449194 Ontario Limited v. Municipal Property Assessment Corporation, 2019 CanLII 59492

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 28, 2019

FILE NO.: DM 161142

Moving Party(ies): 449194 Ontario Limited; 806929 Ontario Inc.; Hama Investments Limited

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 03

Respondent(s): City of Ottawa

Property Location(s): 641 Bathgate Drive, 653 St. Laurent Boulevard. and 170 Lees Avenue

Municipality(ies): City of Ottawa

Roll Number(s): 0614-010-502-03300-0000, 0614-010-502-05300-0000 and 0614-031-601-33100-0000

Appeal Number(s): 3346637, 3289258,3217140 , 3346980, 3290880,3244762, 3345804, 3290624 and 3217187

Taxation Year(s): 2017, 2018 and 2019

Hearing Event No.: 715077

Legislative Authority: Section 53 of the Assessment Act, R.S.O. 1990, c. A. 31, as amended

Heard: June 7, 2019 by written submission

Parties	Counsel+/Representative	Submissions
449194 Ontario Limited; 806929 Ontario Inc.; Hama Investments	George Cameron-Caluori	Moving Party
MPAC	Mohammad El Dadi	Received
City of Ottawa	Lindsay Hinch	Received

DISPOSITION OF THE BOARD DELIVERED BY JEAN-PAUL PILON

DISPOSITION OF MOTION

Background

1Three disclosure motions for three different properties were filed by Altus Group Tax Consulting Paralegal Professional Corporation representing 449194 Ontario Limited, 806929 Ontario Inc., Hama Investments (the “Moving Parties”) for their client owners of the following properties: 641 Bathgate Drive (“Bathgate”), 653 St. Laurent Blvd. (“St. Laurent”) and 170 Lees Avenue (“Lees”). MPAC consents to some of the requests, and either conditionally or completely opposes the others. The City of Ottawa takes no position on the motions.

2The Moving Party filed appeals for the 2017 taxation year with the Assessment Review Board (the “Board”) pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) for each of the three properties. The Moving Party was deemed to have brought the same appeal in respect of the properties for the 2018 and 2019 taxation years pursuant to s. 40.(26) of the Act. There are a number of other outstanding appeals for the Lees property on the docket, but they relate to taxation years in a different cycle and were not substantively referred to in the motion material for that property.

3These appeals are all general proceedings pursuant to Rule 32 of the Board’s Rules of Practice and Procedure (the “Rules”), and the Moving Party filed these motions with the Board requesting disclosure of documents pursuant to Rule 45 and s. 53.(2) of the Act.

4Rule 45 provides that “all parties must provide a copy, in paper or electric form, all relevant documents in their possession, control or power to all other parties in the proceeding, except for privileged documents.”

5Subsections 53.(1) and (2) of the Act provide that:

53 (1) A person employed by the assessment corporation, a municipality or a school board is guilty of an offence and on conviction is liable to a fine of not more than $2,000, or to imprisonment for a term of not more than six months, or to both if,

(a) in the course of the person’s duties, he or she acquires or has access to information collected under this Act or to information collected pursuant to an assessment appeal or a proceeding in court involving an assessment matter;

(b) the information is,

(i) proprietary information of a commercial nature prescribed by the Minister relating to an individual property, or

(ii) actual income and expense information on an individual property; and

(c) the person wilfully discloses the information or permits it to be disclosed to any person who is not entitled in the course of their duties to acquire or have access to the information.

(2) This section does not prevent disclosure of that information,

(a) to the assessment corporation or any authorized employee of the corporation; or

(b) by any person being examined as a witness in an assessment appeal or in a proceeding in court involving an assessment matter.

6In a recent decision, Metro Ontario Inc. v Municipal Property Assessment Corporation, Region 13, 2019 CanLII 47974, the Board summarized the Board’s jurisprudence on the two central issues to be determined in its analysis of disclosure requests. The first is relevance, where “the party seeking a document must show how that document is relevant to an issue in dispute.” In Municipal Property Assessment Corp., Region No. 16 v. Champlain Properties Ltd., [2017] O.A.R.B.D. No. 84, the Board determined that the previous standard for the disclosure of documents had changed from those having a “semblance of relevance” to the more restrictive requirement of “relevance.”

7The second central issue to be determined is proportionality. Rule 5 provides that the Rules “shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding and with a view to resolving appeals within the four year cycle.” In 1141557 Ontario Ltd. v. Municipal Property Assessment Corporation, Region 30, 2019 CanLII 3426, the Board determined that documentary disclosure is only to be ordered if the disclosure is proportionate to the issues in dispute.

Bathgate Requests

8The Moving Party makes three requests in the motion material for documentary disclosure in the Bathgate property appeals. Its first two requests are common to all three motions considered in this decision.

9MPAC included a table in its Response to Statement of Issues that lists the capitalization (cap) rates for five properties which it claims are comparable. MPAC provided only the sale price for each of the comparable properties in that table.

10First the Moving Party requests a Statement of Net Operating Income (“NOI”) for each property MPAC considered in its analysis, including a statement documenting sales investigation results and a list of properties with sales representing reliable indicators of current value. The Moving Party says all of this is for the purpose of determining whether the NOI applied by MPAC is accurate the comparable properties.

11Second, it seeks a Statement of Capitalization Rate, including market income and sales information for each property and sales information, as well as a list of all sales that were considered in preparation of the capitalization rate study and capitalization rate analyses prepared subsequent to the January 1, 2017 roll return. The purpose of this request, according to the Moving Party, is to determine whether the capitalization rate as applied by MPAC is correct, and in particular to determine whether the median, average and applied rates are supported by the analysis of comparable properties.

12Third, the Moving Party seeks “Non-redacted Expense Allowance (sic), including analysis of actual income” for determining whether the information gathered regarding the property is correct.

13Many of MPAC’s points in response are the same in all three of the requests. MPAC says, for example, that it has provided broad disclosure through its website, that the test to be applied is relevance and no longer the semblance of relevance (as indicated above), that the Moving Party has the onus of proving relevance, that the Board needs to consider proportionality, that a party being ordered to provide disclosure is not normally required to create documents that do not exist and that documentary disclosure is limited by s. 53 of the Act. However, these general submissions are not particularly helpful as they do not address the specific arguments made by the Moving Party.

14With specific reference to the Moving Party’s first request, MPAC’s only objection is that the Moving Party did not provide notice to the third persons whose actual information is sought in the request. This is specifically refuted in the Moving Party’s reply, which says sufficient notice to those third persons was provided. A copy of this notice was included with the reply. Dated May 9, 2019, it advised those third persons that MPAC was relying on confidential information regarding property owned by those third persons, and that the Moving Party would like to obtain. It went on to indicate that if there were objections to that disclosure, that they should contact the Board Registrar at the telephone number or email address provided. In this request relating to the Bathgate property, as with the other two properties, St. Laurent and Lees, no submissions were received from these third persons.

15MPAC used the income approach for determining value for all three properties. For the Bathgate property, the Moving Party says that it cannot determine how MPAC arrived at a capitalization rate of 4.5%. As a result it says that it requires the net operating income as calculated by MPAC to ascertain its correctness.

16The information requested is essentially that used by MPAC to determine the NOI for the property. The documents exist, they are in MPAC’s possession and they meet the tests of relevance and proportionality. Moreover, affected third persons have been notified and have not opposed the request. This request is granted.

17On the second Bathgate request, MPAC says that the Moving Party “has failed to meet its onus in establishing that the documentation and information made within Request #2 is relevant” but it does not explain why. The Moving Party’s reason for the second request is the same as in the first, where the Moving Party says it needs the underlying information used by MPAC in its determination of the capitalization rate for the property to reconcile discrepancies in the Moving Party’s analysis. This request is also relevant and proportionate to the issues before the Board, and with no insight provided into MPAC’s specific objections to this request, the request should also be granted.

18On the third Bathgate request, MPAC indicates that it is not in possession of any non-redacted documentation regarding expenses. In its reply, the Moving Party did not dispute this assertion, and, therefore, the Moving Party’s third request is denied.

St. Laurent Requests

19The Moving Party makes four requests in its disclosure motion for the St. Laurent property.

20The first and second requests are exactly the same as the first two made for the Bathgate property. The third and fourth requests are for non-redacted Appendices B and C from MPAC’s Response to Statement of Issues. More specifically, the third request relates to redactions contained in MPAC’s calculation of income for the St. Laurent property, and the fourth, to redactions in MPAC’s valuation summary for the same property. In both cases, the Moving Party wants the information that was redacted by MPAC.

21MPAC specifically opposes the first two requests but not the third and fourth. It opposes the first request because notice was not provided to third persons, again specifically refuted in the Moving Party’s reply. MPAC takes the position that the documents referred to in the second request are not relevant, but again fails to explain why. As with the second disclosure request for the Bathgate property, the Moving Party says in its reply that knowing cap rates for comparable properties used by MPAC in its study is important to determine the correctness of the cap rate MPAC used for this property.

22The Board is satisfied as to the relevance and proportionality of the two disputed requests, and the third and fourth requests are on consent. The Board also accepts that affected third persons have been notified and have taken no issue with the requests. All four requests for the St. Laurent property are therefore granted.

Lees Requests

23There are two disclosure requests for the third property, Lees, which mirror the same requests for the other two properties on operating income and cap rates. In its response, MPAC indicates that it consents to the Moving Party’s third request but there are, in fact, only two requests. As with the St. Laurent property, MPAC says it opposes the first request, but only because it says third persons have not been notified when the Moving Party again says in its reply that they have. The second request is opposed by MPAC as “overly broad, not relevant and disproportionate”, again without providing any detailed submissions to support this assertion. These items of disclosure are both granted for the same reasons outlined earlier in this Decision.

Other Issues

24In its response to each of the three motions, MPAC also makes its own requests. However, as MPAC did not file a motion for disclosure, its requests are not properly before the Board and therefore, the Board does not address them.

25Neither party proposed any form of non-disclosure agreement in the event of the Moving Party’s success in the motion, even though MPAC indicates that such agreements will be necessary. The Board assumes that the parties can reach an agreement as to the form of such non- disclosure agreement, failing which, the parties may apply to the Board for further directions.

CONCLUSION

26All of the Moving Party’s requests are granted with the exception of the third request for the Bathgate property, subject to execution of non-disclosure agreements.