1983992 Ontario Inc. v. Municipal Property Assessment Corporation, 2019 CanLII 77528

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 13, 2019

FILE NO.:

DM 2019M34

Moving Party:

1983992 Ontario Inc.

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 03

Respondent(s):

City of Ottawa

Property Location(s):

220 LeBreton Street

Municipality(ies):

City of Ottawa

Roll Number(s):

0614-063-301-31100-0000

Taxation Year(s):

2018 and 2019

Hearing Event No.:

717769

Legislative Authority:

Rule 26(b) of the Assessment Review Board Rules of Practice and Procedure

Heard:

July 02, 2019 by written submission

Parties

Counsel+ Representative

Submissions

1983992 Ontario Inc.

Dan Dunlap+ and Ian Morrice

Moving Party

MPAC

Ashtyn Rank

Received

City of Ottawa

Not Received

DISPOSITION OF THE BOARD DELIVERED BY JOANNE LAWS

DISPOSITION OF MOTION

Background

1Ian Morrice is the Secretary and Treasurer of 1983992 Ontario Inc. (the “Moving Party”) which is the registered owner of 220 LeBreton Street (“LeBreton”) in the City of Ottawa (“City”). He seeks leave of the Assessment Review Board (the “Board”) to file an appeal for the 2018 and 2019 taxation years because appeals were not filed prior to the deadline set out in the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

2For the reasons that follow, the motion is allowed.

REASONS FOR DISPOSTION OF MOTION

3There was a supplementary assessment related to LeBreton for the 2018 taxation year and a notice of assessment for the 2019 taxation year. In his affidavit, Mr. Morrice affirms that when outstanding taxes came to his attention, it was thought that they were the result of the prior owner defaulting on the terms of the purchase and sale agreement. A condition of the agreement was that the Vendor pay all outstanding property taxes and related fees and interest, the sum of which exceeded $120,000. He affirms that he did not receive the 2018 property assessment change notice (PACN) because it was mailed to the previous owner and that he never received the 2019 property assessment notice (PAN) due to Canada Post’s rotating strike. He argues that he acted diligently to investigate and resolve the issue of the outstanding taxes and once he discovered that they were due to a change in classification rather than arrears not paid, he filed a request for late appeals in a timely way.

4Mr. Morrice supports the motion with two affidavits, one affirmed on May 30, 2019 and the other affirmed on June 18, 2019 along with copies of the following relevant documents:

• The Land Registry Office Transfer Power of Sale document supporting the purchase of LeBreton received on August 13, 2018,

• A City of Ottawa Tax Certificate dated May 4, 2018, showing arrears and penalties for 2016 and 2017 of $120,930.01 and 2018 taxes and penalties of $1,839.37.

• On-line news articles regarding the 2018 Canada Post strike.

• A May 23, 2019 email between Moving Party’s lawyer and MPAC staff who is describing the Property Assessment Notice for the 2018 tax year.

• The Property Assessment Notice dated November 27, 2018.

• A City of Ottawa Tax Reminder Notice issued December 10, 2018, sent to the Moving Party, for arrears, interest and fees totalling $30,006.62.

• A February 28, 2019 email from the Ian Morrice to his lawyer discussing the December 10, 2018 Tax Reminder Notice.

• A February 14, 2019 Interim Tax Bill from the City of Ottawa which included the past arrears, interest and fees.

• A March 5, 2019 letter from his lawyer to the previous owner’s law firm seeking information about property tax arrears.

• March 12, 2019 emails from his lawyer explaining that the previous owner’s lawyer is having difficulty resolving the issue due to privacy laws.

5MPAC relied upon the written submissions and arguments of Ashtyn Rank. She argues that the Moving Party has not met the third requirement of Rule 26(b) and that pursuant to jurisprudence, in particular, Cherry Beach Sailing Clubs v. Municipal Property Assessment Corp., Region 9, [2018] O.A.R.B.D. No. 291 and Sabl Corp. v. Municipal Property Assessment Corp., Region 9, [2018] O.A.R.B.D. No. 94, the Board can only grant a late appeal if all three conditions of Rule 26(b) are met.

FACTS

6Mr. Morrice affirms that on August 12, 2018 1983992 Ontario Inc. purchased LeBreton which was a stalled construction site for a multi-residential building. The building remained vacant until January 2019. A condition of the purchase was that the Vendor pay all outstanding property taxes, fees and interest, the sum of which exceeded $120,000.

7On September 1, 2018, MPAC issued a PACN to the previous owner changing the classification from Residential to New Multi-Residential, retroactive to January 1, 2018. This PACN resulted in an increase to the property taxes.

8On November 27, 2018, MPAC issued a PAN to the Moving Party at 204 - 1339 Wellington Street West, Ottawa for the 2019 and 2020 taxation years. Mr. Morrice affirms that he did not receive this document. This PAN indicates that the classification was New Multi-Residential.

9On December 10, 2018, Mr. Morrice received a tax reminder notice from the City for outstanding taxes exceeding $30,000. Mr. Morrice and his lawyer assumed this sum was part of the outstanding taxes from the time of purchase and began investigating the matter through his lawyer, the Vendor’s lawyer and the City.

10On February 28, 2019, Mr. Morrice received a 2019 interim property tax bill from the City which included the unpaid sums from the December 10, 2018 reminder.

11On March 12, 2019, Mr. Morrice was advised that the Vendor’s lawyer was unable to resolve the issue through the City due to privacy laws. On March 14, 2019, Mr. Morrice attended a conference call with the City and the Vendor’s lawyer. It was at this point, Mr. Morrice states, that the City advised him that he should speak to MPAC.

12On March 26, 2019, MPAC advised the Moving Party’s lawyer that Mr. Morrice should file a Request for Reconsideration to resolve LeBreton’s incorrect classification. On April 2, 2019, Mr. Morrice filed his request to file a late appeal with the Board.

Late Appeal

13Rule 26(b) of the Board’s Rules of Practice and Procedure provides that the Board may accept an appeal if the Appellant satisfies the Board that “the appellant is a person entitled to receive a notice of assessment who did not receive notice and filed the appeal with the Board within 30 days of becoming aware of the assessment or classification that is the subject of the appeal.” The use of the word “and” indicates that all three elements of the Rule must be satisfied for a prospective Appellant to be successful.

Entitled to Notice

14The first requirement is that Mr. Morrice be a person entitled to receive a notice of assessment. It was not disputed that Mr. Morrice is the Secretary and Treasurer of 1983992 Ontario Inc. which owns LeBreton and that he is the person entitled to receive both the 2018 PACN and the 2019 PAN. I find that the first requirement is satisfied.

Did not Receive Notice

15The second requirement is that Mr. Morrice did not receive a notice of assessment. Regarding the 2018 PACN, both Mr. Morrice and MPAC agree that MPAC issued the PACN to the prior owner and MPAC does not dispute that Mr. Morrice did not receive it. Regarding the 2019 PAN, Mr. Morrice submits that he never received it and suggests the cause was the rotating Canada Post strike. Although MPAC mailed this notice to the Moving Party’s correct mailing address, it does not contest Mr. Morrice’s affirmation that it was not received. I find that the second requirement is satisfied.

Timely Application

16There is no dispute that the Moving Party did not receive the 2018 taxation year PACN. However, MPAC argues that Mr. Morrice became aware “of the assessment or classification that is subject of the appeal” on December 10, 2018 which is the date of the tax reminder notice. MPAC argues that 113 days had passed before the Moving Party’s April 2, 2019 correspondence with the Board which exceeds the 30 days provided for in Rule 26(b).

17Regarding the 2019 PAN, subsection 40(6) of the Act provides that the last day for filing an appeal is March 31, 2019. MPAC argues that Mr. Morrice became aware “of the assessment or classification that is the subject of the appeal” on February 14, 2019 which is the date of the City’s interim tax bill and, therefore, 47 days had passed before the Moving Party’s April 2, 2019 correspondence with the Board which also exceeds the 30 days provided for in Rule 26(b).

18Mr. Morrice explained why it took time to discover that an appeal to the Board was necessary. He believed that the outstanding taxes were related to the Vendor’s unpaid taxes and he pursued that path of enquiry. The reminder notice of December 10, 2018 does not specify why the taxes were outstanding, nor does it set out the classification. The February 14, 2019 tax bill confirmed that the outstanding taxes remained unpaid. However, it does set out the classification. Mr. Morrice and his lawyer continued their investigations until March 14, 2019 when the City advised them to contact MPAC. Even at this juncture, Mr. Morrice affirms he had trouble discovering the cause of the outstanding taxes because MPAC initially said they were prohibited from sending the PACN to him because he was not listed as the owner at the time that notice was issued.

19Based on the above, I find that the Moving Party became “aware of the assessment or classification” on February 14, 2019, the issue date of the Interim Tax bill, which identified the classification. Therefore, the deadline to file a late appeal of the 2018 PACN would be 30 days later or March 16, 2019. The deadline to file an appeal of the 2019 PAN would be the later of March 16, 2019 or March 31, 2019. The Moving Party filed its motion with the Board on April 2, 2019. Accordingly, I find that the Moving Party did not bring its motion within the time limit for either taxation year. However, for the reasons that follow, I find that this is an appropriate case to exercise my discretion under Rule 17 which provides: “Any time period set out in these Rules can be altered by the Board”.

20The Moving Party argues that Rule 17 is relevant here, referencing Block 9A Developments Ltd v Municipal Property Assessment Corporation Region 09, 2015 CanLII 37189 (ON ARB) at paragraph 13 and 347428 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 27, [2004] O.A.R.B.D. No. 113 at paragraph 19 which held that a good reason for extending time “should be determined by the principles of fairness, lack of prejudice to the other parties and the need for certainty in final decisions”. I accept that those are relevant considerations in applying the extension of time in Rule 17.

21The Moving Party also argues that it acted in a timely way to ascertain its tax status including contacting the Vendor’s lawyers, the City, MPAC and the Board. It referenced Solar Ship Inc. v Municipal Property Assessment Corporation, Region 20, 2019 CanLII 44275 (ON ARB), at paragraph 23, in which the Board held that the “most significant fact is that Solar Ship took no steps to address the supplementary tax bills for five months. It has not explained that delay at all. The Board should be reluctant to alter the timelines in the Rules for a party that does not explain the delay. While Solar Ship will be negatively impacted by the 30-day deadline staying in place, it had ample opportunity to consult counsel, or pursue other remedies”. In this instance, the Moving Party has explained the delay with sufficient details to justify that it acted in a timely way, given the circumstances.

22The Moving Party further argues that it would be unfair not to permit the appeal “given that the assessment imposed was clearly in error”. It argues that if the Board found that the first time the Moving Party became aware of the assessment or classification was via the February 14, 2019 tax bill, then the 30-day period would run out in mid-March and extending the filing date to April 2, 2019 would be nominal.

23The Moving Party argues that the only party who would be prejudiced by the time limitations for filing a late appeal is the Moving Party because the appeal has merit. I received no evidence or arguments that suggest an extension of time would be prejudicial to the Respondents. I find that depriving the Moving Party a short extension of time to file a late appeal in these circumstances would be prejudicial to the Moving Party.

24On the issue of finality, I find that the short extension of time sought by the Moving Party is not significant and I have received no submissions or evidence from the Respondents to suggest that finality of the assessment is an issue.

25Given the circumstances and jurisprudence, I find that an extension of time to the 30-day time period to the April 2, 2019 filing date is fair.

CONCLUSION

26The Moving Party did not receive the notices of assessment it was entitled to receive. It took timely steps to investigate the tax arrears and appeal the assessment and classification. Further, I am satisfied that 1983992 Ontario Inc. was not aware of the change of classification prior to the February 14, 2019 tax bill. That is the date that 1983992 Ontario Inc. became aware “of the assessment or classification that is subject of the appeal”. I further find that Mr. Morrice took reasonable steps in a reasonable time to determine a correct course of action. Based on the above, I grant the extension of time and allow the Motion.

27Leave to appeal for the 2018 and 2019 taxation years is granted. 1983992 Ontario Inc. can file its 2018 and 2019 taxation year appeals for 220 LeBreton Street, Ottawa.