Rodenbury Investments Limited v. Municipal Property Assessment Corporation Region 15, 2020 CanLII 104729

Tribunals Ontario / Tribunaux décisionnels Ontario

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: December 31, 2020 FILE NO.: DM 2020M25

Assessed Person(s): Rodenbury Investments Limited Appellant(s): Rodenbury Investments Limited Respondent(s): Municipal Property Assessment Corporation Region 15 Respondent(s): Town of Oakville

Property Location(s): 2189 Speers Road Municipality(ies): Town of Oakville Roll Number(s): 2401-020-280-14354-0000 Taxation Year(s): 2017 Hearing Event No.: 735672

Legislative Authority: Section 40.1 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Counsel*/Representative
Rodenbury Investments Limited	T. Jesse White*
Municipal Property Assessment Corporation	Matthew Kanter* and Marissa Cheddi
Town of Oakville	Leslie-Jane Hisey

REQUEST FOR: Late appeal HEARD: October 2, 2020 in writing ADJUDICATOR(S): Jean-Paul Pilon, Member

MOTION DECISION

OVERVIEW

1Rodenbury Investments Limited (the “Moving Party”) filed this motion pursuant to section 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) alleging that there is a palpable error in the assessment roll for the 2017 taxation year. As a result, the Moving Party requested an extension of time for bringing an appeal and a direction that the Municipal Property Assessment Corporation (“MPAC”) be the appellant.

2The Moving Party owns a building located at 2189 Speers Road in the Town of Oakville (the “Subject Property) which was classified as new construction large industrial (KT) and exempt for the 2017 taxation year, where the exempt portion was not an issue in this motion. The Moving Party alleged in this motion that since 2015, the Subject Property had, in fact, been used differently as a commercial warehouse, which is taxed at a lower mill rate, and that the incorrect classification of the Subject Property was a palpable error.

3MPAC opposed the motion and the Town of Oakville (the “Municipality”) took no position on the motion. The Municipality did, however, provide the Assessment Review Board (the “Board”) with background information relevant to the issues in this motion.

Result

4For the reasons that follow, this motion is dismissed.

Evidence

5The Moving Party relied on the affidavit of Nathan Marks, a Director for the Moving Party’s legal representative, affirmed on July 8, 2020. It said that “the Subject Property is a commercial warehouse” and went on to describe the Moving Party’s unsuccessful application for a cancellation, reduction or refund of taxes pursuant to section 358 of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Municipal Act”) filed with the Municipality.

6Mr. Marks indicated in his affidavit that MPAC produced a report following an inspection on June 21, 2018 as a result of the Moving Party’s Municipal Act application. The Municipality then denied the application in a decision exhibited to his affidavit.

7The Municipality’s decision simply recited section 358(1)(a) of the Municipal Act which said that such applications were for “gross or manifest error in the preparation of the assessment roll that is clerical or factual in nature, including the transposition of figures, a typographical error or similar errors, but not an error in judgment in assessing the property,” with the underlined part as its determination.

8The affidavit went on to say that Mr. Marks was granted a meeting at the Municipality’s offices where the Municipality’s decision was confirmed. He also indicated that it had been suggested to him “that the MPAC Report was intended for Municipal use,” which implied he did not receive it as it was not in evidence in this motion.

9The only other evidence before the Board in this motion was the affidavit of John Cole, a Property Valuation Analyst employed by MPAC, sworn remotely on September 14, 2020. It explained that the Subject Property had been returned (leaving out the uncontested exempt portion) as new construction large industrial (KT) for the 2017 and 2018 taxation years and new construction commercial (XT) for the 2019 taxation years, but that an appeal had been filed for the 2018 taxation year. It also said that the Moving Party had purchased the Subject Property on October 30, 2015.

10That affidavit also said that on October 18, 2016, MPAC issued a Property Assessment Notice that was delivered to the Moving Party indicating that, as of the valuation date of January 1, 2016, the current value assessment of the Subject Property was $31,458,000 and that it had been classified as new construction large industrial and exempt. It noted the deadline to file a request for reconsideration was February 15, 2017 and that the deadline to file an appeal was March 31, 2017. It said that neither had been filed and that had one of them been, that filing would “likely have triggered MPAC to conduct an inspection of the Subject Property” which “could have resulted in a revised classification of the 2017 taxation year, if appropriate.”

Legislation

11Section 40.1(b) of the Act provides that “if it appears that there are palpable errors in the assessment roll, …(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing appeals and direct the assessment corporation to be the appellant.”

Issues to be Determined

12There are generally two issues to be determined in motions filed pursuant to section 40.1(b) of the Act: whether it appears that there are palpable errors in the assessment roll and, if so, whether the Board should exercise its discretion to create late appeals. In this case however MPAC raised a further issue in its submission arising from the Board’s decision in Kinglip Holdings Inc. v. Municipal Property Assessment Corp., Region No. 9, 2015 CarswellOnt 1733 (“Kinglip”): “that alleged classification errors were errors in judgment, not plain and obvious, and therefore could not constitute ‘palpable’ errors.”

13As a result, the Board finds that the three issues to be determined in this motion are as follows:

a. Can errors of classification be palpable errors?;

b. Does it appear that there is a palpable error in the assessment roll relating to the Subject Property for the 2017 taxation year?; and

c. If so, should the Board exercise its discretion to create an appeal for the 2017 taxation year for the Subject Property?

ANALYSIS

Issue 1 – Can Classification Errors be Palpable Errors?

14MPAC’s argument that errors of classification cannot be palpable errors arose from the Board’s decision in Kinglip. Paragraph 29 of that decision described how MPAC’s counsel argued that “not all potential errors of classification are palpable errors on the assessment roll, and that if the relief sought in this motion is granted, then virtually all errors in classification would be palpable, rendering the term inutile.” Following that was the often-quoted statement in these motions that “section 40.1 is not intended to address errors in judgment that are properly the subject of s. 40 appeals.”

15The argument in this motion that errors of classification cannot be palpable errors does not take into account the factual context in Kinglip. In that case, the moving party alleging palpable errors of classification had already appealed the assessments and then withdrew them. It was only years later, when the tax consequences of that decision became clear, that the moving party then sought to create appeals and allege palpable errors, which was not the situation here.

16In fact, a plain reading of the Board’s decision suggests that the Board did not determine that classification errors could not be palpable errors. Paragraph 42 is the substantive concluding paragraph of the decision which says that “the Board finds that alleged error (sic) in the classification of the subject properties does not come within the ambit of s. 40.1 of the Act.” The paragraph concludes with the statement that “section 40.1 cannot now be relied upon to reopen the classification of the subject properties now that the outcome is not advantageous to the taxpayer.” Both of these statements referred to the “subject properties” which the Board finds does not imply the wider determination argued by MPAC.

17More important, however, is the wording of section 40.1 of the Act which clearly provides that errors of classification can be palpable errors.

Finding on Issue 1

18There is no merit to the argument that errors in classification cannot be palpable errors.

Issue 2 - Is there a palpable error in the assessment roll relating to the Subject Property for the 2017 taxation year?

No Evidence of a Palpable Error

19As noted above, section 40.1 of the Act provides appeals may be created “if it appears that there are palpable errors in the assessment roll…” The evidence to support such a request must therefore meet the threshold of that test by including proof that “it appears” that there may be an error in the roll.

20The evidence in this motion does not meet that threshold. This is because the totality of the evidence on the appearance of a palpable error is a statement in the Moving Party’s affidavit sworn on July 8, 2020 that “the Subject Property is a commercial warehouse.” This is evidence of the Subject Property’s use on the date that the affidavit was sworn. It is not evidence of what the use of the Subject Property was in 2017.

21There were additional arguments in the Moving Party’s material: “that the 2018 inspection (which MPAC undertook following the Moving Party’s Municipal Act application) is some evidence that upon inspecting the Subject Property the correct classification was apparent”; “that – if MPAC had inspected the property for the 2017 tax year and made any judgment – it would have corrected the class”; and that “it is more probable that the change in use (and therefore classification) occurred at the latest concurrent with the sale of the Subject Property to the Moving Party on October 30, 2015.”

22The first of these arguments made reference to MPAC’s report to the Municipality which the Municipality indicated was a “resource” in determining Municipal Act applications and “not valid for applicants (sic) review.” However, the Board sees no merit to the argument that it has any bearing in this motion, not only because the inspection was undertaken in 2018 and not 2017, but because the report was not in evidence in the motion. Similarly, there was no evidence to support the Moving Party’s second argument as to what MPAC would have found had it inspected the Subject Property in 2017. As to the third of these arguments, the Act does not pose a convoluted probability test, that it is more probable than not that it appears that there is a palpable error in the roll. The required proof is simply that which is stated in that the Act: that it appears that there is a palpable error in the roll, and the evidence filed is not it.

23Based on the evidence filed, there is no evidence to show that it appears that there is any palpable error in the roll. For these reasons alone, the motion would be dismissed.

Not a Palpable Error

24Nevertheless, had there been evidence before the Board of an appearance of an error in the roll, the Board finds this error would not have met the threshold of being a palpable error in the roll.

25The Moving Party correctly summarized some of the indicia of palpable errors in its argument where it cited Municipal Property Assessment Corporation Region 09 v. Chew, 2015 CanLII 78969 (ON ARB) (“Chew”). At para. 18 of that decision, the Board wrote that it must consider whether an error is truly inadvertent and unintentional, and that the “how and why the purported error comes about may be very relevant” in determining whether an error was inadvertent and unintentional. In addition, the Moving Party cited York Condominium Corporation No. 60 v. Municipal Property Assessment Corporation, Region 09, 2019 CanLII 39632 (ON ARB) (“York Condominium”) at para. 9, that a palpable error must be “an error of conspicuous magnitude: plain evident and easy to understand.”

26There was no evidence filed explaining why an appeal was not filed for the 2017 taxation year,¹ and the Moving Party would have had to have provided some explanation as to how the error was inadvertent or unintentional. An example is in Municipal Property Assessment Corporation v. 388210 Ontario Limited, 2020 CanLII 5708 (ON ARB) at para. 22 where the Board determined that notices of assessment did not come to a moving party’s attention because they were sent to an incorrect address. There was no such explanation here, therefore the Board would not have found that the error was inadvertent or unintentional.

27The Board would also not have found this error, if there was any error, to be plain, evident and easy to understand because there would have had to have been an inspection for it to have been determined. Had there been any evidence of a different use before the Board, then it might have been open to it to concur that the error was plain, evident and easy to understand.

28In only one respect in the tests cited by the Moving Party would the error have met the threshold of being a palpable error. This is in the conspicuous magnitude of the error, if the Moving Party’s argument was correct that the difference in taxes due would have been $96,000. However, the magnitude of any error is only one of many considerations in the determination of a palpable error, and alone it would not have been sufficient to prove that there was a palpable error in the roll.

29Consequently, the Board would not have found that this error, if there was any error, was a palpable error in the roll.

Findings on Issue 2

30There is no evidence that there may be a palpable error in the assessment roll. Even if there had been such evidence, the Moving Party did not satisfy the Board that the error would have been a palpable error.

Issue 3: If there is an error in the roll, should the Board exercise its discretion to create an appeal for the 2017 taxation year?

31Had the Board determined that there was a palpable error in the roll, the Board would then have had to consider whether it would have exercised its discretion to grant the relief requested by the Moving Party in the motion.

32The Moving Party argued that it would be unreasonable, unfair and highly prejudicial to leave the roll uncorrected, which is essentially the test the Board determined at para. 22 of Chew should be applied. The Moving Party’s argument was that an unfair tax burden would be placed on the Moving Party if the alleged error was not corrected, and that there would be no prejudice to the Municipality or MPAC if the request was granted.

33In Janovjak v. Municipal Property Assessment Corporation, Region 15, 2020 Canlii 24884 (ON ARB) at para. 20 and citing previous cases, the Board interpreted this test to mean that “when there are valid reasons for missing the statutory filing deadline in other provisions of the Act, s. 40.1 acts as a release valve to see that fairness is preserved.” As noted earlier, nowhere in the Moving Party’s material was there any explanation for the Moving Party’s failure to appeal its assessment for 2017.

34With this in mind, the Board finds that had there been any error, it would not have been unreasonable or unfair to let it stand where an appeal could have been filed but was not. In Scott v. Municipal Property Assessment Corp, Region No. 15, [2015] O.A.R.B.D. No. 64 at para. 38, the Board stated the obvious, that “once Notices of Assessment are delivered, it is the responsibility of the assessed person(s) or entities to raise issues in respect of those assessments.”

35Finally, the Board has also previously addressed the issue of prejudice in York Condominium at para. 23, which said:

…the prejudice to the Corporation…should not outweigh the fact that it would be unreasonable and unfair to reopen the roll when it was the Corporation that was entirely at fault for not filing appeals within the time allowed by the Act. Simple inadvertence cannot be enough to justify the exercise of discretion if such discretion is only to be exercised in a sparing way and only in extraordinary circumstances. It would render the time limit for filing an appeal meaningless and it would create a precedent that could be cited by anyone who had simply neglected to file their appeals within the statutory timelines. None of this could have been the legislature’s intent in enacting section 40.1 of the Act, and the Board has been clear in its decisions that this relief is to be granted only rarely and extraordinarily.

Findings on Issue 3

36The Board would not have exercised its discretion had there been a palpable error in the roll.

CONCLUSION

37The Board finds that there is no palpable error in the roll. The Board also finds that had there been a palpable error in the roll, the Board would not have exercised its discretion to create an appeal to correct it.

ORDER

38The Board orders that this motion is dismissed.

Footnotes

1. 1Although it is noted that the Municipality said in its submission that there had been an appeal for the 2016 taxation year which was settled in 2017 that did not address classification, and it is not mentioned elsewhere in the motion material.