Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 22, 2019

FILE NO.: DM 160043

Moving Party(ies): Metro Ontario Inc.

Respondent(s): Thickson Square Inc.

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 13

Respondent(s): Town of Whitby

Property Location(s): 720 Taunton Road East

Municipality(ies): Town of Whitby

Roll Number(s): 1809-010-037-33100-0000

Appeal Number(s): 3238156, 3229872, 3300985, 3300533, 3356024, and 3355919

Taxation Year(s): 2017, 2018, and 2019

Hearing Event No.: 712913

Legislative Authority: Rule 47 of the Assessment Review Board Rules of Practice and Procedure

Heard: April 26, 2019 by written submission

Parties	Counsel⁺/Representative	Submissions
Metro Ontario Inc.	James Brook	Moving Party
Thickson Square Inc.	Mark Blidner⁺	Not Received
MPAC	Mattison Chinneck⁺	Received
Town of Whitby		Not Received

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH

1Metro Ontario Inc. (“Metro”) seeks an order compelling MPAC to provide it with information about a number of grocery stores near its grocery store at 720 Taunton Road East in the Town of Whitby. Rental information about the grocery stores was relied on by MPAC in its Statement of Response in order to calculate the assessment of Metro’s property. But MPAC refused to disclose that information.

2MPAC argues that it cannot disclose the information due to the prohibitions set out in section 53 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). It agrees that the documents sought about the properties are relevant, but says they should not be disclosed without adequate non-disclosure agreements in place. MPAC agrees with Metro on the form of those agreements. However, MPAC says that Metro’s request for information about properties that MPAC may rely on in the future is overly broad and should not be granted.

3Metro also seeks an extension of the schedule of events assigned to these appeals. It argues that an application pursuant to section 53 of the Act is an exceptional circumstance and that it is prejudiced by the delay brought on by the requirement for this motion. MPAC did not make submissions on the extension of time request.

4I find that a disclosure order is appropriate here, provided that some procedural steps are met. Within a week of these reasons being released, Metro is to provide a copy of this decision, and the form of non-disclosure statement from its motion materials, to the owners and tenants of each property. Metro must include notice that any objections to the disclosure of the material must be served on the parties to this motion, and filed with this Assessment Review Board (this “Board”), within 30 days of the release of these reasons. If no objections are received by the deadline, Metro will provide MPAC with an executed non-disclosure declaration in the forms attached to Metro’s motion materials as soon as possible. MPAC will then provide the documents described below within 15 days of receiving those non-disclosure declarations.

5I also find that an application pursuant to section 53 is an exception to the general processes before the Board and can be a valid basis to extend the time in the schedule of events, pursuant to Rule 82. Metro is prejudiced by the requirement to bring this motion and the parties have now missed the filing deadline for the report on their mandatory settlement meeting. I therefore extend the time for holding a settlement meeting and filing documents with the Board. The parties will hold a meeting amongst themselves to discuss settlement within 30 days of MPAC providing the disclosure to Metro and must file their documents, inclusive of expert reports, within 90 days of MPAC providing the disclosure.

Background

6Metro leases the property at 720 Taunton Road East in the Town of Whitby and operates a grocery store at that location. Thickson Square Inc. is the owner of the property, so is also a party to the appeals. Both Metro and the owner appealed the assessment of the property for the 2017 taxation year and were deemed to have appealed the assessments for the 2018 and 2019 taxation years, pursuant to subsection 40(26) of the Act, because the appeals have not yet been finally disposed of.

7The appeals were assigned a commencement date of December 15, 2017 and all of the procedural dates applicable to these appeals were calculated from that date. Metro served its Statement of Issues on the other parties on May 11, 2018, in accordance with the schedule of events. MPAC served a Statement of Response on the other parties on October 30, 2018, which was also in compliance with the schedule. MPAC’s response had redacted portions, including the rental rate of nine grocery stores that it argued were comparable, and a block of text on rental rates, leaving only its conclusion that fair market rent is $16 per square foot.

8Metro is the owner of one of MPAC’s suggested comparable stores, so has that rental information, but it had no way of knowing the other information MPAC was relying upon. In the following month it was informed that MPAC would not disclose the information without a Board order, and elected to proceed with this motion. It sent its motion materials to MPAC on January 7, 2019 had discussions with MPAC over the following months. It filed this motion with the Board on February 7, 2019.

Disclosure Sought

9Metro is seeking various information about eight of the nine grocery stores that MPAC relied on in its Statement of Response:

a. 1805 Pickering Parkway;

b. 1900 Dixie Road;

c. 650 Kingston Road;

d. 1300 Kingston Road;

e. Harwood Avenue North;

f. 1414 Kin Street East;

g. 1355 Pickering Parkway; and

h. 330 Taunton Road East.

10Metro seeks the rent information about those properties, including leases and other documents submitted to MPAC, tenant information program filings, and property income and expense program filings. Metro also seeks MPAC’s grocery story models and ratings for the eight properties above, as well as the property under appeal and 1822 Whites Road. Finally Metro would like the same information about any other properties MPAC intends to rely upon in the future. As noted above, MPAC only takes issue with Metro’s final request.

Law

11This Board has set out a framework for analyzing disclosure requests in a number of recent decisions. The party seeking a document must show how that document is relevant to an issue in dispute, Municipal Property Assessment Corporation, Region No. 16 v Champlain Properties Limited, 2017 CanLII 38345 (ON ARB), at paragraph 9. Documents are only to be disclosed if the disclosure is proportionate to the issues in dispute, see 1141557 Ontario Ltd. v Municipal Property Assessment Corporation, Region 30, 2019 CanLII 3426 (ON ARB).

12This motion also deals with section 53 of the Act. That provision creates an offence if an employee of MPAC willfully discloses information that “is proprietary information of a commercial nature prescribed by the Minister relating to an individual property, or actual income and expense information on an individual property.” Subsection 53(5) permits MPAC to disclose that information, subject “to any requirement of the Assessment Review Board concerning the disclosure of evidence.” This Board acts as an overseer of MPAC’s disclosure of sensitive taxpayer information to other taxpayers. The Board must balance the interests of the appellant in a fair hearing against the privacy interests of the taxpayers who will have their information disclosed.

13The proper procedure in a section 53 motion is to first look at the appropriateness of ordering the disclosure, considering the relevance of the documents sought and the proportionality of requiring their disclosure. Only if disclosure is appropriate should the Board then look at how to balance the interest of the parties impacted by the disclosure with the appellant’s interest in a fair hearing.

Disclosure

14The rental information sought is relevant to the issues in dispute. The appropriate fair market rent to apply to this property is one of the issues in dispute. It is also MPAC that introduced, and is relying on, these properties for fair market rent. That indicates that MPAC has the rental information readily available. It would not be onerous for MPAC to locate and share that information. I find that the documents requested in relation to the nine properties in MPAC’s Statement of Response should be disclosed.

15The area of dispute between the parties is if MPAC should be required to provide the same information for any properties it relies on in the future. I find that such an order is not required. MPAC has served its Statement of Response and this Board held, in NAV Canada v Municipal Property Assessment Corporation, Region 15 and 23, 2017 CanLII 70657 (ON ARB), at paragraph 13, that pleadings “should only be amended late in the process in special circumstances.” MPAC should not be raising new properties now that it has pleaded. The scope of the dispute has been set now that pleadings have been exchanged. It would be unfair for MPAC to introduce new properties for comparison at this point in the process. It is therefore unnecessary to provide a blanket disclosure order on future properties.

16I would add that a disclosure order for unknown properties will generally be denied as being overly broad. Without knowing the property about which information is sought, it is difficult to say that the request is relevant or proportionate. While there may be cases where information about unidentified properties would be appropriate, those applications should be avoided. Disclosure applications should be as specific as possible.

Confidential Information

17The rental information about these other stores is sensitive commercial information. Section 53 of the Act prohibits MPAC from disclosing such information without an order of this Board. In issuing such an order the Board must consider how to preserve trial fairness while protecting the interests of third parties.

18The usual practice for doing so is to provide the third parties with an opportunity to comment on the proposed disclosure and to have the parties receiving the documents undertake not to further disclose the materials. Here, the parties have agreed on the form of two non-disclosure statements, one for counsel and one for expert witnesses. I have reviewed the proposed form and agree that it provides adequate protection.

19What is missing in this application is proof that the impacted third parties were notified of this application. That should be a standard procedural step in an application such as this. The parties whose information is being disclosed have a clear interest in this motion. Their interests must be considered by the Board in making an order. They should have an opportunity to make submissions on the disclosure request and the form of disclosure proposed, including the form of any non-disclosure statements.

20It is essential that the third parties be provided an opportunity to make submissions on this proposed order. I therefore order Metro to provide a copy of these reasons, as well as the form of non-disclosure agreement, to the owners and tenants of the eight properties at issue. That notice should clearly state that any submissions on the proposed disclosure, and its form, must be served on the parties to this motion and filed with the Board within 30 days of the day these reasons are released. Metro will send out that notice within a week of the day these reasons are released.

21If any of the impacted parties make submissions on the disclosure, I must consider those before any protected documents are disclosed. Only if no submissions are received by the deadline should the parties proceed with the release of the information. If no submissions are received, Metro will provide the non-disclosure statements, in the form filed in this motion, to MPAC as soon as possible. MPAC will then provide the documents outlined above to Metro, within 15 days of the non-disclosure declarations being received. The parties are to advise the Board when the documents are provided to Metro.

Extension of Time

22The parties to these appeals were to hold a settlement meeting amongst themselves on or before April 5, 2019. Metro says that such a meeting would not have been useful without the rental details from MAPC’s proposed comparable stores. It argues that time should be extended because it filed this application in a timely way, section 53 applications are exceptional, and it would be prejudiced if time is not extended. MPAC did not make submission on the extension of time request.

23Rule 82 is explicit that once a commencement day has passed “the Board will not alter any timeline set out in the schedule of events, other than in exceptional circumstances.” This Board considered Rule 82 in Mississauga (City) v Michalakos, 2018 CanLII 126632 (ON ARB) (“Michalakos”). The Board held that a two-step process is required when considering an extension of time. First, the Board must be satisfied that exceptional circumstances exist. Then the Board must consider if the balance of prejudice favours granting an extension of time.

24In Michalakos, at paragraph 10, the Board described an exceptional circumstance as “something that does not occur regularly, something unusual, or something atypical.” Metro argues that the need for a section 53 application is unusual, and does not happen often. I agree with Metro that there are very few applications for information that is protected under section 53. Most appeals can be resolved or litigated without the need for confidential information. I find that a section 53 application is an exceptional circumstance.

25The prejudice to the parties is clear. There is no time specifically set aside in the schedule of events after the due date for Statement of Responses, which was November 2, 2018 here. The parties had 12 weeks in which to organize a settlement meeting, but Metro is correct that such a meeting would not be productive if the rental information could not be discussed. It took some time to organize and file this motion and it took the Board some time to schedule it. As a result, the parties are in breach of the Rules by not holding a meeting by the assigned date. That is prejudicial to all of the parties but is not the fault of any particular actor.

26I find that this section 53 application is an exceptional circumstance and that the balance of prejudice favours extending time. Given my finding on the need to notify third parties, an extension of time must be calculated relative to when Metro is provided with the rental information. I amend the schedule of events and require that the parties have a settlement meeting amongst themselves within 30 days of when MPAC provides the disclosure. They must file the mandatory meeting form by that date. If they do not request additional time for expert reports, their filing deadline will be 90 days after MPAC provides the disclosure. Given the relative nature of the filing deadline, the parties are required to notify the Board when the documents are provided to Metro.

CONCLUSION

27Metro’s disclosure request is granted, with the exception of its request relating to unknown, potential future properties. Within a week of the day these reasons are released, Metro is required to send a copy of these reasons, as well as the form of non-disclosure statements that were filed with this motion, to the tenants and owners of the eight properties set out in paragraph 9. It must also notify those parties that they have 30 days from the day these reasons are released to make any submissions on the proposed disclosure to the parties to this motion and the Board.

28If submissions are received, I must consider them. But if no submissions are received, Metro will provide the executed statements of non-disclosure to MPAC as soon as possible. MPAC will provide Metro with the documents with 15 days of receiving the non-disclosure statements. The parties must advise the Board when Metro is provided with those documents.

29The time for the mandatory settlement meeting, and the document filing deadline are extended as a result of this motion. The meeting must be held within 30 days of MPAC providing the documents to Metro and the parties must file the meeting form by that date. If no additional time is requested, the parties are to file their documents by 90 days after MPAC provides the disclosure.