1141557 Ontario Ltd. v. Municipal Property Assessment Corporation, Region 30, 2019 CanLII 3426

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 18, 2019

FILE NO.:

DM 157944

Moving Party(ies):

1141557 Ontario Ltd.

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”), Region 30

Respondent(s):

City of Greater Sudbury

Property Location(s):

2689 Kingsway

Municipality:

City of Greater Sudbury

Roll Number(s):

5307-010-018-01700-0000

Appeal Number(s):

3266036 and 3314625

Taxation Year(s):

2017 and 2018

Hearing Event No.:

709168

Legislative Authority:

Rule 47 of the Assessment Review Board Rules of Practice and Procedure

Heard:

January 11, 2019 by written submission

APPEARANCES:

Parties

Representative

1141557 Ontario Ltd.

Roman Andrzejewski

MPAC

Drew Samuels

City of Greater Sudbury

No one appeared

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH

11141557 Ontario Ltd. (the “Company”) seeks two orders from this Assessment Review Board (this “Board”): (1) an Order compelling MPAC to provide it with certain documents; and (2) an Order altering the Schedule of Events for its appeals in order to permit it to serve its Statement of Issues. MPAC opposes both the Company’s request for disclosure and its request for additional time to serve its Statement of Issues. The City of Greater Sudbury did not file any material in relation to this motion.

2The Company is seeking 11 categories of documents, all of which are broadly framed. It has not provided evidence to show that those documents are relevant or that their production would be proportional at this stage in these appeals. I therefore deny the Company’s disclosure request.

3I grant the Company’s request for an extension of time to serve its Statement of Issues. The Board’s handling of this motion was exceptional and the balance of prejudice favours extending the time to file the Statement of Issues. I therefore alter the Schedule of Events for these appeals, as set out below.

Disclosure

4Rule 45 requires that all parties “provide a copy, in paper or electronic form, of all relevant documents in the possession, control or power to all other parties in the proceeding.” The Schedule of Events assigned to an appeal sets out the timing for each party to provide its documents to the other parties. By week 4 of the schedule “MPAC provides initial disclosure to all other parties.” By week 21 “each Appellant provides its disclosure and Statement of Issues to all other parties.” Next, by week 46, “each party who responds to the Appellant(s) is to provide its Statement of Response and any additional supporting disclosure.” Finally, by week 50, “each Appellant [is to] provide its statement of reply and any additional disclosure to support of its reply to all other parties.”

5In addition to the Board’s Rules of Practice and Procedure (the “Rules”), the Board has provided guidance documents to help the parties understand their disclosure obligations. The Guideline on Disclosure Requirements for General and Summary Proceedings (the “Disclosure Guideline”) discusses the timing of disclosure and sets out a list of documents that are presumptively relevant to common issues raised in appeals. The Board has also issued a Guideline on How to Interpret the Schedule of Events for General Proceedings (the “Interpretation Guideline”). That document explains that the term “relevance” in an “appeal proceeding… means that it must relate to an issue that is in dispute…” which are “defined through the parties’ Statements of Issue, Response and Reply.”

6The Company submitted three previous decisions of this Board related to requests for documents. GlaxoSmithKline Inc. v Municipal Property Assessment Corporation, Region 15, 2017 CanLII 6540 (ON ARB) (“Glaxo”) , Explorer Drive Equities Inc. v Municipal Property Assessment Corporation, Region 15, 2017 CanLII 43957 (ON ARB), and Grossman Holdings Limited v Municipal Property Assessment Corporation, Region 9, 2017 CanLII 21099 (ON ARB). None of those decisions are of assistance because they do not use the relevance standard to determine when documents should be disclosed. As noted in Municipal Property Assessment Corporation, Region No. 16 v Champlain Properties Limited, 2017 CanLII 38345 (ON ARB), at paragraph 9: “the new Rules have altered that existing jurisprudence, such the standard is now ‘relevance’ and not a ‘semblance of relevance.’”

7It is the party seeking documents that must show how the document is relevant to an issue in dispute, see Glaxo at paragraph 55.

8MPAC argues that disclosure must also be proportionate. It notes that Rule 5 states that the “Rules shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding…” The Ontario Courts have emphasized proportionally in recent decisions, such as Ontario v. Rothmans Inc., 2011 ONSC 2504. I agree with MPAC that it is important that disclosure orders be proportionate to the issues in dispute. A party should not be required to produce more than is required to resolve the issues in dispute.

9In summary, disclosure will only be ordered where the party requesting disclosure proves that the document is relevant to a specific issue in dispute. The Board must also determine if it would be proportionate to order the production of that document, in light of the issues in dispute.

Relevant and Proportional

10I must determine if the requested documents are relevant and if requiring their production would be proportionate. At this stage in these appeals no pleadings have been filed, so there is no specific guide to what issues are in dispute. This motion was also brought at week 5 in the Schedule of Events for these appeals. That is, the only disclosure obligation was MPAC’s initial disclosure.

11The Company’s property is a neighbourhood shopping centre that was valued using the income approach to value. The Interpretation Guideline states that “initial disclosure is not based on a determination that the documents provided necessarily relate to issues in dispute, because the issues in dispute have not yet been identified.” That document goes on to note that there is broad agreement that MPAC can meet its initial disclosure requirements through access to its AboutMyProperty website. Given that agreement in the community, the Interpretation Guideline says that “the Board does not anticipate receiving many, if any, disputes respecting initial disclosure.”

12The Company was sent the agreed initial disclosure package by MPAC on December 18, 2017. The Company requests 11 categories of additional documents.

13First, the Company is seeking a “list of all properties coded 430 within Greater Sudbury City showing January 1, 2016 assessment, site area, detailed building area, and Automated Cost System (ACS) printouts for each property.” MPAC argues that this is not relevant because the property was not valued using the cost approach to value. MPAC also says that the Company can see property details of up to 100 properties through the AboutMyProperty website. I accept MPAC’s submission that it has provided sufficient comparable property information. The Company has not proven that this broad list of properties is relevant to any particular issue in dispute.

14The second group of documents sought by the Company is a “list of all properties coded 430 within Greater Sudbury City that sold between January 1, 2013 and December 31, 2017, showing date of the sale, amount of the sale, lot size, building(s) size, and Automated Cost System (ACS) printouts for each property.” MPAC makes the same submissions on this class of documents as it did on the first set. I again agree with MPAC that the Company has access to sufficient sales through the AboutMyProperty website to allow it to prepare a Statement of Issues.

15The third category of documents is a “list of 24 properties coded 430 within Greater Sudbury City that were used by MPAC to value the subject property, showing all assessment information requested at point 1 and 2 above.” MPAC says that it did not use comparable sales to value the property, instead it used the income approach to value, so there are no such properties. The Company has not proven that there are 24 such sales, or how those specific sales are relevant to an issue in dispute.

16The fourth request made by the Company is for “inspection records and appraisal cards showing sketches of buildings for the subject property and comparable properties from point 3.” MPAC says that those documents do not exist. A party is only required to disclose “relevant documents in their possession, control or power,” they are not required to create documents. I accept MPAC’s evidence that no such documents exist, so they cannot be disclosed.

17The fifth item requested by the Company are the “policies and procedures used in valuing the subject property.” MPAC says that it already provided that information in its initial disclosure, which includes both Methodology Guides, which explain the assessment methods, and Market Valuation Reports, which showing how those methods are applied to property. The Company has not explained how the information provided is not sufficient.

18The sixth request is for all “information describing building use for properties from point 3.” MPAC argues that this information is not relevant. I agree that the Company has not provided any arguments on how this information is relevant to its ability to prepare a Statement of Issues. The property was valued using the income approach. While the Company may wish to argue that another valuation method is more appropriate, it is not MPAC’s obligation to build the Company’s case. MPAC has also provided a great deal of information on other properties through its AboutMyProperty website.

19Seventh, the Company seeks all “income and expense information used by MPAC to determine the 2016 based year current value assessment for 2017-2020 assessment cycle for each property requested under point 1, 2 and 3.” MPAC says that this request is overbroad. It states that it may consent to releasing information around particular properties but notes that section 53 of the Assessment Act, R.S.O. 1990, c. A.31 may limit its ability to provide certain information. I agree with MPAC that this request is framed far too broadly and that such a wide swath of data is not proportionate at this stage in the proceeding.

20MPAC makes the same submissions on the Company’s eighth request for all “leases, rent rolls and operating statements from the years 2013-2017 that have been provided to MPAC in order to determine the 2016 base year value assessment for 2017-2020 assessment cycle for each property requested under point 1, 2 and 3.” I agree that this request is overbroad and disproportionate. The Company can use the information from the AboutMyProperty website to determine which properties it would like more detailed information about. A blanket request, such as this one, is not appropriate.

21The Company’s ninth requested item is “Complete Gross Income Multiplier (GIM) analysis for the subject property.” MPAC argues that this does not exist because it used a capitalization of net income methodology to value this property, not a gross income multiplier. As noted above, parties are not required to create material for disclosure. I accept MPAC’s evidence that it did not perform a gross income multiplier analysis on the property. There is, therefore, none to disclose.

22The tenth request is for the “complete assessment to sale ratio (ASR) study relied by MPAC to support assessment of the subject property, including properties included in analysis and properties discarded and detailed explanation why they were discarded from the analysis.” MPAC states that is does not have such a study. Again, a party is not required to disclose documents that do not exist.

23The final documents sought by the Company are the “current valuation records for any similar property in the vicinity relied upon by MPAC to establish equitable assessment of only 2689 Kingsway Neelon, which is subject property.” MPAC again says that it did not attempt to establish an equitable assessment, so these documents do not exist. I accept MPAC’s evidence on that point. It cannot disclose documents that do not exist.

24None of the documents requested are relevant. This is largely because there are no specific issues in dispute at this stage in the proceeding. As a result, the requests are broadly framed. It is not appropriate for this Board to require broad and far reaching disclosure before the issues have been set out. The Board has set out what is appropriate initial disclosure for the vast majority of cases and MPAC has provided that information here. The Company has the burden to show why that general initial disclosure is insufficient. It provided virtually no evidence to explain why it needed the information it was requesting. A disclosure order should not be made with without clear evidence on the specific relevance of a document to the appeal. The Company did not meet that standard. Its request for disclosure is denied.

Extension of Time

25The Company argues that the time for it to file its Statement of Issues should be extended due to the time it took for this motion to be set. The Company first filed this motion on January 31, 2018. That was within the time for disclosure motions set in the Schedule of Events, which began on January 26, 2018 and ran until February 16, 2018.

26The Board responded to the motion request, by email, on February 20, 2018. The Board stated that it would not be proceeding with the motion and directed the parties to review the Disclosure Guideline and the Interpretation Guideline. The Board stated that it had “received a large number of disclosure motions which appear to have been made by appellants based on an erroneous interpretation that the Schedule of Events allows them only one opportunity to make all their disclosure requests in Week 5.” The Board advised the parties that if, after reviewing the Guidelines, they wished to make a disclosure request they would need to re-submit their materials.

27The Company resubmitted its material on March 7, 2018. The Board requested responses from the other parties on March 15, 2018 and again on May 7, 2018. MPAC responded on May 10, 2018 that it would send a response shortly.

28The Company’s Statement of Issues was to be served on the other parties on or before May 11, 2018. On that day it filed a request with the Board to extend the time for it to serve its Statement of Issues, based largely on MPAC’s failure to respond to its disclosure motion. It was seeking an extension of time until the Board responded to its disclosure request.

29The next correspondence in the record is a letter from the Board, dated November 23, 2018. That letter set the filing deadlines for this Motion, which was heard on January 11, 2019. The parties filed material in accordance with that deadline, which I have considered in this decision.

30Rule 82 states that, once a schedule of events has begun, “the Board will not alter any timeline set out in the schedule of events, other than in exceptional circumstances.” The Board recently considered that Rule in Mississauga (City) v Michalakos, 2018 CanLII 126632 (ON ARB). The Board held, at paragraph 8, that “the party seeking an extension must show exceptional circumstances before the relief can be considered… any prejudice to the parties must be considered before granting an extension of time.” But prejudice is only considered if exceptional circumstances exist.

Exceptional Circumstances

31The Board went on to consider what constitutes an exceptional circumstance, stating at paragraph 10 that “exceptional means, among other things, something that does not occur regularly, something unusual, or something atypical.”

32I find that an exceptional circumstance exists here. It is unusual for the Board to take nearly nine months to schedule a motion hearing. It is also unusual for MPAC to fail to respond to submission requests from the Board in a timely way. Both of those atypical situations left the Company in a state of uncertainty. Generally parties should continue with other procedural steps when a motion is filed. But the Company’s motion filed on May 11, 2018 was explicitly to extend the time to take the next procedural step. The Board has not address that concern until now. That is exceptional.

Prejudice

33Once an exceptional circumstance is made out, I must consider if the balance of prejudice favours extending the time. The Company would be significantly prejudiced if the time were not extended. It made this request in a timely way and it is all of the other parties that have caused the delay here. Rule 49 prohibits a party from raising issues that are not in their pleadings. The Company would therefore not be permitted to raise any issues at the hearing, unless time is extended.

34MPAC would also be prejudiced if time is not extended. Its Statement of Response was due on November 2, 2018. It did not file a response, likely because there is nothing to respond to. But Rule 49 would still prohibit MPAC from raising any issues at a hearing. It would be hard for MPAC to meet its statutory burden to prove the correct current value of the land, set in subsection 40(17) of the Act, without being able to touch on any issues at the hearing.

35The City of Greater Sudbury has not participated in the appeals to date. It is therefore difficult to assess the prejudice it faces. But it also would have had to file a response by November 2, 2018 and did not do so.

36The balance of prejudice clearly favours extending time. Both MPAC and the Company are significantly prejudiced if time is not extended. I therefore find that this is an appropriate case in which to extend the time set in the Schedule of Events. I find that an appropriate extension of time would be to set the date that these reasons are released as the date when a motion for disclosure was to be completed.

Conclusion

37The Company’s Motion for disclosure is denied. Its request was overly broad and not proportional for initial disclosure. It may be that more specific disclosure becomes necessary at a later stage in these appeals. But no disclosure is ordered at this point in the proceeding.

38The exceptional circumstance of this motion resulted in prejudice to all parties. I therefore extend the time in the Schedule of Events for these appeals as follows:

Event

Standard time period to complete event

Due Date

Motion for Disclosure completed (if required); MPAC provides any additional required disclosure.

3 weeks

January 18, 2019

Each Appellant provides its disclosure and Statement of Issues to all other parties.

12 weeks

April 12, 2019

Each party who responds to the Appellant(s) to advise if an inspection or any additional disclosure is requested.

3 weeks

May 3, 2019

Any objection regarding a request for an inspection or a request for additional disclosure is to be resolved by motion.

5 weeks

June 7, 2019

Where an inspection or additional disclosure is required, these are to be completed.

5 weeks

July 12, 2019

Each party who responds to the Appellant(s) is to provide its Statement of Response and any additional supporting disclosure.

12 weeks

October 4, 2019

Each Appellant to provide its Statement of Reply and any additional disclosure to support of its reply to all other parties.

4 weeks

November 1, 2019

All parties are required to schedule and complete a mandatory settlement meeting to attempt to resolve the appeal among themselves.

If the appeal is resolved, MPAC (or the Municipality, if MPAC is not a party to the appeal), must, on behalf of all parties, also:

i. advise the Board in writing that the appeal is being withdrawn or will be resolved through minutes of settlement; and

ii. advise the Board if the parties request an extension of the due date specified in the Board’s Rules for filing minutes of settlement with the Board.

If the appeal is not resolved, MPAC (or the Municipality, if MPAC is not a party to the appeal), on behalf of all parties, must also:

i. advise the Board in writing advise the Board in writing that the appeal has not been resolved, and

ii. advise the Board whether any of the parties intend to obtain any additional expert reports before the Board schedules a settlement conference or mediation;

12 weeks

January 24, 2020

If the appeal is not resolved, and none of the parties intend to obtain any additional expert reports, each party shall file with the Board

• its Statement of Issues, Statement of Response, and Reply (as the case may be);

• all documentary evidence, witness statements and expert reports on which the party intends to rely if the matter proceeds to mediation or a hearing; and

• its Settlement Conference Brief.

4 weeks

February 21, 2020