Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 16, 2019 FILE NO.: DM 162192 Moving Party(ies): City of Vaughan Respondent(s): Omers Realty Corporation Property Location(s): 101 Royal Group Crescent Municipality(ies): City of Vaughan Roll Number(s): 1928-000-321-25053-0000 Appeal Number(s): 2924363 and 2889479 Taxation Year(s): 2010 Hearing Event No.: 722778 Legislative Authority: Rule 24(e) of the Assessment Review Board Rules of Practice and Procedure Heard: September 17, 2019 by written submission

Parties	Representative	Submissions
City of Vaughan	Jaroslaw Wowk	Moving Party
Omers Realty Corporation	Altus Group Tax Consulting Paralegal Professional Corporation	Respondent

DISPOSITION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1The City of Vaughan (the “Moving Party”) seeks to dismiss the appeals filed by Omers Realty Corporation (the “Respondent”) for a vacancy rebate application and refund of taxes under sections 364(1) and 357(1)(d) of the Municipal Act, S.O. 2001, c. 25, as amended (“Municipal Act”) for the property located at 101 Royal Group Crescent (the “Subject Property”) for the 2010 taxation year. The City argues that these appeals should be dismissed due to the Respondent’s failure to comply with the Assessment Review Board’s (the “Board”) Rules of Practice and Procedure (the “Rules”) by not providing its Statement of Issues (“SOI”) on the date specified by the Board.

2The Respondent through its representative, Altus Group Tax Consulting Paralegal Professional Corporation (“Altus”) objects to this motion. The Respondent argues that the appeals are properly before the Board and the Moving Party and in addition, the Moving Party has failed to demonstrate any prejudice to justify the relief sought.

DISPOSITION OF MOTION

3For the reasons that follow, this motion is denied. The Moving Party has failed to provide evidence of any prejudice it would suffer to justify dismissing these appeals. The appeals shall proceed through the Summary of Events as prescribed by the Rules.

PRELIMINARY ISSUE

4The Respondent is opposed to Jaroslaw Wowk, an employee of the Moving Party, acting as both an advocate and a witness for the Moving Party, without the leave of the Board, contrary to Rule 14 of the Rules, which provides:

Advocate and Witness

14. A representative that is licenced with the Law Society of Ontario as a paralegal may appear at a hearing event as both an advocate and a witness:

(b) in a proceeding that is a general proceeding with leave of the Board.

5Mr. Wowk filed the Moving Party’s motion materials and is also the Moving Party’s affiant, as a witness, who presented a sworn affidavit. The Respondent submitted that Mr. Wowk has provided opinion evidence in the part of his affidavit titled “Prejudice to the City of Vaughan”. The Respondent argued that by advancing this position as an employee of the Moving Party, Mr. Wowk is acting as an advocate and his opinion is biased and cannot be advanced by a witness also acting as an advocate.

6The Respondent also submitted that the exhibits in Mr. Wowk’s affidavit titled “Tabs” were not sworn by a commissioner of oaths, therefore these exhibits in support of the affidavit are not properly before the Board and the motion should be discontinued.

7In the Moving Party’s Reply, the Moving Party requested for leave to permit Mr. Wowk to act as both an advocate and a witness on the basis that as an employee of the Moving party, he has personal knowledge of the facts in his affidavit, the statements in the affidavit are facts and not opinion evidence and the motion is based solely on factual evidence. In the alternative, the moving party suggested that if the Board finds that parts of Mr. Wowk’s affidavit contains opinion evidence, the Moving party will rely on the Affidavit of Maureen Zabiuk, to support the Moving Party’s submissions relating to prejudice in the motion.

8The Moving Party further resubmitted sworn exhibits attached to Mr. Wowk’s affidavit, which were initially filed as unsworn.

9Rule 14(b) of the Rules provides that a paralegal may act as an advocate and a witness only with the leave of the Board in a general proceeding like this appeal.

10It is incumbent on all parties appearing before the Board to be conversant with the Board’s Rules as non-compliance with the Rules “may” result in a dismissal.

11The request for leave to act as both an advocate and a witness should have been made prior to filing this motion and not in the Moving Party’s Reply. A Reply is not an opportunity to introduce new evidence through the affidavit of Ms. Zabiuk, but to address issues and arguments raised in the Respondent’s Response.

12The introduction of new evidence prevents the Respondent from making submissions in response, which is against the rules of natural justice and procedural fairness. In order to achieve an effective fair hearing, parties are to be given the opportunity to present their evidence and submissions and equally respond to the other party’s evidence and submissions. The affidavit of Ms. Zabiuk will not be accepted. Accepting this new evidence will be contrary to the principles of natural justice.

13The Respondent submitted that the Moving Party filed this motion on the basis that the Respondent has not complied with the Rules, while the Moving Party itself also failed to comply with the Rules, in presenting Mr. Wowk as an advocate and a witness without seeking the leave of the Board.

14The Board grants the Moving Party’s request for leave to permit Mr. Wowk to act as the Moving Party’s advocate and witness only for the purpose of this motion since the issue raised in this motion is not complex in nature and the evidence produced are factual. Although the Moving Party’s request should have been made appropriately prior to filing this motion, the Board finds that there is no apparent prejudice to the Respondent. The Respondent had received the Moving Party’s materials and had the opportunity to provide a response. Mr. Wowk would be able to represent the Moving Party in this motion objectively in both roles, as the evidence produced is basically factual. The duty of the Board is to weigh the evidence presented before it in providing a determination of the issue in this motion.

15Furthermore, pursuant to Rules 4 and 7 of the Rules, the Board accepts the sworn exhibits re-filed in Mr. Wowk’s affidavit, on the basis that the Moving Party made a technical error when it initially served and filed the exhibits as unsworn. This error was corrected without any prejudice to the Respondent. Rules 4 and 7 provide:

Interpretation

4. These Rules shall be liberally interpreted to ensure the just, most expeditious and least expensive determination of every proceeding.

Technical Objections

7. Substantial compliance with the requirements of these Rules is sufficient.

REASONS FOR DISPOSITION OF MOTION

Background

16The Subject Property is a standard steel frame industrial property. It also has outstanding appeals filed by Altus under Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Assessment Act”) for the 2009, 2010, 2011 and 2012 taxation years.

17The Respondent relies on the Affidavit of Claude Bumstead, who swears that the 2010 applications filed with the Moving Party which provides the relief sought including the supporting documents should “act” as the Respondent’s SOI. Therefore the Respondent did not fail to comply with the Rules and there is no prejudice to the Moving party to justify a dismissal of the appeals.

18On February 17 and 25, 2011, the Respondent filed tax applications with the Moving Party, under sections 357(1) (d) and 364(1) of the Municipal Act for the Subject property for the 2010 taxation year.

19The application filed on February 17, 2011, for refund of taxes, included a letter, which provided the basis of the application. The letter stated that effective April 1, 2010, a 29,593 square foot portion of the Subject Property was demolished; therefore, the Respondent is requesting that the 2010 taxes for the Subject Property be recalculated and any overpayment be refunded. The Respondent filed an appeal to the Board on October 13, 2011, under section 357(8) of the Municipal Act, as a result of the Moving Party’s delay in processing the application within the time limits. On September 10, 2012, the Moving Party responded by issuing a notice of determination for the application which was approved by the Council on September 25, 2012.

20The Respondent’s February 25, 2011 application with the Moving Party, claimed vacancy rebate for the entire 237,464 square foot of the Subject Property. On November 8, 2011, the Subject Property was inspected by the representatives of the Moving Party and the Respondent. As requested by the Moving Party, supporting documents were provided by the Respondent. On January 11, 2012, the Moving Party issued a notice denying the application for vacancy rebate. On April 9, 2012, the Respondent appealed the decision to the Board.

21In accordance to Rule 33, the Board assigned a commencement day of January 15, 2019 to these appeals including the Respondent’s section 40 appeals. In accordance to the Rules as set out in the Schedule of Events, the Moving Party delivered its initial disclosure to the Respondent on February 12, 2019 and the Respondent was to provide its SOI to the Moving Party by June 11, 2019. The Moving Party did not receive the Respondent’s SOI.

22On June 18, 2019, the Moving Party requested a copy of the Respondent’s SOI from Altus but did not receive a response.

23On July 12, 2019, the Moving Party filed a request to dismiss 14 appeals, filed by the Respondent which included the Respondent’s section 40 appeals, for its failure to serve a SOI.

24The Respondent provided the Moving Party with its SOI dated July 29, 2013, which Mr. Bumstead stated had previously been served on the Moving Party.

25Accordingly, on July 17, 2019, the Moving Party filed an amended request to dismiss; withdrawing the request to dismiss the section 40 appeals, since the Respondent had served its SOI. However, the Moving Party still retained its request to dismiss for the two Municipal Act appeals, for failure of the Respondent to provide its SOI, which are the subject of this motion.

26On July 17 and 22, 2019, the Moving Party received an e-mail from Mr. Bumstead stating that the Municipal Act appeals are under review and a final position will be provided shortly. On July 23, 2019, the Moving Party received another e-mail from Mr. Bumstead, who stated as follows: “…our vacancy application will stand as our pleading”.

27On August 1, 2019, the Moving Party further requested that the Respondent serve its SOI in accordance to Rule 39(4) of the Board’s Rules, by August 6, 2019. On August 2, 2019, Mr. Bumstead responded that all the information has been provided to the Moving Party and there is no format required by the Rules on the form a SOI.

Board’s Analysis

28The Board must first determine if the Respondent failed to comply with the Rules. If there was non-compliance with the Rules, the Board must then determine if this failure is enough to justify dismissing the Respondent’s Appeals.

Did the Respondent Fail to Comply with the Rules?

29Rule 24(e) of the Rules provides:

A Board Member may dismiss an appeal without holding a hearing event, or after a hearing event, if:

e. the appellant has not complied with statutory requirements or these Rules.

30Rule 38(4) further provides the contents of the SOI. It provides:

Statement of Issues and Responses

38. Statements of issues and responses must contain [emphasis added]:

(4) If the issue is the cancellation, reduction or refund of taxes pursuant to the Board’s authority under the Municipal Act, Municipal Act, 2001, City of Toronto Act, 2006, or Provincial Land Tax Act, 2006:

(a) the amount of taxes that have been paid or are owing;

(b) the proposed amount of the refund or reduction;

(c) a full statement of the grounds to support the cancellation, reduction or refund of taxes; and

(d) a list of all facts, legal grounds and documents that the party relies on in support of its position.

31The Respondent submitted that in 2013, it had provided a SOI to the Moving Party, which included a reference to the Municipal Act appeal. A review of this SOI attached as an exhibit in Mr. Bumstead’s affidavit reveals that it relates to the section 40 appeals and the Respondent referred to the demolition of a portion of the Subject Property, which will revise the current value assessment of the Subject Property. It appears that the Respondent’s argument is not that the served SOI should be the SOI for the Municipal Act appeals, but to prove that in addition to the applications and supporting documents provided to the Moving Party, the Moving Party had knowledge of the issues of the appeals in this motion and therefore suffers no prejudice.

32The Board finds that the issue in the SOI served is different from the issue in the Municipal Act appeals.

33The Respondent further submitted that it had complied with Rule 34. That for subsections (4) (a) and (b), the Moving Party, as the taxing authority has the firsthand information about the taxes that have been paid or is owing and the proposed amount of refund or reduction. Therefore, any inclusion of this or addressing it will be redundant. The Respondent also submitted that the amount of refund or reduction will be calculated by the Moving Party in connection with MPAC, and “the Respondent does not have the ability to indicate the current value assessment for the vacant space and as such cannot be held responsible for this proposed amount”.

34The Respondent further submitted that subsections (c) and (d) had been fulfilled, since it had provided the basis of the applications to the Moving Party, through its application, letter and document exchange.

35I find that the Respondent did not comply with Rule 34(4). Although the Board does not provide to parties a prescribed format for the form of the SOI, however, it provides parties with mandatory contents of the SOI. The Respondent makes reference to the Moving Party having firsthand knowledge of the amount of taxes that was paid or owing and the proposed amount of refund or reduction, the Board still makes it mandatory for this information to be included in the SOI. The Respondent filed the appeals with the Board, and it should comply with the Board’s Rules, especially when it has retained a representative to act on its behalf. All parties appearing before the Board must comply with the Rules, failing which they may risk a dismissal of their appeals.

36The Board held in Municipal Property Assessment Corporation, Region No. 9 v. 234900 Ontario Ltd., 2018 CanLII 248 (ON ARB), 2017 CanLII 74719 (ON ARB) at paragraph 8, that “dismissal is an extreme remedy and should only be granted in the clearest of cases”. The company had filed its SOI three months after the due date, after MPAC had filed the motion to dismiss. The Board also held that it was not an appropriate case for dismissal as there was delay by both parties under the former Rules and the Board order. The Board specifically noted that:

“Both parties here were in breach of the Board’s Rules or orders. It would be fundamentally unfair to only punish the Company for its breach, which is what a dismissal order amounts to. A dismissal order is an inappropriate response to mutual breaches of the Board’s Rules and orders”.

37The case of Municipal Property Assessment Corporation, Region 19 v. Wentworth Property Management Inc., 2018 CanLII 89428 (ON ARB), (“Wentworth”) although not referenced by the parties, is relevant to the issue in this motion. MPAC filed a motion seeking to dismiss the company’s appeals for non-compliance with the Rules by not providing its SOI. The Board held at paragraph 11 that:

A party’s failure to provide a statement of issues when required can be valid basis for dismissal, see 505896 Ontario Limited v Municipal Property Assessment Corporation, 2016 CanLII 2574 (ON ARB). The failure of the Company to provide a statement of issues by April 11, 2018 was a breach that is entirely attributable to the Company. The Company has not cured that breach. However, that is not enough to ground a dismissal… [emphasis added]

38In Municipal Property Assessment Corporation, Region 14 v Upper Keele Inc., 2018 CanLII 126632 (ON ARB), 2018 CanLII 248 (ON ARB) (“Upper Keele”), the Board held at paragraph 10 that, “The prejudice to each party will always be the primary consideration on a dismissal motion”. The Board considered the prejudice that each party will suffer from the dismissal. The Board concluded that the prejudice to the company will be severe, while the prejudice to MPAC of a late disclosure will be minimal, as a hearing date was yet to be provided by the Board.

39I find that the Respondent did not comply with the Rules by not providing its SOI on June 11, 2019, the specified date provided by the Board. The Respondent through Mr. Bumstead only communicated with the Moving Party on July 23, 2019, about its intentions of using the application and the documents filed with the Moving party as its pleading, which was 42 days after the specified time limit for filing its SOI. The Respondent delayed in communicating its intentions to the Moving Party, after Mr. Wowk had made several requests for this document.

40The Respondent also argues that the Moving Party failed to comply with the Rules, as addressed by this panel in the preliminary issue. The Moving Party also failed to comply with the Rules by making a request for Mr. Wowk to act as both an advocate and a witness in its Reply. However, as earlier determined by the Board, the request was only granted for the purpose of this motion since the issue is not of a complex nature and there is no apparent prejudice to the Respondent in granting this leave.

Is the Respondent’s Breach of the Rules Enough to Justify Dismissing its Appeals?

41In making this determination as decided in Upper Keele, the Board has to consider the prejudice to each party. The Moving Party submitted that it is prejudiced since it is unable to provide a Statement of Response. It submitted that there has been delay in the resolution of the appeals, which has a negative impact on the Moving Party due to an inability to manage its fiscal affairs as taxes generated from non-residential properties account for a significant portion of the Moving Party’s tax base. Furthermore, it also submitted that the Moving Party’s appeal management and allocation of limited resources is at risk due to this breach. That the deadlines in the Schedule of Events help the Moving Party in arranging its finances and establishing adequate reserves for potential tax refunds. The Moving Party argues that if the Board extends the deadline for the Respondent to file its SOI, this will be further prejudicial to the Moving Party since the predictability and stability of its operating and capital budgets will suffer. The Moving Party concludes that it is further prejudiced due to the expense it incurred in pursuing this motion and in meeting its other obligations, which cannot be compensated by costs.

42In the applications made by the Respondent, the Moving Party had reviewed the basis of the application, carried out an inspection of the Subject Property and was provided with disclosure upon its request. The Moving Party further made its determination on these applications. This suggests that the Moving Party understood the nature of the claim and the essence of the application. The Moving Party suggests that the delay in resolving the appeals is prejudicial to it. The delay is not attributable to either party, due to the complexity of the nature of the section 40 appeals being filed together with the Municipal Act appeals. In accordance to the Rules, the Board assigned a general commencement date of January 15, 2019 for all the Respondent’s appeals including the section 40 appeals.

43Although no formal SOI was provided by the Respondent, but the issues in these appeals are not new to the Moving Party, and thus eliminates the element of surprise to it. It appears that the Moving party’s grievance applies to the format of the Respondent’s SOI. The Moving Party has not provided evidence of the prejudice it will suffer to justify this dismissal. If any, the prejudice is minimal compared to the prejudice the Respondent will suffer. Therefore, as determined in Wentworth this breach by the Respondent, which is completely attributable to it and not cured by it, is not enough ground to dismiss these appeals as there is no evidence of prejudice to the Moving Party.

44I find that the Respondent’s failure to comply with the Rules is not enough to justify dismissing its appeals as the Moving party has not provided evidence of any prejudice or potential prejudice it will suffer.

CONCLUSION

45The Moving Party’s motion is denied and these appeals will proceed through its normal cause in the Schedule of Events as provided by the Rules.