V.K. and M.K. v. City of Toronto, 2019 CanLII 7201

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 31, 2019

FILE NO.:

WR 157544

Assessed Person(s):

V.K.

Appellant(s):

V.K. and M.K.

Respondent(s):

City of Toronto

Property Location(s):

Withheld

Municipality(ies):

City of Toronto

Roll Number(s):

Withheld

Appeal Number(s):

3319371

Taxation Year(s):

2017

Hearing Event No.:

706872

Legislative Authority:

Section 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c.11, Sched. A.

Heard:

November 23, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Representative/Counsel⁺

V.K.

Self-represented

City of Toronto

G. Thomson⁺ and L. Verastegui

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI

INTRODUCTION

1V.K. and M.K. (the “Applicants”) are a 49-year old and 25-year old mother and daughter, who live in the subject property, which is a condominium townhouse that has two bedrooms, one bathroom and a basement. It was purchased in 2012 for $299,000. The assessed value of the subject property in 2017 is $413,000. The Applicants paid their 2017 property taxes in full.

2The Applicants filed this application with the City of Toronto (the “City”) seeking a cancellation, reduction or refund of property taxes for the 2017 taxation year because they say that they were unable to pay the taxes due to sickness or extreme poverty, pursuant to s. 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c.11, Sched. A. (the “Act”).

Preliminary

3Based on the City Representative’s letter dated July 17, 2018, the Applicants were advised in detail regarding the documentary evidence on four separate occasions: April 30, 2018, June 7, 2018, July 11, 2018, and September 17, 2018, as instructed by the Board member in an adjourned hearing. The Applicants still appeared before the Board with insufficient documents. The Board conducted a full hearing based on the available documents.

ISSUE

4The issue before the Assessment Review Board (the “Board) is to determine whether the Applicants’ property taxes for the 2017 taxation year should be cancelled, reduced or refunded as a result of the Applicants’ inability to pay due to sickness or extreme poverty under the Act.

DECISION

5Based on the evidence before it, the Board determines that the Applicants’ 2017 property taxes should not be cancelled, reduced or refunded because they had the ability to pay the taxes, notwithstanding being sick. The Board therefore, dismisses this application.

REASONS FOR DECISION

Legislation

6Section 323.(1)(e) of the Act provides:

Upon application to the city treasurer made in accordance with this section, the City 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,

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

7The Act outlines a two-part test. In order for the Applicants to qualify for relief under this section of the Act, the Board must first determine whether the Applicants are able to pay their taxes. If the Applicants were able to pay the 2017 taxes, then the application fails. If the Applicants prove that they are unable to pay the taxes, the Board must then determine the reason the Applicants are unable to do so. Relief can only be granted if the Applicants are unable to pay because of either sickness or extreme poverty.

EVIDENCE AND ANALYSIS

Applicants’ Evidence and Position

Ability to Pay

8In determining whether the Applicants have the ability to pay their taxes, the Board has to consider the evidence presented by the Applicants regarding their financial situation, which is not limited to their income and expenses. The Applicants submitted that in 2017, they were living in extreme poverty and were unable to pay their property taxes.

9V.K. testified that she worked in customer service for a company selling credit cards but did not remember the name of her employer. She stated that she stopped working either in 2006 or 2008. She stated further that she started collecting Ontario Disability Support (“ODSP”) in 2006 or 2008.

10M.K. stated that in 2013, she took an undergraduate music course in a college by receiving financial aid from the Ontario Student Assistance Program (“OSAP”) and graduated in 2017. She stated further that she has never worked and started collecting ODSP in 2017.

Applicants’ Financial Evidence

11The Applicants filled out the first three pages of the Form 1- Financial Information by leaving out information regarding their assets and liabilities. M.K. provided a statement of her checking account and stated that she did not bring the statement of her savings account because most of her transactions occurred in her checking account. V.K. did not provide the Board with information regarding the loan she received and the second mortgage. Both Applicants stated that they did not have credit cards. The following total income and some of the expenses are according to the Applicants’ testimony in the absence of supporting documents.

Income Total

$2,400.00/month

Expenses

a. Mortgage

$ 397.53

b. Property Taxes

$ 200.92

c. Home Insurance

$ 50.00

d. Condominium fees

$ 323.00

e. Heat/Hydro

$ 115.00

f. Cell phones

$ 100.00

g. Groceries

$ 100.00

h. Household supplies (Vitamins)

$ 400.00

i. Transportation

$ 250.00

j. Second mortgage)

$ 195.30

k. Loan

$ 134.58

l. Bank charges

$ 11.00

Expenses Total

$ 2,278.00/month

Net Total

$ + 122.00/month

Assets

Assessed value of the house in 2017

$413,000.00

Cash

$ 36.46

Assets Total

$413,036.46

Liabilities

Mortgage

$180,966.60

Liabilities Total

$180,966.60

NET WORTH TOTAL

$+232,069.86

12Based on the information set out above, the net worth of the Applicants is $232,069.86.

Sickness

13V.K. testified that she has an immunity problem and anxiety. She is also diabetic and gets panic attacks. She submitted a letter dated September 19, 2018 from a doctor at Women’s Health in Women’s Hands, which states that the Applicant is unable to work due to illness without specifying her illness. M.K. submitted a letter from a doctor at St. Michael’s Hospital, dated October 3, 2017, which states that she has Relapsing Remitting Multiple Sclerosis. The Applicants submitted that they were unable to pay their property taxes because of sickness.

V.K.’s Final Remarks

14“The balance in our bank accounts demonstrate that we are living in extreme poverty.”

City’s Evidence and submissions

15Luis Verastegui, Representative for the City, stated that the assessed value of the subject property is $413,000 and its 2017 taxes are $2,332.23. He stated that the Applicants paid their 2017 and also 2018 property taxes in full. He stated further that the Applicants received a rebate of $33.17 from the City towards their 2017 property taxes. He submitted that the market value of the subject property based on the 2017 sales of three similar properties in the vicinity is $536,448.

16Graham Thomson, Counsel for the City, submits that the City is not taking any position with respect to the sickness part of this application. He stated that the Board has to dismiss this application based on the following observations:

• There are significant supporting documents missing in this application. Therefore, there is uncertainty regarding the expenses, liabilities and assets.

• V.K. testified that she applied for two mortgages. The balance in the original charge is $105,966. She registered the second mortgage but there are no documents to show as to what transactions occurred in this respect.

• V.K.’s Royal Bank of Canada (“RBC”)’s statement shows numerous transfers and deposits between her account to M.K.’s Tangerine account and also a third-party account for which, the Applicants did not offer any explanation.

• M.K. provided the Board with a copy of her Tangerine checking account statement. In this account, it shows that there are several transfers from her Tangerine savings account to her checking account. She did not submit a copy of her savings account; therefore, we do not know what actually transpired in her savings account.

• There is an indication that there are other sources of income with no documents.

• Based on the assessed value, there is equity in the subject property of $232,034. If we consider the market value of the house as $536,448, the equity will be $355,482.

• The Applicants testified that they donate money and buy books from Christian organizations. They buy meals from outside, purchase merchandise on line, use taxis, have internet, and two smart phones. These discretionary expenses are questionable.

• Even if we accept the figures submitted by the Applicants regarding their income and expenses as accurate, it is clear that the Applicants were able to pay their 2017 and even 2018 property taxes in full and also their monthly mortgage leaving them an income of $122.00 more than their expenses every month.

Board’s Analysis

17The intent of the legislation is to provide 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. If the Applicants prove an inability to pay the taxes, they must then prove the reason why they cannot, and only then can relief be granted.

18The Board finds that sickness exists in the case of Applicant M.K. In the case of the Applicant V.K., although her doctor did not specify the nature of her illness, based on her oral testimony and the fact that she is on ODSP, the Board accepts that sickness exists in the case of V.K. as well. The main question to be determined is if the Applicants had the ability to pay their 2017 taxes.

19The Board has considered the oral testimony of the Applicants, and has reviewed all of the evidence pertaining to their financial situation to determine whether the Applicants are able to pay their 2017 property taxes.

20The Board finds that the Applicants had the ability to pay their 2017 taxes.

21The Board agrees with the submissions of the City’s Counsel, and in addition makes the following observations.

22V.K. testified that her daughter M.K. pays her for her expenses. It was brought to V.K.’s attention that M.K.’s account shows that it is V.K. who, transfers money to M.K.’s account. V.K. stated that they share each other’s bank cards. In this respect, M.K. stated that she never paid her mother V.K. for her expenses.

23Furthermore, the Board notes numerous unidentified transactions in V.K.’s bank statements, such as third party deposits and e-transfers. V.K. was asked by Counsel whether she had an online business. V.K. stated that she did not but failed to explain the nature of those transactions. She stated that she did not remember, in response to most of the questions in this respect.

24Moreover, V.K. submitted two receipts for Neuropathic visits, for which she paid $42.00 for herself and $42.00 for M.K. by VISA through electronic transactions. V.K. stated that she paid these amounts to a neighbor who is a physiotherapist to give her and M.K. massage using her VISA debit card. It was brought to V.K.’s attention that these amounts do not appear as withdrawals in her account. V.K. was unable to offer an explanation in this regard. V.K. was asked by Counsel again whether she had more than one account, for which she stated that she did not.

25Based on the above, the Board finds the Applicants not to be credible witnesses regarding their income, mortgage, and bank transactions. Even if the Board accepts the Applicants’ evidence, it is clear that they had enough income to pay their expenses, including the property taxes.

CONCLUSION

26Based on the reasons stated above, the Board finds that the Applicants did not establish that they had an inability to pay their taxes. In fact, the evidence reveals that the Applicants were able to pay their 2017 property taxes.

27The Board therefore dismisses the Applicants’ application and determines that this application does not qualify for relief under the Act.