facts, legal grounds and documents that the party relies on in support of its position.

Disclosure

45. All parties must provide a copy, in paper or electronic form, of all relevant documents in their possession, control or power to all other parties in the proceeding, except for privileged documents.

Discussion, Analysis and Findings

The Test to be applied

9The test to be applied has been set out in Walmart Canada Corporation and Target Canada Corporation v. Municipal Property Assessment Corporation, Region 01, 2018 CanLII 67789 (ON ARB).

[18] Relevance is determined in relation to whether a document is relevant to an issue in dispute. However, this is not the only criteria that the Board will consider when determining whether a document, which may be relevant, should be disclosed. Rule 45, itself, provides an exception for privileged documents. In addition, Rule 5 provides that "These Rules shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding and with a view to resolving appeals within the four year cycle'. Therefore, the requirement to disclose relevant documents must also be applied in a proportionate manner. Rule 45 does not include specific criteria to assess proportionality. However, the Board finds that the criteria in Rule 29.2.03(1) and (2) of the Rules of Civil Procedure (Ontario) are applicable, namely:

1. the time required for the party or other person to answer the question or produce the document would be unreasonable;

3. the expense associated with answering the question or producing the document would be unjustified;

4. requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;

5. requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and

6. the information or the document is readily available to the party requesting it from another source.

7. whether an order for disclosure would result in an excessive volume of documents required to be produced by the party or other person.

The Board observes that this is a non-exhaustive list. There may be other criteria identified on a case by case basis.

[19] In applying the above criteria, the Board must balance these considerations against relevancy, i.e. the degree to which it appears that the document is relevant to an issue in dispute, and, if so, how probative this evidence may be. The onus to establish that a document should be disclosed pursuant to Rule 45 rests with the party who requests the disclosure.

[20] In addition to the above, it should also be noted that Rule 45 only requires disclosure of documents in a party's possession, control, or power. A party is not required to produce new information, or obtain documents that are not within its possession, control, or power.

Appellant's Submissions

10The Appellant explains that the disclosure he requests for each of the properties he has listed, is information describing MPAC's valuation of these properties using its mass appraisal method. He states that this information has been provided by MPAC in the past, respecting appeals heard in the previous assessment cycle. He provides a sample of this disclosure to describe the detailed information he is requesting. In overview, the mass appraisal method establishes a "base value" which is then subject to a series of adjustments to increase or decrease this value depending on various property specific characteristics. He asserts that this is the minimum he will accept as a detailed calculation of the current value.

11The Appellant notes that MPAC has refused to disclose the requested information. He argues that MPAC should not be permitted to decide which parts of its data base and its assessment software should be used to determine current value. He emphasizes current value is "anchored in reality by actual market sales." He maintains that MPAC is responsible to collect this sales data, interpret it accurately and fairly apply it to the properties that do not have an anchoring sale. He submits that it is the lawful right of the Board and the assessed person to question the accuracy of the data base and the interpretation of this data by MPAC. In support of this submission, he emphasizes that the burden of proof, by law, is on MPAC. He further notes that Rule 38 (1)(a) requires that MPAC produce how it calculated current value.

MPAC's Submissions

12MPAC submits that the Appellant has not provided any compelling reasons for the production of the requested information. MPAC argues that the requested information is not relevant, or alternatively, that it would be disproportionate to require this disclosure.

13MPAC emphasizes that it has prepared and produced a Valuation Report respecting the current value of the Subject Property on the valuation date, which utilizes the comparable sales valuation method, and that MPAC has prepared and produced Equity Analysis Report as well. MPAC asserts that it relies on these Reports as its evidence in this proceeding.

14MPAC submits that the Board must determine relevancy and proportionality when determining whether or not a document should be disclosed. MPAC argues that the information requested by the Appellant is not relevant and is disproportionate for the determination of current value.

15MPAC disagrees with Appellant's submission that he has the lawful right to question the accuracy of MPAC's database, stating that its burden of proof under s. 40(17) of the Act, requires only that it determine the correct current value.

16Regarding the relevance of information respecting MPAC's determination of current value using its mass appraisal method, MPAC submits that neither its database or model are under appeal. In support of this argument, MPAC relies on the Board's decision DM 32084 (Cogan v. Municipal Property Assessment Corp., Region No. 3 (July 22, 2004 – unreported, at page 5) ("Cogan"):

In this regard, the Board accepts the submissions of Mr. Mitchell that the issue is the correct current value for the property under appeal and not whether the model used by MPAC to arrive at values is correct. Simply put, the model relied upon by MPAC is a valuation tool and not a requirement of the Assessment Act. It is not the particular model that is to be tested on appeal, rather it is whether the current value of the property is incorrect (subsection 40(1)(a) of the Act).

MPAC also refers to Auerbach v. Municipal Property Assessment Corp. Region No. 03, [2010] O.A.R.B.D. No. 449, which cites Cogan with approval.

Findings

17In applying the test, the Board must first consider whether the requested information is relevant, and, if so, the Board must then determine whether it would be proportionate to order that it be disclosed.

18Regarding relevancy, MPAC argues that the requested information is not relevant because, as indicated in Cogan, the issue is not whether the model, i.e. valuation method, used by MPAC to arrive at current value, is correct. While the Board accepts that the correctness of the method itself is not under appeal, this is not, in and of itself, determinative of whether the requested information is relevant. A property valuation method is a means by which current value can be determined. In any given case, current value may also be determined by applying different valuation methods and comparing the current values derived using each method. In an appeal proceeding, the Board may be required to weigh which method provides the most probative analysis respecting current value. Therefore, the conclusion derived by applying a particular valuation method is clearly relevant.

19In this case, the Appellant's Motion also lists a number of other properties for which the Appellant requests disclosure, but he provides no indication, one way or the other, to explain how these properties relate to valuation of the Subject Property. MPAC has provided no submissions on this point. Absent any explanation of the Appellant's purpose in requesting information regarding these other properties, the Board cannot conclude that this information is relevant. Therefore, this part of the Appellant's disclosure request is dismissed.

20The Board now turns to the question of whether the requirement to disclose the requested relevant information is proportional to the complexity and importance of the issue is dispute. In this regard, the Board first observes that neither party has provided any detailed submissions on this point.

21The Motion materials do not provide any description of the mass appraisal method that MPAC utilizes to determine a property's value. However, the Board is sufficiently aware of this property valuation method through other Board Decisions to enable the Board to take notice of the basic parameters of this appraisal method. This method utilizes a complex statistical method, known as a multi-regression analysis, applied to a dataset of actual property sales in a specific area. This analysis produces the "base value" and adjustment factors described in the Appellant's request for disclosure. The value of a specific property is then determined by adjusting the "base value" based on property-specific characteristics.

22While MPAC has not submitted that the disclosure of the requested information would be voluminous, it is clear that the information required to properly document the application of this valuation method to the properties listed by the Appellant, would be complex, as the method itself is mathematically complex. Because the issue in dispute is the valuation of a residential property, and MPAC does not seek to rely on the mass appraisal valuation method as part of its case, the Board finds that there is a significant concern that the time and resources required for MPAC to provide comprehensive information respecting the mass appraisal method and its application to the properties listed by the Appellant, would be unreasonable.

23The Appellant has not indicated that he has the expertise to provide opinion evidence regarding the application of MPAC's mass appraisal method to determine property values, nor that he has retained an expert who can. MPAC has confirmed that it will not rely its mass appraisal method in this proceeding and, therefore, MPAC would not be calling evidence on the mass appraisal method as part of its case. In these circumstances, the Board finds that it is, at best, unclear how the requested information would be of assistance to the Board in the hearing of these appeals. Therefore, the Board finds that it is questionable whether this disclosure is proportional to the importance and complexity of the issues in this appeal proceeding. The Board similarly finds that it also questionable how probative the requested information would be.

24In conclusion, the Board observes that the Appellant bears the onus that a document should be disclosed pursuant to Rule 45. In this case, the Board has found it questionable whether disclosure of the requested information would be proportional to the complexity and importance of the issue in dispute, and also whether it would be probative if adduced at the hearing. Based on these findings, the Board concludes that MPAC should not be required to provide the requested disclosure.