Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 7, 2019

FILE NO.: DM 2019M04

Moving Party(ies): CHC Student Housing Oshawa Inc. and 1700 Simcoe Street (Ari) Ltd.

Respondent(s): City of Oshawa and DC Land Corp.

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 13

Property Location(s): 1670/1700 Simcoe Street North

Municipality(ies): City of Oshawa

Roll Number(s): 1813-070-003-09200-0000

Appeal Number(s): 2897272, 2897273, 2909950, 2953879, 3019115, 3042756, 3053884, 3053885, 3080337, 3080193, 3125573, 3125574, 3150130 and 3150131

Taxation Year(s): 2013, 2014, 2015 and 2016

Hearing Event No.: 709773

Legislative Authority: Rule 123 of the Assessment Review Board’s Rules of Practice and Procedure, as amended

Heard: January 2, 2019 by written submission

APPEARANCES:

Parties Counsel+/Representative

CHC Student Housing Oshawa Inc. and 1700 Simcoe Street (Ari) Ltd. Phillip Sanford+

DC Land Corp No one appeared

City of Oshawa Visha Sukdeo+

MPAC Karey Lunau+

DISPOSITION OF THE BOARD DELIVERED BY SCOTT McANSH

1Member Wyger of this Assessment Review Board (this “Board”) decided that the property at 1670/1700 Simcoe Street North in the City of Oshawa should be taxed in the multi-residential property class. The property had initially been placed in the residential property class. His decision in Oshawa (City) v Municipal Property Assessment Corporation Region 13, 2016 CanLII 65234 (ON ARB) applied to the 2011, 2012, 2013, 2014, 2015, and 2016 taxation years.

2CHC Student Housing Oshawa Inc. and 1700 Simcoe Street (Ari) Ltd. (the “Companies”) requested a review of that decision on the basis that no appeal had been filed for the 2013 taxation year. The Companies did not dispute the findings made by Member Wyger. They argued that, without an appeal being filed, the Board had no jurisdiction to decide the classification of the property for the 2013, 2014, 2015, or 2016 taxation years.

3In CHC Student Housing Oshawa 1, DC Land Corp. v Municipal Property Assessment Corporation, Region No.13, 2017 CanLII 70652 (ON ARB) Associate Chair Muldoon found that a motion was required on “whether a valid appeal exists for the classification of the subject property for the 2013 taxation year, and whether or not notice of the appeal was provided to the Requester.” This is the motion.

4For the reasons that follow, I find that there was no appeal filed for the 2013 taxation year and that the Board cannot cure a failure to appeal. Member Wyger’s decision is therefore varied by removing the appeals that were not properly filed: 2953879, 3019115, 3053884, 3080193, 3125573, and 3150130. Given that no appeal was filed, I do not need to consider the notice of appeal.

Law

5This motion turns on the importance of initiating proceedings. Member Wyger held, in Municipal Property Assessment Corp. Region No. 7 v. Havelock-Belmont-Methuen (Township), [2007] O.A.R.B.D. No. 608, at paragraph 7, that “the Board has no discretion or authority to exempt a party from compliance with the originating process mandated under the Act, under which the Board obtains its initial authority to deal with the matter.” That is, the Board cannot make decisions on issues unless someone has properly brought that matter before the Board.

6The other relevant legal provision is set out in clause 40(26)(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). That provision creates appeals, by operation of law, if certain conditions are met. The clause states, in relevant part, that:

an appellant shall be deemed to have brought the same appeal in respect of a property… in relation to the assessment… for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year…

7The Act defines “general reassessment” in subsection 1(1) as “the updating of assessments as a result of the application of a new valuation day under subsection 19.2 (1).” Subsection 19.2(1) sets the valuation days for each taxation year. Paragraph 2 of that subsection sets January 1, 2008 as the valuation day for the 2009 to 2012 taxation years. Paragraph 3 sets January 1, 2012 as the valuation day for the 2013 to 2016 taxation years.

Appeals at Issue

8Before addressing the party’s various arguments it is important to be clear on which appeals are at issue. Member Wyger’s decision states that it applies to 14 appeals:

a) 2897272 – appeal of the 2011 omitted assessment filed by the City;

b) 2897273 – appeal of the 2011 omitted assessment filed by the City;

c) 2909950 – appeal of the 2012 annual assessment filed by the City;

d) 2953879 – appeal of the 2013 annual assessment filed by the City;

e) 3019115 – appeal of the 2014 annual assessment filed by the City;

f) 3047256 – appeal of the 2014 annual assessment filed by the Companies;

g) 3053884 – appeal of the 2014 supplementary assessment filed by the City;

h) 3053885 – appeal of the 2014 supplementary assessment filed by the Companies;

i) 3080337 – appeal of the 2015 annual assessment filed by the Companies;

j) 3080193 – appeal of the 2015 annual assessment filed by the City;

k) 3125573 – appeal of the 2015 supplementary assessment filed by the City;

l) 3125574 – appeal of the 2015 supplementary assessment filed by the Companies;

m) 3150130 – appeal of the 2016 annual assessment filed by the City; and

n) 3150131 – appeal of the 2016 annual assessment filed by the Companies.

9The evidence before me is that the City filed appeals of the 2011 and 2012 taxation year on February 10, 2012. The 2011 assessment was an omitted assessment, issued pursuant to section 33 of the Act. Clause 40(26)(a) deems an annual assessment for the same year when an omitted assessment is appealed. Clause 40(26)(b) deems an appeal for the following year to which the same reassessment applies, which would be the 2012 taxation year.

10That is, the first three appeals in the list were legally initiated. There is no dispute on that point. Nor is there any dispute that the Companies’ appeals were properly filed.

11There is no evidence that the City filed any other appeals. There is no mechanism in the Act to create those appeals. Deeming only applies to taxation years that share the same valuation day. Thus, the appeals listed as (d), (e), (g), (j), (k), and (m) have no clear legal basis because there is no evidence that they were ever filed, and there is no clear operation of law that could create those appeals. Those are the appeals at issue in this motion.

ISSUES

12The Companies say that there is no evidence that the City of Oshawa, which brought the appeals of the property’s classification, filed or served notice of appeal for the 2013 taxation year. As a result, they say that the Board could not hear the appeals for that taxation year, or the subsequent three taxation year appeals that were deemed by operation of clause 40(26)(b). MPAC largely agrees with the Companies, but points out that the Companies filed appeals for the 2014, 2015, and 2016 taxation years, so that the only taxation year truly in issue is 2013.

13The City put forward three main theories on why the six appeals in dispute should stand:

1. Classification appeals should be deemed differently than valuation appeals;
2. Equity requires that the appeals stand; and
3. Striking the appeals would create a palpable error in the assessment roll.

I do not find any of those arguments persuasive.

Classification Appeals

14The City argues that the deeming of appeals of classification alone should be deemed for each year until they are resolved. The City points out that the classification day, set out in section 19.3, is an annual event, unlike the valuation day set out in subsection 19.2(1). They say this difference means that classification appeals should be deemed differently and not limited by four year the reassessment cycle.

15MPAC says that there is only one type of appeal under the Act, set out in subsection 40(1). That subsection sets out the five grounds on which an appeal can be made, including the current value and the classification of property. Subsection 44(1) states that the Board “may reopen the whole question of the assessment” when there is an appeal. MPAC argues that all appeals under Act are of the assessment, so the City’s argument that there should be a distinction between valuation and classification appeals must fail.

16The Companies submit that the difference in the valuation day and the classification day is irrelevant to the deeming question. They say that the deeming provision is clear that it only applies to taxation years that share the same valuation day. So the City’s 2012 appeal, with a January 1, 2008 valuation day, could not be used to deem a 2013 appeal, with a January 1, 2012 valuation day.

17I agree that there is only one type of appeal. The word “assessment” is not defined in the Act. The assessment of land is the main activity governed by the Act. Subsection 14(1) sets out the requirement that MPAC prepare an “assessment roll” for each municipality. The roll must contain a number of things, including the “value of the land liable to taxation” and the “classification of the land.” That is, the assessment is made up of a number of pieces of information, including the value of the land and its classification.

18The deeming provision in clause 40(26)(b) deems an appeal “… in relation to the assessment…” Deeming is of all of the issues tied up in an assessment, as set out in section 14. MPAC is also correct that once an appeal is filed, on any particular ground of appeal, the Board may address any aspect of the assessment, pursuant to subsection 44(1). While classification and value have different operative days, they are not treated any differently for the purposes of deeming. Clause 40(26)(b) explicitly limits deeming to “a subsequent taxation year to which the same general reassessment applies,” regardless of which issues are under appeal. The same general reassessment does not apply to the 2012 and 2013 taxation years. There can, therefore, be no deeming between those taxation years.

Equity

19The City advances a number of equitable arguments to support its disputed appeals. It says that the Companies cannot raise this “technical” objection after the Board has issued its decision. The City also argues that any defect in notice was cured by the other parties participating in the appeals. It submits that the equitable doctrine of laches should apply, prohibiting the Companies form raising these concerns. Finally, the City argues that a flexible interpretation of the Board’s Rules of Practice and Procedure (“Rules”) can cure its failure to appeal the 2013 taxation year.

20The City submitted Norjohn Transfer Systems Inc. v. Municipal Property Assessment Corp., Region No. 15, [2007] O.A.R.B.D. No. 464 for the proposition that laches could apply. But Member Mather (as she then was) found, at paragraph 24, that laches did not apply. This Board has previously rejected a laches argument, see Brockville (City) v Municipal Property Assessment Corporation, 2016 ONSC 5752 (“Brockville”) at paragraph 10. This Board has no general equitable jurisdiction. It is a creation of statute and can only exercise the powers conferred upon it by the Legislature. I have no power to apply equitable remedies to the City’s failure to appeal the 2013 assessment.

21The City also argues for the application of equity in the Companies’ acquiescence. That is, the Companies participation in the appeal process should bar them from raising concerns with the City’s lack of filing. This Board cannot apply equitable remedies, only the statutory powers it has been granted. The Act sets out the limited circumstances in which appeals are created by operation of law. I cannot simply create appeals because all of the parties appear.

22The City argues that the Board can cure their non-filing through the Rules. For instance, Rule 4 states that the “Rules shall be liberally interpreted to ensure the just, most expeditious and least expensive determination of every proceeding.” The Rules are somewhat flexible and broad, but I agree with Member Walker in Katz v. Municipal Property Assessment Corp., Region No. 9, [2014] O.A.R.B.D. No. 249, at paragraph 29, that “the Board cannot apply its Rules to trump the Act.” As Member Wyger noted, in Havelock, at paragraph 7: “the Board has no discretion or authority to exempt a party from compliance with the originating process mandated under the Act, under which the Board obtains its initial authority to deal with the matter.” This Board only has the power to address issues that a properly brought before it. The Rules cannot cure a failure to file an appeal.

Palpable Error

23The City says that, if the Companies’ request is granted, there will be a plain and obvious error in the assessment roll for the 2013 taxation year. Section 40.1 grants this Board a discretionary power to create appeals when “it appears that there are palpable errors in the assessment roll.” The City says that if the classification is left in the residential property class for the 2013 taxation year that is a palpable error in the assessment roll and I should create appeals to correct that error.

24The Companies submit that Member Wyger’s decision is complex and that the classification of the properties cannot be said to plain and obvious. MPAC argues that the error does not “jump out” at an observer as wrong, so cannot be a palpable error. MPAC goes on to say that, even if there is a palpable error, this is not an appropriate case in which to create appeals.

25A palpable error is “an error of conspicuous magnitude; plain, evident, obvious, and easy to understand,” Brockville at paragraph 14. The enquiry into a palpable error must first consider “whether it is a true inadvertent and unintentional error, and second whether that error is palpable,” Municipal Property Assessment Corporation v Chew, 2015 CanLII 78969 (ON ARB).

26The City does not explain why it did not appeal the 2013 assessment of the property. I cannot determine the nature of the error. It is likely that it was inadvertent, so satisfies the first requirement. However, I cannot see how the classification as residential is plain, or easy to understand. I agree with the Companies that Member Wyger’s decision is detailed and complex. The proper classification does not “jump out” as wrong. Member Wyger properly determined the correct classification to be in the multi-residential property class, but only after carefully considering a number of legal arguments. I do not find the residential classification to be a palpable error in the assessment roll.

27I also agree with the MPAC that, even if I had found this to be palpable error, this is not an appropriate case in which to create appeals. Appeals should only be created under section 40.1 if it would be “unreasonable, unfair, and highly prejudicial” to leave the assessment roll as it stands, Municipal Property Assessment Corporation v Guelph Eramosa Township, 2018 CanLII 263 (ON ARB) at paragraph 16. It is not unreasonable to leave the classification as returned when no party has appealed the assessment. It is not unfair to leave the roll as it stands either. The City had the ability to appeal the 2013 assessment and chose not to do so. It is fair that they bear the cost of that failure. The balance of prejudice also favours leaving the roll closed. Changing an assessment that was not appealed is highly prejudicial to the Companies. That prejudice outweighs any impact the City’s failure to appeal may have on their tax revenue. The factors all favour leaving the 2013 assessment in the residential property class.

CONCLUSION

28The City did not appeal the 2013 assessment of the property. Nor did anyone else appeal the assessment for 2013. The Board could not, therefore, have determined the classification for the 2013 taxation year. Rule 123(c) permits me to “vary… the decision.” That is the appropriate remedy here. Member Wyger’s decision is varied by removing appeals 2953879, 3019115, 3053884, 3080193, 3125573, and 3150130. The result is that the classification of the property for the 2013 taxation year remains in the residential property class.