Godin v. Municipal Property Assessment Corporation, Region 4, 2019 CanLII 39629

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: April 30, 2019 FILE NO.: WR 158742

Assessed Person(s): Gerald Godin, Carole Godin, Luke Godin and Benjamin Godin Appellant(s): Gerald Godin Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 4 Respondent(s): The Township of Killaloe, Hagarty and Richards Property Location(s): Rich Con Road, RICH CON 6 LOT 35 Municipality(ies): The Township of Killaloe, Hagarty and Richards Roll Number(s): 4731-031-035-15700-0000 Appeal Number(s): 3320060 Taxation Year(s): 2018 Hearing Event No.: 707287 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended Heard: December 6, 2018 in Killaloe, Ontario

APPEARANCES:

Parties	Representative
Gerald Godin, Carole Godin, Luke Godin and Benjamin Godin	Self-represented
MPAC	Tom Chisholm
The Township of Killaloe, Hagarty and Richards	No one appeared

DECISION OF THE BOARD DELIVERED BY JOSEPH JEBREEN

OVERVIEW

1Gerald Godin, Carole Godin, Luke Godin and Benjamin Godin (the “Appellants”) appeal the assessment of their property with a legal description of Lot 35, Concession 6 in Richards Township (the “Property”). Gerald Godin (“Mr. Godin”) and his spouse Carole Godin (“Mrs. Godin”) attended the hearing, presented evidence and made submissions on behalf of the Appellants.

2MPAC returned an assessment of $138,000 and requested that I confirm their assessment as the correct January 1, 2016 current value of the Property. The Appellants take the position that the correct current value of the Property is between $94,500 and a maximum of $132,000.

3For the reasons that follow, I find that MPAC has failed to discharge its statutory burden to prove the correctness of the current value of the Property. Following the framework set out in Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2018 CanLII 70338 (ON ARB) WR 152892 (“Patry Enterprises”) on the appropriate steps to take when MPAC has failed to meet its burden, I find that the Appellants have not provided sufficient evidence to prove that a particular current value is more likely than not. I therefore reduce the January 1, 2016 assessment for the 2018 taxation year from $138,000 to the last uncontested assessed value of $102,000.

PRELIMINARY ISSUE RAISED BY THE APPELLANTS

4At the hearing, the Appellants asked that I confirm an agreement that they believe was reached with MPAC such that the current value of the Property is $132,000.

5Mr. Godin testified that he attended MPAC’s office on Lake Street in Pembroke with Mrs. Godin and met with an assessor named “Jennifer” in December 2017. The assessor representing MPAC at the hearing, Tom Chisholm, acknowledged that the meeting occurred with Jennifer Gruntz.

6After Mr. Godin explained certain features of the Property including that there was a large swamp, he alleges that he had an agreement with Jennifer Gruntz that the Property’s assessed value would be $132,000. Mr. Godin is adamant that he shook hands with Ms. Gruntz and that she advised that she would confirm the agreement in an email in January 2018. She also confirmed that Mr. Godin did not have to attend in person at MPAC’s office again and that he could simply reply to the email that he agrees to the value of $132,000. Mr. Chisholm has no knowledge of this agreement.

7When the January 2018 email did not arrive, Mr. Godin called MPAC’s Pembroke office in late February or March 2018 to speak with Ms. Gruntz, however he was advised that Mr. Chisholm was now taking carriage of the file. Mr. Chisholm advised Mr. Godin that he would review the file and get back to him.

8In April 2018, MPAC sent a letter confirming the assessed value at $138,000.

9The Appellants ask that I find that the current value of the Property is $132,000 based on the agreement that was reached with Jennifer Gruntz of MPAC in December 2017, before the within appeal was commenced.

10I do not have the authority to rule on whether an agreement was reached with MPAC. The Assessment Review Board (the “Board”) does not have the jurisdiction to determine whether a private contract was entered into by the parties during the request for reconsideration process. The Board can only exercise the powers conferred on it by statute, and there is nothing in the Assessment Act, R.S.O. 1990, c. A.31, (the “Act”) or any other statute that confers any jurisdiction on me to determine whether an agreement was reached with MPAC in the context of a request for reconsideration.

11I therefore do not make a decision on this issue.

BACKGROUND OF THE PROPERTY

12The Appellants purchased the Property as vacant land in June 2010 for $60,000. Since then, the Appellants constructed a 1,008 square foot hunt cabin in 2013. The hunt cabin is built at grade on a cement slab foundation and has four small bedrooms. The remainder of the space is open and contains a living room and a kitchenette with a counter, some cupboards and a gas stove. There is no bathroom and no plumbing generally. The kitchenette has a sink in the counter but the drain pipe goes directly outside.

13The Property consists of a total of 100 acres of land. However, Mr. Godin testified that there is a 1 acre pond and another 24 acres that is ash swale or swamp. Mr. Godin supported his testimony with a map from an application to the Ministry of Natural Resources’ managed forest tax incentive program. The maps were created by the Minister of Natural Resources and show approximately 25% of the Property labelled “Ash Swale.” MPAC does not rely on the Minister of Natural Resources map and does not agree that there are 25 acres of pond, ash swale or swamp on the Property. However, Mr. Chisholm confirmed that he did not visually inspect much of the 100 acres of the Property. I accept that the Property has a 1 acre pond and another 24 acres of ash swale or swamp.

14Also after purchasing the Property, the Appellants built up the existing private access road from Paugh Lake Road to the Property (the “Access Road”). Access to the Property from Paugh Lake Road is over Crown Land and then over the westerly neighbouring lands with a legal description of Lot 1 Concession 6 in Burns Township. Mr. Godin obtained permission from his westerly neighbours to build up the Access Road.

15The Appellants and MPAC spent a considerable amount of time regarding whether the Property is legally landlocked. Neither party presented case law, however I need not determine if the Property is landlocked. I find that the Property can only be accessed by the Access Road described above. There is no access to a public road or any access over a private road registered on title to the Property.

16Mr. Chisholm submitted that the Property is not landlocked because there is an unopened road allowance between the Property and the westerly neighbour at Lot 1 Concession 6 in Burns Township. I do not see how the unopened road allowance allows for access to the Property. The unopened road allowance is neither travelled, nor maintained. The Appellants cannot make use of this unopened road allowance and so cannot access the Property in that way.

17Mr. Godin testified that he had conversations with two municipal councillors, Brian Pecoskie and Stanley Pecoskie, in which he was told that the unopened road allowance would never be opened because there are too many swamps, wetlands and limestone in the vicinity. I accept this hearsay evidence as support for my finding that the unopened road allowance does not provide access to the Property. Even if the unopened road allowance were to open in the future, it was closed as of the January 1, 2016 valuation day and so the current value of the Property should be arrived at considering that there is no crystallized legal right to access the Property.

18MPAC further argues that the Township would not allow the creation of a landlocked parcel in a severance process, nor would it issue a building permit to a landlocked parcel. These arguments are not persuasive. Although landlocked parcels are rare, they do exist. Further, the fact is that the Property can only be accessed by the Access Road described above. The Access Road starts from Paugh Lake Road and passes through Crown Land and private lands that are not owned by the Appellants. There is no registered easement or right to use the Access Road.

19The Appellants may be successful in obtaining a legal right to access the Property via the Access Road or otherwise. However, that would require significant steps to be taken. This is a marked difference between the Property and other properties that have access by a public road or even by a legal right over a private road.

ISSUE

20The issues to be determined in this appeal are:

I. What is the correct current value of the Property for the 2018 taxation year?

II. Should there be an equitable reduction of the current value of the Property pursuant to subsection 44(3) (b) of the Act? If so, what should this reduction be?

LAW AND ANALYSIS

Current Value

21Subsection 40(17) of the Act states that MPAC has the burden of proving “the correctness of the current value of the land.” As this Board found in Patry Enterprises at paragraph 21, the burden is around “current value” and not MPAC’s assessment. That is, MPAC is not required to prove the correctness of its returned assessment. It is required to prove the correctness of “the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length from a willing seller to a willing buyer.”

22Patry Enterprises summarizes the procedure to follow in an appeal where current value is at issue, at paragraph 40:

…first look at MPAC’s evidence on its own and make a determination as to whether it can prove its suggested current value on a balance of probabilities. If MPAC meets its burden, the Board should review all of the evidence before it and determine the current value of the property. However, if MPAC has not met its burden, the taxpayer’s evidence must be analyzed to see if it is capable of proving that a particular current value is more likely than not. If there is insufficient evidence in the record that is capable of proving current value, the Board should fix the assessment at the last uncontested assessed value.

23I will follow that procedure here.

Can MPAC’s evidence prove its suggested current value?

24As stated in Patry Enterprises, at paragraph 23, in order for MPAC to meet its burden, MPAC’s evidence “must show how the current value MPAC is proposing is arrived at and why that value is correct. Without this bare minimum, the Board cannot possibly determine if MPAC’s proposed current value is correct.”

25Mr. Chisholm submitted a Valuation Report to establish an opinion of current value. As with most residential properties, MPAC relies on the direct comparison approach to prove its suggested current value of $138,000 for the Property.

26To satisfy its burden when using the direct comparison approach, MPAC cannot simply present any properties. It must review the market data and select properties that are in fact comparable. In his Valuation Report, Mr. Chisholm relies on six comparable properties in his current value analysis as summarized in the table below:

	Property	Sale 1	Sale 2	Sale 3	Sale 4	Sale 5	Sale 6
Address	Paugh Lake Road	32 Skelly Road	526 Doyle Mountain Road	48 Sunrise Road	32 Kuiack Lake Road	552 Wigry Road	1475 Roesler Road
Municipality or Township	Richards	Bonnechere Valley	Killaloe	Killaloe	Madawaska Valley	Madawaska Valley	North Algona Wilberforce
Distance from Property (km)		24	21	5	23	25	24
Access	Seasonal	Year round	Year round	Year round	Year round	Seasonal	Seasonal
Hydro/Plumbing	No/No *Generator and outhouse	Yes/Yes	Yes/Yes	Yes/Yes	Yes/Yes	Yes/Yes	No/No
Date sold		08/23/2012	01/07/2013	09/29/2017	03/15/2013	12/19/2017	10/16/2013
Sale Price ($)		160,000	165,000	130,000	150,000	150,000	230,000
Lot area (Acres)	100	24	4.0	0.34	1.4	73	200
Building area (sq. ft.)	1008	731	1080	1084, 2 floors	1016	756	794
Year built	2013	2008	2004	1980	1995	1991	1910
Secondary structure type		Detached garage	Sheds and barn

27These properties are not comparable to the Property for the purposes of using them to calculate a current value using the direct comparison approach. None of the sales are within the shoulder years of the January 1, 2016 valuation day. Although I would be prepared to accept the two properties that sold within two years of the valuation day (Sales 3 and 5 above) if they were in fact comparable, that is not the case.

28MPAC cannot tender a number of sales of properties that span a range of values and sale dates and submit that its proposed current value is correct because if falls within that range of values. The properties must be comparable. Mr. Godin submits that Sales 1 to 6 are not comparable to the Property and therefore cannot be used in a direct comparison approach. For the reasons that follow, I do not find MPAC has presented comparable properties.

29The only access to the Property is the Access Road, which is a private gravel road that is built on neighbouring lands and maintained seasonally by the Appellants. There is no legal right to access the Property. That is a significant difference as compared to Sales 1 to 6. All of those properties have a right of access to a municipal gravel road. Further, Sales 1 to 4 enjoy year round access as opposed to the limited seasonal access for the Property.

30Another significant difference between Sales 1 to 5 and the Property is that Sales 1 to 5 are all connected to hydro and plumbing. The Property has a generator to provide some electricity but that is far inferior to being connected to the hydro electrical grid. The Property also has an outhouse but again that is inferior to having plumbing, bathrooms and a waste management system.

31Sales 1 to 4 also appear to be single family cottages on smaller areas of land whereas the Property is a hunt camp on a large 100 acre parcel that is approximately 25% pond and ash swale. It is difficult to compare such different properties in a meaningful way. Mr. Chisholm attempts to say that the different features of these comparable sales offset the features of the Property, but I cannot accept such a broad analysis when the properties are so different.

32Finally, Sales 1, 2, 4, 5 and 6 are more than 20 kilometres from the Property. Without more evidence, I am not prepared to accept that the markets for these sales across four townships or municipalities are the same as the market for the Property.

33Sale 6 is the closest to qualify as a comparable property in support of MPAC’s proposed current value of $138,000. It has seasonal access, has no hydro and no plumbing. However, it is too far removed from the valuation day and is 24 kilometres away from the Property. The distance of 24 kilometres is a direct line from the Property to Sale 6. It is not the distance travelled between the two properties. Further, at 200 acres, Sale 6 has twice the land area and more structures on the property, which MPAC admits have utility. As described above, access to the Property via the Access Road is also inferior to the access to a municipal gravel road that Sale 6 enjoys. I do not have sufficient evidence before me to make such large adjustments to Sale 6 reliably. It is not comparable.

34MPAC must be able to prove how the proposed value was arrived at and why it is correct. Both of those elements are missing in this case. The minimum threshold in Patry Enterprises is not met, and so I find that MPAC has not met its burden.

Does the taxpayer’s evidence prove a current value?

35Following the framework in Patry Enterprises, if MPAC has not met its burden, I must analyze the taxpayer’s evidence to see if it is capable of proving that a particular current value is more likely than not.

36The Appellants did not submit any sales evidence in response to MPAC’s evidence. Rather, the Appellants submitted that the MPAC assessments of their neighbours’ properties show that the Property’s assessment is too high. Specifically, the Appellants stated that the property to the west of the Property at Lot 1 Concession 6 in Burns Township and the property two lots over to the east at Lot 33 Concession 6 in Richards Township are assessed at $94,500 and $135,000 respectively.

37The Appellants submitted that the Property is similar to the property at Lot 1 Concession 6 in Burns Township, assessed at $94,500, because it has a hunt camp, 150 acres of land and a large swamp. They further submitted that the property to the east at Lot 33 Concession 6 in Richards Township, assessed at $135,000, is superior to the Property because it has access to a public road, has no swamp on its 100 acres of land and has a two-storey building on it. The Appellants contend that these assessments show that a value between $94,500 and less than $135,000 is the correct current value of the Property.

38I must use sales data to determine current value, not assessments. Calculating a current value based on an assessment presupposes that the assessment is an accurate starting point. That may or may not be the case, but the point of an appeal is to determine the current value based on sales data. I therefore cannot accept the Appellants’ submission that the current value of the Property be determined based on assessments of neighbouring lands.

39The Appellants testified that they purchased the Property in June 2010 for $60,000. The Property at that time was 100 acres of vacant land with the Access Road being in bad condition. Mr. Godin further testified that the Appellants subsequently spent $50,000-$60,000 in materials to build the hunting camp described above from 2012 to 2013. According to Mr. Godin’s own evidence, the Appellants also built up the Access Road at a cost of approximately $9,000. I asked Mr. Godin about the labour costs to build the hunt camp, however he was not sure how much time it took. Mr. Godin advised that the Appellants did not pay for labour because they built the hunt camp on their own. I do not have enough evidence before me to determine the current value based on the costs of purchasing the land and of the improvements such as the hunt camp and the Access Road. I also do not have sufficient evidence regarding the effect that the market has had on the purchase price, if any, since the purchase of the vacant land in 2010 to the January 1, 2016 valuation day.

40I find that the Appellants have not provided sufficient evidence to prove that any particular current value is more likely than not.

41As indicated in Patry Enterprises, when neither party provides evidence that can support a current value, the Board should return the last uncontested assessed value to the assessment roll. The January 1, 2012 assessment was $102,000. I therefore reduce the January 1, 2016 assessment from $138,000 to $102,000 for the 2018 taxation year.

Equity

42In Zarichansky v Municipal Property Assessment Corporation, Region 2, 2018 CanLII 70341 (ON ARB) WR 150192, the Board held:

We find that an equity assessment is not necessary when MPAC has failed to discharge its burden. We have not made a current value determination, but have instead imposed a previous assessed value due to MPAC’s failure to discharge its burden. There is therefore no current value determined in clause 44(3)(a) to compare to the assessments of similar lands in the vicinity in clause 44(3)(b). Other land is assessed at its current value pursuant to subsection 19(1) while this property is not. It is likely that there will be an inequity that results from MPAC failing to discharge its burden, but the inequity is that the property is likely assessed lower than other property in the vicinity. That is not an inequity that clause 44(3)(b) can cure.

43For the same reasons, I similarly find that no equity assessment is required in this case.

CONCLUSION

44MPAC has failed to meet its burden to prove the correctness of the January 1, 2016 current value and there is insufficient evidence before me to determine that current value. I therefore reduce the January 1, 2016 assessment from $138,000 to the January 1, 2012 assessed value of $102,000 for the 2018 taxation year.

45An appeal of the 2019 taxation year has been deemed pursuant to subsection 40(26) but it cannot be disposed of by me. The 2019 assessment was returned at $77,000, with $50,900 in the managed forests class and $26,100 in the residential class. That is far different from the 2018 returned assessment and indicates that something on the property has changed for the 2019 taxation year. I cannot decide the 2019 taxation year appeal because I have not heard any evidence on how the property was on the state and condition day for that tax year. The parties are encouraged to settle the 2019 taxation year appeal in accordance with these reasons, if possible.