Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

June 17, 2019

FILE NO.:

RD 2019M16

Assessed Person(s):

Axion Development Corporation Limited

Appellant(s):

Axion Development Corporation Limited

Respondent(s):

Municipal Property Assessment Corporation ,Region 05

Respondent(s):

City of Kingston

Property Location(s):

73 Rideau Street

Municipality:

City of Kingston

Roll Number(s):

1011-030-110-08600-0000

Appeal Number(s):

3260435 and 3292546

Taxation Year(s):

2017 and 2018

Hearing Event No.:

701176

Legislative Authority:

Rule 123 of the Assessment Review Board’s Rules of Practice and Procedure

Request for:

A review of the Board’s Amended Decision WR 155195A issued on November 20, 2018

Heard:

By written submission

Parties

Representative

Submissions

Axion Development Corporation

Lisa MacPhee George Cameron-Caluori and Paul Davis

Requester

MPAC

Ashtyn Rank

Received

City of Kingston

No one appeared

Not Received

DECISION OF THE BOARD DELIVERED BY ASSOCIATE CHAIR PAUL MULDOON

INTRODUCTION

1Axion Development Corporation Limited (the “Requester” or “Axion”) has filed a Request for Review with the Assessment Review Board (the “Board”) respecting Decision No. WR 155195A, which is an amended decision by Member Jennifer Griffith (the “Hearing Member”) that was issued on November 20, 2018 (Axion Development Corporation Limited v Municipal Property Assessment Corporation, Region 5, 2018 CanLII 113010) ( the “Amended Decision”).

2The Hearing Member’s Amended Decision relates to the property located at 73 Rideau Street, in the City of Kingston (the “Subject Property”) which is described as a residential property, with three self-contained units, which does not have a basement.

3The background to this Request for Review is as follows. The Hearing Member’s original decision was issued on September 20, 2018 (Axion Development Corporation Limited v Municipal Property Assessment Corporation, Region 5, 2018 CanLII 8942) (the “Original Decision”). In this decision, after reviewing the evidence, the Member, at para. 32, using the comparable sales valuation method, found that the best evidence to determine the correct current value of the Subject Property was sales data for four properties, three presented by MPAC and one by the Appellant, Axion. Using this data, the Hearing Member first calculated the sales price per square foot for each property. In doing this calculation, the Member used ‘Building Total Area’, which does not include “Basement Area”.

4The Member then calculated the average sales price per square foot for all four properties and applied this average sale price per square foot to the Total Building Area of the Subject Property to find that its correct current value was $349,000.

5Upon review of the Original Decision, MPAC found that the Hearing Member’s calculations in para. 32 were incorrect. Pursuant to Rule 114 of the Board’s Rules of Practice and Procedure (“Rules”), MPAC requested the Hearing Member correct the error in the calculation. The Hearing Member reviewed and granted the request. As the Amended Decision indicates, at para. 32, the average sale price per square foot was increased, which, in turn, increased the correct current value of the Subject Property to $406,000.

The Request for Review

6Axion asks that the Board vary the Hearing Member’s decision to retract the Amended Decision and re-instate the Original Decision.

7In overview, Axion relies on Rule 115, which provides that, where the requested correction is for a substantive change in the decision, or will cause prejudice to any party, the Board may deem the request to be a Request for Review under Rule 120. Axion asserts that the amendment made by the Hearing Member is a substantive change and will prejudice Axion. Axion, therefore, submits that the applicable ground for review is whether the Board made a significant error of law or fact such that the Board would likely have a different conclusion. In this case, this means that Axion argues that the Hearing Member should have deemed MPAC's request for the error correction to be a Request for Review. If so, Axion notes that MPAC's request was not filed within 30 days of the issuance of the decision, as is required in Rule 120, arguing, therefore, that there is no basis on which to change the Original Decision. Alternatively, if the Request for Review is to proceed, Axion argues that the Hearing Member made a significant error of law or fact in not accepting the Axion’s evidence respecting the correct current value of the Subject Property.

8The Board requested submissions by the parties to the Member’s Decision, which were received in writing.

9For the reasons that follow, the Board concludes that Axion’s Request for Review should be dismissed.

RELEVANT RULES

10The Board’s Rules of Practice and Procedure (the “Rules”):

Correcting Minor Errors

114. The Board may, on its own initiative or at the request of a party, correct a technical or typographical error, error in calculation or similar minor error made in a decision or order, and may clarify a misstatement, ambiguity or other similar problem.

Processing Request as a Review Request

115. If a party requests a correction or clarification that, in the Board’s opinion, is a request for a substantive change in the decision or order of the Board, or will cause prejudice to any party, the Board may deem that request to be a request for review pursuant to Rule 120.

Request for Review

120. A party may request a review of any final decision of the Board, other than a decision pursuant to Rule 122, by filing a request in writing no more than 30 days after the decision was issued, including:

(a) a copy of the decision to be reviewed;

(b) the written reasons for the decision, as set out in Rule 112;

(c) the reasons for the request, addressing the factors set out in Rule 121;

(d) notice of any appeals or applications for judicial review that have been filed in relation to the decision;

(e) proof of service on all other parties to the proceeding;

(f) the remedy or relief sought; and

(g) the fee specified by the Board.

Grounds for Review

121. A request for review will not be granted unless the Board is satisfied that:

(a) the Board acted outside its jurisdiction or violated the rules of natural justice or procedural fairness;

(b) the Board made a significant error of law or fact such that the Board would likely have reached a different decision;

(c) the Board heard false or misleading evidence from a party or witness, which was discovered only after the hearing and would have affected the result;

(d) there is new evidence that could not have reasonably been obtained earlier and would have affected the result; or

(e) any of the situations in Rule 122 exist.

Review Order

123. Upon consideration of a request for review, or on its own initiative, the Board may:

(a) dismiss the request;

(b) reinstate the appeal, with or without conditions; or

(c) after providing all parties an opportunity to make submissions,

i. confirm, vary, or cancel the decision,

ii. order a rehearing on all or part of the matter, or

iii.order a motion to decide the review.

DISCUSSION, ANALYIS AND FINDINGS

The Requester’s Submissions

11Axion argues that the original error was not one of a simple calculation because consideration of supporting party evidence was required and the amendment resulted in a value that contradicted a lower value that had already been accepted by the Hearing Member. Axion submits that this is an error of law.

12Axion emphasizes that, at para. 28 of both the Original and Amended Decision, the Board accepted Axion’s evidence that, MPAC, after inspecting the Subject Property, adjusted its assessment of current value to $342,000. Axion asserts that that if the Hearing Member had considered this, she would likely have altered her decision on this basis. Axion maintains that, although the difference in valuation may be nominal, the effect of the amendment has resulted in issues that require further consideration and deliberation. Axion submits that this further illustrates that the original error was not minor in nature.

13Axion notes that the Original Decision reduced the assessment from $354,000 to $294,000, and the Amended Decision revised this change, reducing the assessment from $354,000 to $343,000. Axion argues that this is a substantive change in the decision, because the amendment to the decision resulted in a significant increase in the assessment from the original value determined. Axion submits, therefore, that the amendment resulted in both a substantive and prejudicial change.

14Axion emphasizes that, under s. 40(17) of the Act, the burden of proof as to the correctness of the current value rests with MPAC. Axion submits that MPAC, in presenting its evidence failed in its statutory obligation to prove the correctness of the assessment. Axion maintains that MPAC's submissions proved that the Current Value was wrong. Axion, therefore, submits that the Hearing Member erred in relying on MPAC's evidence in the determination of the assessment.

15Axion points out that, in its evidence, it utilized the entire building area, inclusive of basement area, to determine a rate per square foot. Axion submits that, if the Board is to utilize all four comparables used in the decision and to rely on the evidence of the Appellant, the Hearing Member should have revised time adjusted sale price rate per square foot by taking into account the entire building area (inclusive of basement).

MPAC's Submissions

16MPAC notes that the average total building area of the four sales calculated by the Board, in para 32 of the Original Decision, does not include any basement area.

17MPAC submits that the error in calculation in the Original Decision is minor in nature, noting that it is only an error in the calculation of the average sale price per sq. ft. of four sales the Board relied on in its determination of current value. MPAC maintains that it is a straightforward, non-complex, mathematical calculation based on facts of the four sales in evidence: time-adjusted sale prices and total building areas (not including basement area). MPAC submits that the correction to the calculation error would not benefit from submissions from the parties.

18MPAC further argues that, pursuant to Rule 115, if the Hearing Member was of the opinion that MPAC's request required a substantive change to the Original Decision, the Hearing Member could have deemed the request to be a Request for Review pursuant to Rule 120. However, the Hearing Member did not do so. MPAC submits, therefore, that the Amended Decision is correct.

19MPAC submits that Axion is inappropriately attempting to re-argue the merits of the appeal simply because Axion disagrees with the result of the Amended Decision. MPAC notes that the Board has contemplated the meaning of the word “minor” in a previous version of Rule 114 in Kensington Foundation v. Municipal Property Assessment Corp., Region No. 9 2012 CarswellOnt 313, 73 O.M.B.R. 499 (“Kensington”), noting that, at page 9 of this decision, the Board stated “…the word “minor” refers to the nature of the error itself, and cannot have been intended to refer to its substantive implications.”, and, at page 10:

…it is not for the Board to calculate the financial implications to the parties in an effort to consider whether they constitute a substantive change. Substantive change refers to some change on the face of, or in the body of the decision itself that can be objectively characterized as more than just minor.

20Although the Board accepted the revised assessment of $342,000 for the Subject Property based on data issues discovered during an inspection, the Board ultimately determined current value based on market evidence from comparable sales.

Findings

21Regarding the Hearing Member’s finding that she accepted Axion’s evidence that MPAC revised its assessment of the Subject Property, the Board notes the Hearing Member, in making this finding, did not state that she accepted this value to be the correct current value. She only accepted that MPAC had revised its assessment. As noted in MPAC's submission, any party may advance a position at a hearing that the correct current value is different from any previous evaluation a party may have made regarding the assessed value of a property.

22The application of the Rules to the circumstances of this case are somewhat complex. Axion has brought a Request for Review of the Hearing Member’s determination, when making the amendment, that the amendment was not substantive or prejudicial to any of the parties under Rule 115. However, Axion also indicates that it was satisfied with the determination of the correct current value in the Original Decision. It was only when the amendment increased the correct current value, that Axion determined that it needed to seek to a review, under Rule 120, of the Hearing Member’s substantive findings made in the Original Decision. While there is some overlap in the submissions of the parties and the Board’s analysis respecting these two aspects of Axion’s Request for Review, the Board will begin with Axion’s arguments as they relate to Rule 115.

23It is not disputed that the Hearing Member adopted a consistent approach in her calculation. She calculated the sales price per square foot utilizing “Total Building Area” which excludes basement area. There is nothing in Axion’s submissions to support a conclusion that the Hearing Member, in amending the Original Decision, did anything other than correct an arithmetic error in the calculation of the average sales price per square foot. On this basis alone, there is nothing to indicate that the amendment constituted as substantive change.

24MPAC has submitted that the Hearing Member did not deem MPAC's request to be a Request for Review, and argues that this indicates the amendment is not substantive. The Board does not accept this argument because it does not address Axion’s argument that the Hearing Member should have found it to be substantive. However, the only ground advanced by Axion in support of the its argument the amendment is a substantive change, is that the amendment resulted in a revised current value that it is not consistent with the evidence submitted by Axion at the hearing. However, for purposes of Rule 115, the Board must consider only whether the nature of the amendment itself is substantive. In this case, there is no indication that the Hearing Member was required to review any of her substantive findings when making her amendment. The amendment was solely for the purpose of correcting an arithmetic miscalculation. Therefore, on this ground, the Board does not find that the amendment was substantive in nature.

25Regarding Axion’s submission that the amendment is substantive because the amended correct current value of the Subject Property has increased, the Board does not accept this submission, as the Board finds the analysis in Kensington is persuasive. A substantive amendment refers to some change on the face of, or in the body of the decision itself, not the financial implications that flow from the amendment.

26Regarding Axion’s submission that it is prejudiced by the amendment, the Board notes that Axion has not provided any clear statement of what this prejudice is, other than the obvious increase in its municipal tax assessment. However, under the Act, the Board is required to determine the correct current value, irrespective of the municipal tax implications that this determination will have for either the municipality or the assessed person. As such, the Board finds that Axion has not established that the amendment will cause prejudice.

27In summary, therefore, the Board finds that the Hearing Member did not make an error of fact or law in determining that the amendment to the Original Decision under Rule 114 is to correct an error in calculation, and that the amendment is neither substantive nor prejudicial to any of the parties.

28To the extent that the resulting increase in correct current value, has resulted in Axion requesting a review of the substantive findings made in the Original Decision pursuant to Rule 120, the Board similarly finds Axion has not provided sufficient reasons to satisfy the Board that any of the of grounds set out in Rule 121 have been established. The Board accepts MPAC's characterization that Axion’s submissions simply constitute a re-argument of the merits of the evidence adduced at the Hearing. The Member’s Original Decision clearly indicates that she considered all of the Appellant's evidence, but chose to apply her own approach when making her finding respecting the correct current value of the Subject Property. There clearly was ample evidence before her to do so. While Axion argued the issue that “Total Effective Area” should include basement area, clearly MPAC took the opposite view. The Hearing Member, as is often the case, was required to make a determination where there were conflicting expert opinions on the issue. She made this determination, and, as noted above, consistently applied it in her calculation to determine the correct current value.

29Based on the above findings and analysis, the Board finds that the Request for Review must be dismissed.

ORDER

30The Request for Review is dismissed.