York Condominium Corporation No. 60 v. Municipal Property Assessment Corporation, Region 09, 2019 CanLII 39632

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

May 02, 2019

FILE NO.:

DM 2019M22

Moving Party(ies):

York Condominium Corporation No. 60

Respondent(s):

Municipal Property Assessment Corporation, Region 09

Respondent(s):

City of Toronto

Property Location(s):

370-380 Dixon Road

Municipality(ies):

City of Toronto

Roll Number(s):

1919-026-507-00150-0000

1919-026-507-00155-0000

Taxation Year(s):

2017

Hearing Event No.:

712380

Legislative Authority:

Section 40.1 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard:

April 17, 2019 by written submission

Parties

Counsel⁺/Representative

Submissions

York Condominium Corporation No. 60

Gareth Stackhouse*

Moving Party

MPAC

Justin Johnstone

Received

City of Toronto

Not Received

DISPOSITION OF THE BOARD DELIVERED BY JEAN-PAUL PILON

DISPOSITION OF MOTION

1York Condominium Corporation No. 60 (the “Corporation”) brings this motion for a determination that there are palpable errors in the 2017 assessment roll. It seeks an order extending time for bringing appeals for the same taxation year, and a direction that the Municipal Property Assessment Corporation (“MPAC”) be the appellant in the appeals the Corporation wants created pursuant to subsection 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

2In the reasons that follow, the Assessment Review Board (the “Board”) finds that the roll does, in fact, contain the palpable errors alleged. However, the circumstances giving rise to the palpable errors on the roll do not justify the Board exercising its discretion to create the appeals requested.

3The Corporation’s motion is therefore denied.

REASONS FOR DISPOSITION OF MOTION

4This motion concerns the Corporation’s common elements, occupied by a hair/beauty salon, a tuck shop and a nursery school, which primarily serve residents of the condominium’s residential units. From 1995, these areas had been exempt from taxation, but in 2016 MPAC re-assessed them for the 2014, 2015 and 2016 taxation years, classifying them as commercial.

5The Corporation appealed the reassessments in 2016, but acknowledges that “the 2017 appeal was missed due to an oversight and the Corporation believed this year would have been appealed as part of the ongoing appeals.”

6The Corporation and MPAC subsequently entered into Minutes of Settlement for the 2014, 2015, 2016 and 2018 taxation years. It was when these Minutes of Settlement were entered into that the Corporation discovered the missing appeals for 2017. The Corporation emphasizes in its motion material that the revised assessed values for the lands in question that were on consent were significantly lower than the original assessments: reduced by 63.8% for the nursery school and by 24.1% for the remaining commercial areas.

7MPAC originally consented to the late appeals in an email to the Corporation, but now it opposes the Corporation’s motion. No submission was received from the City of Toronto, and it is assumed it takes no position on the motion.

8The applicable statutory framework is set out in subsection 40.1(b) of the Act as follows:

40.1 If it appears that there are palpable errors in the assessment roll,

(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing the appeals and direct the assessment corporation to be the appellant.

9The legal test for palpable error is set out in a Board decision referred to by the Corporation, Municipal Property Assessment Corporation, Region 9 v. Chew, 2015 CanLII 78969 (ON ARB), and recently revisited in Municipal Property Assessment Corporation, Region 28, v. Callander (Municipality), 2018 CanLII 110104 (ON ARB). These say that when determining whether a palpable error exists on the roll, the Board should first ask whether “it is a true inadvertent and unintentional error,” and second, whether the error is palpable and “an error of conspicuous magnitude: plain, evident and easy to understand.”

10Even if that analysis leads to a determination that there is a palpable error, the Board’s power to correct palpable errors after that analysis remains discretionary, only to be exercised in the clearest of circumstances. This is because the power to reopen the roll to correct a palpable error is the only part of the Act not to have a limitation period. These cases hold that appeals are only to be created where it would be “unreasonable, unfair and highly prejudicial” to leave the assessment roll uncorrected.

Palpable Error

11The first question is whether there are palpable errors on the roll. This is determined by ascertaining whether the errors were inadvertent and unintentional, and then whether the errors are of conspicuous magnitude: plain, obvious and easy to understand.

12The Corporation says in its material that the missed appeal filings were an oversight and MPAC does not suggest any differently. This was clearly an inadvertent and unintentional error. The question of the magnitude of the alleged error, however, is disputed in the motion.

13The Corporation bases its argument on this question on the fact that the parties agreed to significantly lower assessments in their Minutes of Settlement for the other taxation years, leaving the 2017 taxation year with conspicuously higher assessed values. MPAC argues that the errors are “not plain and obvious on a cursory examination,” and that “if it were, the (Corporation) would have noticed the error when they received their 2017 (reassessment notices) in October of 2016 and filed the appropriate Request for Reconsideration or appeal to this Board.”

14Subsection 19(1) of the Act provides that “the assessment of land shall be based on its current value.” On reviewing the roll and knowing that there was no other explanation, it would be plain, obvious and easy for a reasonable person to understand that the significant anomaly in assessed values on the roll for the 2017 taxation year for the lands when compared to the assessments of surrounding years were erroneous.

15The Board therefore concludes the errors were inadvertent, unintentional, plain, obvious and easy to understand. They are palpable errors.

Discretion

16The Board then turns to the question of whether it should exercise its discretion to create the appeals, and specifically whether leaving the roll closed would be unreasonable, unfair and highly prejudicial.

17The Corporation says that leaving the assessments as is would be unreasonable and unfair because it, its unit owners or tenants would have to pay more than they ought to if new Minutes of Settlement were not entered into for the 2017 taxation year. The Corporation says there would be no prejudice to MPAC and that there would be little prejudice to the municipality, where the City of Toronto had not collected taxes for these properties prior to the reassessment for the 2014 taxation year. The Corporation argues it would be significantly more prejudiced than the municipality by having to pay more than it should.

18MPAC, on the other hand, argues that it would be unfair and unreasonable for the roll to be reopened because the Corporation “failed to police” their assessments and file within the statutory timeline, especially when represented by counsel. It argues that the consequences of not filing on time are foreseeable and that “the consequences are not so highly prejudicial, unreasonable and unfair as to engage the Board’s discretion.” MPAC further argues the prejudice to the municipality, which did not participate in the motion, would be higher because it would have assumed the roll to have been final in arranging its financial affairs.

19In its reply, the Corporation suggests that changes to the Board’s Rules of Practice and Procedure (the “Rules”), and slow updates to the Board’s website, were somehow to blame for its confusion in not filing its 2017 in a timely way. The Board finds this final point to be entirely implausible. This is not only because there is no evidence in the motion material to support it, but also because 2017 was a reassessment year to which the deeming provisions in subsection 40(26) of the Act do not apply in a statutory provision existing since 2008. It has nothing at all to do with the Rules.

20In its decisions, the Board has determined that “section 40.1 is an extraordinary remedy” (Municipal Property Assessment Corp. v. Conservation Authority Grand River, [2018] O.A.R.B.D. No. 2), “to be applied sparingly and only in the clearest of circumstances” (Scott v. Municipal Property Assessment Corp. Region No. 15, [2015] O.A.R.B.D. No. 64), “in order to maintain the integrity of the assessment roll” (Burnac Corp. v. Municipal Property Assessment Corp., Region No. 9, [2013] O.A.R.B.D. No. 169). In Bleau v Municipality Property Assessment Corporation, Region 1, 2019 CanLII 11625 (“Bleau”), the Board repeated what had been said in other cases, that appeals should only be created where there is a palpable error, where it would be “unreasonable, unfair, and highly prejudicial” not to do so.

21It would not be unreasonable, nor would it be unfair, to allow the roll to remain unopened in these circumstances because the Corporation neglected to file appeals for the 2017 taxation year. The notices of reassessment the Corporation received for 2017 would have been clear as to the deadline by which appeals would have had to have been filed. There was no change in the legislation that could have led to confusion about reassessment years, nor was there any evidence submitted that the Corporation, or its counsel, were confused about what needed to be done. It was simply overlooked.

22It would be prejudicial to the taxpayers for the roll to remain unopened, but palpable errors that result in higher taxes are always prejudical to taxpayers as the Board noted in Bleau. Although the municipality did not participate in the motion, the Board accepts MPAC’s submission that the municipality would suffer some prejudice if it were reopened, although to what extent is unknown. Had the municipality wanted to advance that point, it could have participated in this motion.

23More to the point, the prejudice to the Corporation and others who might have to pay for its error should not outweigh the fact that it would be unreasonable and unfair to reopen the roll when it was the Corporation that was entirely at fault for not filing appeals within the time allowed by the Act. Simple inadvertence cannot be enough to justify the exercise of discretion if such discretion is only to be exercised in a sparing way and only in extraordinary circumstances. It would render the time limit for filing an appeal meaningless and it would create a precedent that could be cited by anyone who had simply neglected to file their appeals within the statutory timelines. None of this could have been the legislature’s intent in enacting section 40.1 of the Act, and the Board has been clear in its decisions that this relief is to be granted only rarely and extraordinarily.

24As a result, the Corporation’s motion to reopen the roll for the 2017 taxation year is denied.

CONCLUSION

25Although the assessment roll contains palpable errors for the 2017 taxation year as to the Corporation’s assessments, the Board will not exercise its discretionary power pursuant to section 40.1 of the Act because it would be unreasonable, unfair and prejudicial to do so. York Condominium Corporation No. 60’s motion is therefore denied.