R. Y. v. City of Hamilton, 2019 CanLII 7200

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 01, 2019

FILE NO.: WR 157244

Assessed Person(s): R. Y

Applicant(s): R. Y.

Respondent(s): City of Hamilton

Property Location(s): Withheld

Municipality(ies): City of Hamilton

Roll Number(s): Withheld

Appeal Number(s): 3317256

Taxation Year(s): 2017

Hearing Event No. 707067

Legislative Authority: Section 357.(1)(d.1)of the Municipal Act, 2001, S.O. 2001, c. 25, as amended

Heard: November 2, 2018 in Stoney Creek, Ontario

APPEARANCES:

Parties	Representative
R. Y.	Self-represented, C. C.
City of Hamilton	I. Sampat

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1R. Y., (the “Applicant”) resides in the subject property with his common law spouse C.C. and their 11 year old daughter. The Applicant is the only registered owner on title to the subject property. The Applicant operates a business on the ground floor of the subject property and he and his family live on the second floor. The subject property is classified as Residential (“RT”) and Commercial (“CT”). In 2017, the property taxes on the subject property were paid in full. The Applicant is requesting a refund of the property taxes paid in 2017 on the basis of extreme poverty.

ISSUE

2The issue before the Assessment Review Board (the “Board”) is whether or not the Applicant’s 2017 property taxes should be cancelled, reduced or refunded as a result of the Applicant’s inability to pay due to sickness or extreme poverty under s. 357.(1)(d.1) of the Municipal Act, 2001 (the “Act”).

DECISION

3The Board determines that the Applicant was able to pay all the 2017 property taxes and was not in a situation of extreme poverty.

4The Board therefore dismisses the application for a refund of property taxes for the 2017 taxation year.

REASONS FOR DECISION

Legislation

5Section 357.(1)(d.1) of the Act provides:

Upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

6In order for the Applicant to qualify for relief, the Board must first determine if the Applicant had the ability to pay all or some of his property taxes. If the Applicant could pay his 2017 property taxes, he does not qualify for relief. If there is an inability to pay, the Board will determine if it was due to either sickness or extreme poverty.

Evidence and Analysis

7The Applicant lives in the subject property with C.C. She contributes to the household income and expenses and therefore her financial resources are relevant to this application. Consequently, the Board will review evidence from both the Applicant and C.C., in order to make a determination if the Applicant would not have been able to pay his 2017 property taxes.

Ability to Pay

Applicant’s Submission

8The Applicant testified that in 1994, he incorporated a computer business in Toronto and he continued this business in 2006, when he and his family moved to Hamilton. He also testified that C.C. handles all the accounting components of the business. He submits that it is a small scale business that deals mostly in computer repairs and a little retailing of selling used computer parts. He added that this business does not generate a lot of income and this explains his difficulty in paying his property taxes.

Source of Income

9The Applicant and C.C’s only source of income is from the business and Child Tax Benefit (“CTB”) received from the government. The total monthly household income for the 2017 taxation year was $2,614.30.

Expenses

10The Applicant presented a detailed spreadsheet of expenses, which revealed a total expense of $29,042.93 per annum in 2017. This provides a monthly expense of $2,420.24.The Applicant’s monthly net income is $194.06, only $15.18 short of his monthly tax payment of $209.24.

Assets

11The Applicant owns the subject property and a 2006 Pontiac vehicle. The Applicant testified that the vehicle was worth approximately $1,000 in 2017. The City provided the value of the subject property for the 2017 taxation year as $150,000.

12The Applicant and C.C’s. assets and liabilities are summarized in Table 1 below:

Table 1

Assets/Liabilities	Amount ($)
Assets
Home (Value from MPAC)	150,000
Car	1,000
Total Assets	151,000
Liabilities
Mortgage	4,147.03
Credit Cards (others)	24,739.69
MBNA Credit Card (1)	3,037.05
MBNA Credit Card (2)	7,865.45
BMO Credit Card	13.84
Total Liabilities	39,803.06
Net Asset (Total Assets Less Liabilities)	111,196.94

13The Applicant testified that he tried to obtain the equity in the subject property but was declined by the bank. He further added that he takes advantage of promotional interest rates on credit cards and uses the cash advance to pay off other credit cards. In conclusion, he submits that he is requesting a refund of $2,510.90, being the total property taxes levied on the subject property in 2017.

Extreme Poverty

14The Applicant testified that he made this Application on the basis of extreme poverty. The term “extreme poverty” is not defined under the Act. In order to make a finding of extreme poverty, the Board has to consider the evidence presented by both the Applicant and C.C., and the full spectrum of financial resources available to them, which is not limited to their income and expenses.

City’s Submissions

15Irwin Sampat, on behalf of the City of Hamilton (the “City”), submits that the City has no recommendation on this application. However, he made submissions regarding the Applicant’s evidence. Mr. Sampat submits that in 2017, the Applicant used credit cards to sustain his business. The Applicant was still able to pay his property taxes, despite the little deficit he had as his net income. Mr. Sampat further submits that there are some options that the Applicant could have explored in meeting his property tax obligation, such as:

a. renting out the third floor of his home;

b. renting out the store front space to generate extra income;

c. applying to obtain other financial resources and not live from credit.

16In response to Mr. Sampat’s submissions, the Applicant states that all the options provided by the City are not viable. The Applicant submits that the third floor of the subject property is a roof and it would cost approximately $20,000 to turn it into an apartment, which will be too small to rent. Furthermore, according to the Applicant, keeping the store front space is the most economical, making it into a residential apartment will not generate income and if he rents out the business space, he and C.C. would not have any income.

Board’s Analysis

17The intent of the legislation is to provide temporary relief for property owners who cannot pay their property taxes in full or in part due to sickness or extreme poverty in a given taxation year. In this application, the Board must decide if the Applicant is unable to pay all or part of his property taxes due to sickness or extreme poverty. Either of these two eligible criteria not only requires an analysis of the Applicant and C.C.’s income and expense, but also an examination of all financial resources available to them, which will be used to determine if the Applicant could mitigate his property tax obligation.

18The Board finds that the Applicant had the ability to pay all his 2017 property taxes and was not in a situation of extreme poverty.

19Mr. Sampat added a monthly property tax payment of $209.24 to the Applicant’s monthly expenses, which provided a deficit net income of ($-15.18). During cross- examination the Applicant admitted that in 2017, he had engaged in stock trading by using $9,000 from his credit card. The Applicant testified that he did not make any profit from this investment but further admitted that he lost approximately $700.00. The Applicant’s financial affairs reveal that he manages his financial situation using credit cards and he has used credit cards to maintain and sustain his business. Accordingly, the money lost in stock trading could have been used to pay his property taxes. In fact using less than $50.00 from the amount lost in stock trading could have placed the Applicant at a positive net income. Regardless, the Applicant was still able to pay his property taxes in full despite the deficit net income.

20The Board agrees with the City that the Applicant could have explored other options in obtaining additional finance to meet his property tax obligation. However, the Applicant has proved from his evidence that he did not need to take this step as he was able to pay all his 2017 property taxes, and still use his available financial resource in stock trading.

21As determined by the Board in M.M.U. v. Toronto (City), 2015 CanLII 46826 (ON ARB):

… to qualify for relief under this section of the Act the condition cannot be one where an individual simply cannot make ends meet but amounts to a situation where the Applicant after having called upon every resource available to him and having applied every reasonable means to mitigate and manage his expenditures is left with no means of being able to pay some or all of their property taxes. In the Board's view the Act envisages that an individual seeking relief on application under s. 323 of the Act should clearly demonstrate that for the year under appeal the Applicant, after scrupulously managing his/her resources and expenditures, was left with no resources available to meet his/her obligations to provide for the basic necessities of living and at the same time pay some or all of his/her property taxes.

22The Act envisages a situation whereby, after calling upon all financial resources available to the Applicant, the Applicant is still unable to pay all or part of the property taxes. Applications under this section of the Act are of last resort and Applicants must be in dire need to obtain relief. The Applicant was still able to pay all of his property taxes from the financial resources available to him and the evidence reveals that the Applicant was not in a situation of extreme poverty.

CONCLUSION

23The Board finds that the Applicant was able to pay all of his 2017 property taxes. The Board therefore dismisses his application for a refund of all or part of his 2017 property taxes.