Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 12, 2020

FILE NO.: WR 162195

Assessed Person(s): TRANSPORT CANADA

Appellant(s): Alton Weedmark and Hazel Weedmark

Respondent(s): City of Ottawa

Property Location(s): 3084 Carp Road

Municipality(ies): City of Ottawa

Roll Number(s): 0614-423-810-09500-0000

Appeal Number(s): 3329424

Taxation Year(s): 2017

Hearing Event No.: 722587

Legislative Authority: Section 357(8) of the Municipal Act, 2001 S.O. 2001, c. 25

APPEARANCES:

Parties

Counsel

Alton Weedmark, Hazel Weedmark

Daniel Mayo

City of Ottawa

Lindsay Hinch

HEARD: September 04, 2019 in person

ADJUDICATOR: Pierre R. Lavigne, Member

DECISION

OVERVIEW

1This appeal for the 2017 tax year will decide whether a conveyance rendering a parcel of land incapable of being legally conveyed, because of the Planning Act, R.S.O. 1990, c. P.13 (“Planning Act”), is a “change event” pursuant to s. 357(1)(a) of the Municipal Act, 2001 S.O. 2001, c.25 (“Municipal Act”), or gives rise to a gross and manifest error pursuant to s. 357(1)(f) of the Municipal Act, permitting a cancellation, reduction or refund of municipal taxes.

2The Appellants appealed pursuant s. 357(8) of the Municipal Act, because their application to the municipal treasurer for the cancellation, reduction or refund of property taxes was denied. The matter did not further proceed to municipal council. In those circumstances an appeal lies to this Board by s. 357(8) (see Toth Equity Limited v. Ottawa (City), 2011 ONCA 372 at para. 30.

Issues

3At issue in this appeal are the following questions:

• Issue 1 - Was the 2016 conveyance a change event?
  • 1a - Was there a Planning Act prohibition?
  • 1b - Was the Planning Act prohibition a change event?
  • 1c - Was the 2016 assessment parcel description erroneous?
• Issue 2 - Was there an overcharge due to gross and manifest error?
• Issue 3 - Was the application for change event relief out of time?

Result

4For the reasons that follow this appeal for a cancellation, reduction or refund of 2017 taxes is dismissed.

FACTS

5The following facts appear from the evidence presented before the Board by the parties.

6The property related to this appeal is divided into three parcels all of which were purchased at different times. The key issue in this appeal pertains to the third purchase of land from the Crown (Parcel 3). When Parcel 3 was owned by the Crown it was tax exempt. The dispute is related to the taxation of Parcel 3 after the purchase.

7Details about the purchase of all three parcels are set out below.

Purchase of Parcel 1 – Alton Weedmark 1970

8On May 25, 1970 Alton Weedmark acquired Parcel 1 in sole ownership. Parcel 1 is on the east side of Carp Road, municipal address 3060 Carp Road (assessment roll # 0614-423-810-94000-0000). This parcel of 1.9 acres had previously been detached from a larger block of 7 acres, leaving a back lot of 5.1 acres, (assessment roll # 0614-423-810-9220-0000), (Parcel 2). Parcel 1 has 340 feet of frontage on the east side of Carp Road to a depth of 240 feet. Parcel 2 has 10 feet of frontage on Carp Road on the north side of Parcel 1. Its northern lot line extends 1,000 feet to the east parallel to the north boundary of Parcel 1, then 350 feet to the south, then approximately 760 feet to the west to the south east corner of Parcel 1. Together Parcels 1 and 2 form a rectangle on the east side of Carp Road, with Parcel 2 behind Parcel 1, save and except for the 10-foot-wide access along the north side of Parcel 1. All measurements are approximate.

9There is a house and a commercial automobile repair garage on Parcel 1. As there are two uses on Parcel 1 it is assessed with both commercial and residential classifications.

10The Weedmarks have lived in their home on Parcel 1 and operated an automotive repair business since 1972. Today they are retired. The automotive repair business is now run by their sons, with a grandson apprentice.

Purchase of Parcel 2 – Alton Weedmark 1981

11On July 17, 1981, Alton Weedmark acquired Parcel 2 in sole ownership. Alton Weedmark now owned the entire seven acre rectangle of land from which Parcel 1 had been detached. Parcel 2 is used for recreational purposes as the Weedmarks’ back yard and is separately assessed and classified as residential.

Transfer of Ownership of Parcel 1 & 2 to Weedmarks jointly November 7, 2016

12On November 7, 2016, Alton Weedmark transferred his sole ownership of Parcels 1 and 2 to himself and his wife, Hazel Weedmark, in joint ownership.

Parcel 3

13In 1968, the Federal Government needed to build a radar tower to control the approaches to Carp Airport, a small airport then west of Ottawa, now within the city limits.

14On September 23, 1968, the Crown in right of Canada, acquired property for this purpose immediately to the north of Parcel 2. This land will be referred to as Parcel 3 (assessment roll # 0614-423-810-09500-0000). Parcel 3 consists of a 50-foot-wide strip on the east side of Carp Road extending approximately 1,100 feet along and beyond the entire northern boundary of Parcel 2. At the end of Parcel 3, furthest from Carp Road, the lot widens to approximately 100 feet for the last 100 feet. The total area of this long parcel is approximately 1.37 acres.

15Parcels 2 and 3 share 1,000 feet of a common lot line and are thus abutting parcels.

16On the part of Parcel 3 that is 100 feet wide, approximately 1,000 feet from Carp Road, Transport Canada constructed a 512 square foot, one-storey generator building, and a 65-foot tower topped with a radar unit, covered in white material.

17The radar tower was in operation from approximately 1970 to 2000 when it was no longer required. The tower was dismantled, and the building shuttered. A 2007 environmental report described Parcel 3 as an “Unused one storey building, paved parking area, 5 cement piers which previously supported the base of former radar Tower. Access right of way 270 M long. Grasses, shrubs occasional trees.”

18Mrs. Weedmark, in her testimony, described the state of the building in 2017 as abandoned, derelict, decaying, with holes in the walls.

Purchase of Parcel 3 by Weedmarks jointly, September 27, 2016

19On January 1, 2016, Mr. Weedmark received a letter from Public Works Canada advising that Parcel 3 had been declared surplus and as the property was undevelopable unless adjoined to abutting lots, it was being offered for sale by tender to all adjoining land owners. The minimum bid was $5,000.

20The property was undevelopable because of its highly irregular shape and because the zoning by-law only permitted commercial uses which required a minimum lot width of 30 metres on Carp Road. The lot width of Parcel 3 was 15.24 meters (50.8 feet) wide.

21The Weedmarks submitted the only bid for $5,195 and on September 27, 2016, the Crown in right of Canada transferred Parcel 3 to Alton Weedmark and Hazel Weedmark as joint ownership for $5,195.

22Since their purchase of Parcel 3, the Weedmarks have used Parcel 3 exclusively for their own recreational purposes. They have cleared the brush, mowed the grass and used it to walk the dogs. They use it no differently than their back-yard acreage that is Parcel 2.

The Aftermath

23As Parcel 3 had been owned by the Crown it was exempt from taxation under s. 3(1) of the Assessment Act, R.S.O. 1990, c. A.31 (“Assessment Act”). The transfer of the parcel to the Weedmarks now made the land taxable.

24MPAC apparently sent the Weedmarks a Property Assessment Change Notice effective September 27, 2016 changing the tax code from non-taxable to taxable. There is no evidence as to when the Property Assessment Change Notice was sent to the Weedmarks. The Notice was not entered into evidence.

The Supplementary Tax Bill – June 23, 2017

25On June 23, 2017, the Weedmarks received a Supplementary tax bill for the 2017 taxation year for $3,769.00 for the Commercial Excess Land portion of Parcel 3 and $644.47 for the Commercial Land portion. These bills, totaling $4,413.47 for 2017 alone, were 85% of their purchase price of $5,198. These are the taxes that the Weedmarks seek to have cancelled or reduced.

26Evidence submitted by the City indicated the 2016 current value assessment of Parcel 3 for taxation in 2017 was $316,000, apportioned $27,300 in the CT-Commercial class for the part of Parcel 3 upon which the abandoned generator station and former radar tower stood, and $288,700 in the CU-Commercial Excess Land class for the portion of Parcel 3 that is the 50 by 1,000 foot former access road.

27On November 1, 2017, the Weedmarks filed their application for a cancellation, reduction or refund of taxes on Parcel 3 for the 2017 taxation year pursuant to s. 357 of the Municipal Act. The City’s form required the applicant to choose only one reason for the application. The box beside (a) “Changed Tax Class as a result of a change event as defined in the legislation” was selected.

28At the hearing, the City’s counsel conceded that more than one reason for the cancellation could be relied upon.

29The Weedmarks’ lawyer cited the following reason in the section of the application form requiring reasons:

…Their property no longer exists as a separate titled property but rather is legally merged with the next-door residential home of the Weedmarks… A 50-foot-wide lot is not even legal on Carp Rd so it could only be sold to an adjoining owner. The subject property is wrongly classed as “standard industrial” but is now residential and part of the Weedmarks home property of 3060 Carp Rd. Merger of title under the Planning Act has occurred because the Weedmarks own their house as joint tenants and the subject property was purchased from the federal government as joint tenants and the parcels are not on a plan of subdivision….

30On January 19, 2018, the City forwarded the Weedmarks’ application to MPAC for comment, citing as the reason a “classification change”.

31There is no indication that the Weedmarks’ detailed reasons were provided to MPAC. There appears to have been no awareness on the part of MPAC that the claimed change of use was a consequence of the merger of title and their assertion that the uses of merged Parcels 2 and 3 had to be considered as a whole.

32On March 7, 2018 Jared Williams of MPAC visited Parcel 3 for a site inspection. He observed no residential use on Parcel 3. On March 15, 2018 Mr. Williams reported to the City that Parcel 3 was not being used as residential, therefore no change of classification was required.

33On April 11, 2018, the City revenue office advised the Weedmarks’ that their application under s. 357 of the Municipal Act was refused as MPAC reported there had been no change to residential use on Parcel 3. It added, “Should you wish to continue to pursue the class change/consolidation contact MPAC”.

34The Appellant’s solicitor did pursue the issue of assessment roll consolidation with MPAC arising from the merger of title. On May 4, 2018, MPAC replied,

Upon review, we have found that roll # 0614-423-810-9220 (parcel in yellow) [Parcel 2] received a consent under the Planning Act. Since there was a previous consent a consolidation with roll # 0614-423-810-09500-0000 (parcel in red) [Parcel 3] cannot be completed.

Appellants’ Submissions

35The Appellants submit that, by the effect of the Planning Act, Parcel 3 became merged with Parcel 2 as both properties abut, are in the same ownership and neither is on a plan of subdivision. They claim the effect of this is that there is only one use for the merged parcels: residential. They submit that this is a “change event” under s. 357(1)(a) of the Municipal Act or in the alternative that they have been overcharged as a result of a gross and manifest error that is not a matter of judgement of the assessor, under s. 357(1)(f).

City`s Submissions

36The City takes the position that the municipality is not the body responsible for assessment, that the City must defer to MPAC’s assessment judgements. If MPAC finds that no change event within the meaning of s. 357(1)(a) has taken place, the City is in no position to question that.

37The City also submits that s. 357(1)(a) of the Municipal Act requires the “change event” to have occurred “during the taxation year” for which relief if sought. As relief is sought for 2017 taxes and the purported change event occurred in 2016 on the claimed merger of title, the application is not eligible under this subsection.

38The City also argues that the proper remedy would have been to appeal Parcel 3’s 2016 assessment for the 2017 taxation year before the statutory time limit.

39Lastly, the City submits that this is not the type of error that is eligible for relief under s. 357(1)(f) as a gross or manifest error that is clerical or factual in nature.

ANALYSIS

• Issue 1 – Was the conveyance a change event?
  • Issue 1a – Was there a Planning Act prohibition?

40The main thrust of the Appellants’ case is with respect to the issue of merger of title and its effects. They claim that abutting properties not on a plan of subdivision (Parcels 2 and 3), in the ownership of identical parties are, by effect of the Planning Act, not capable of being legally conveyed separately. They can only be conveyed as one property and are said to have become “merged in title”, unless a municipal consent to sever is obtained to convey them separately.

41The Planning Act, subject to certain exceptions, prohibits the sale of part of a lot or block without the consent of the municipal planning authorities. In the case of larger areas this consent is by way of approval of a plan of subdivision. In the case of smaller areas, the municipality grants a consent to sever part or parts of a lot. Once subdivision lots or severances have been registered, they may be sold without further municipal authorization.

42This subdivision control is enforced by s. 50(21) of the Planning Act which renders void any conveyance of non-exempt land without the required municipal approvals.

43The Appellants argue that the merger of title itself is a “change event” that terminated the commercial use of Parcel 3 and made Parcel 3 eligible for the residential use classification of Parcel 2. The merger thus operates a change of use which is a “change event” under s. 357(1)(a) giving rise to a refund of the amount of taxes charged at a higher rate for the classification.

44This is what the Appellants attempted to impress upon MPAC, so that Parcels 3 and 2 could be consolidated as one assessment parcel for purposes of Assessment and Classification.

45MPAC’s refusal to consolidate the assessment parcels was based upon the existence of an earlier severance for Parcel 2. No mention was made of an earlier severance for Parcel 3 and there was no evidence of such a severance in this appeal.

46The Board notes that s. 50(3)(c) of the Planning Act expressly exempts the Crown in right of Canada from the obligation to obtain a severance when it acquires or disposes of land. This may explain the absence of a severance for Parcel 3.

47MPAC believed that the prior severance for Parcel 2 was sufficient to prevent a merger of title. It’s interpretation of s. 50(12) of the Planning Act was that the severance for Parcel 2 was sufficient to make Parcel 3 legally conveyable thus preventing a merger of title.

48For the reasons set out below, the Board does not agree with MPAC’s interpretation.

49This is not the interpretation given to s.50 the Planning Act by the Ontario Court of Appeal in 1390957 Ontario Ltd. v. Acchione, 2002 CanLII 23579 (ON CA), (“Acchione”). In paragraph 21, the Court stated:

In my view, subs. (12) can apply only to conveyances of the consented part, being the "identical parcel of land". In the present case, the consented part is Parts 2 and 3, not Part 1, the land that is the subject of the agreement of purchase and sale between the parties to this appeal. I prefer the reasoning of Leitch J. in Royal Bank of Canada v. Barletta, [1993] O.J. No. 3013 (Gen. Div.), which held that a conveyance of the abutting parcel is not a conveyance of or other transaction involving the identical parcel of land.

50This effect of the Acchione interpretation was recently commented on in Craig v Leeds and Grenville (County), 2019 CanLII 32410 (ON LPAT) para. 77-8. At para. 78 the Tribunal states:

78Prior to 2002 it was often assumed that the “once a consent, always a consent” rule in s. 50(12), in conjunction with s. 50(6), also applied to the retained lands, as well as the severed lands following a consent, as a result of the presumed application of s. 50(12) and 50(6) of the Act. This mistaken assumption was bluntly corrected and brought to the attention of the Ontario Real Estate Bar, in the Acchione case when the Court of Appeal provided a rather more strict interpretation of s. 50(6) and 50(12) of the Act.

51Following the reasoning in Acchione, Parcel 3 could not be sold or conveyed so long as the Weedmarks retained joint ownership of Parcel 2. Whether this amounts to a merger of title under conveyancing law is not an issue the Board need decide. The important matter for assessment purposes is that the Board finds that Parcel 3 became impossible to legally convey and was in that legal state on the 2016 assessment roll return date.

52The Board notes that the impossibility to legally convey did not occur on the September 27, 2016 transfer by the Crown into the joint ownership of the Weedmarks, as at that date, Mr. Weedmark was still the sole owner of Parcel 2. At that time, the parcels had different owners. There was no common identity of ownership.

53The impossibility of legally conveying Parcel 3 occurred on November 7, 2016, when Mr. Weedmark transferred his sole ownership of Parcels 1 and 2 to himself and his wife, Hazel Weedmark, in joint ownership. At that time Parcels 1, 2 and 3 came into the same joint ownership. This satisfied the identity of ownership condition of the Planning Act prohibition.

• Issue 1b – Was the Planning Act prohibition a “change event”?

54The governing statutory scheme:

55Pursuant to s. 36(1) of the Assessment Act, MPAC is required to annually assess every assessable parcel of land in its state and condition on the roll return date, usually the second Tuesday of December in any given year. (See General Motors of Canada Limited v Municipal Property Assessment Corporation, Region No. 27, 2017 CanLII 3664 (ON ARB) para. 11-12).

56Pursuant to s. 14 of the Assessment Act, the assessment roll includes, among other items, the description of the assessment parcel, its owner, value, classification by use and its status as taxable or exempt from taxation.

57Pursuant to s. 41 of the Assessment Act once assessment appeals have been concluded, the revised assessment roll for that year shall be “…valid and bind all parties concerned, despite any defect or error committed in or with regard to the roll…”.

58The assessment roll, delivered at the end of a given year, is then used by the municipality to levy taxes the next year on the persons described in the assessment roll at the rate determined by the classification of the use.

59The assessment roll compiled in 2015, for taxation in the year 2016, valued Parcel 3 at $209,000 as of the legislated valuation date of January 1, 2012 (Assessment Act s. 19.2(1) para.3) and classified Parcel 3 as commercial. The commercial class is a default classification when the use does not fall into another defined class (O. Reg. 282/98, s. 5(1) para. 1).

60There was no appeal, by the then owner Transport Canada, of the 2015 assessment for the 2016 taxation year. The 2015 assessment roll became final and binding pursuant to s. 41 of the Assessment Act.

61S. 357(1)(a) of the Municipal Act permits cancellation, reduction or refund of taxes based on a “change in the use of all or part of the parcel of land”.

62The use of the words “parcel of land” in s. 34(2.2) of the Assessment Act, incorporated by reference in s. 357 of the Municipal Act, must be interpreted with reference to the use of the same words in other parts of the Assessment Act. Section 14(2) para. 2 of the Assessment Act requires that “…every parcel of land … in the separate occupation of any person shall be separately assessed…” (emphasis added).

63Accordingly, when s. 357(1)(a) refers to a “change in use” of all or part of the parcel of land, it is referring to the parcel of land entered on the assessment roll pursuant to the requirements of s.14(2). That “parcel of land” was Parcel 3 as assessed separately in the ownership of Transport Canada in December 2015.

64For there to have been a change in the use of Parcel 3 from commercial to residential use, there must have been a new residence on Parcel 3 or other new uses described in Assessment Act General Regulation O. Reg. 282/98 s. 3(1). The Appellants’ recreational use of Parcel 3, in either 2016 or 2017, does not constitute use of the parcel of land for residential purposes. This is because in the absence of consolidation of Parcels 2 and 3, the residential classification of Parcel 2 cannot be imputed to Parcel 3.

• Issue 1c – Was the 2016 assessment parcel description erroneous?

65At the end of December 2016, the assessment roll was delivered to the municipality. This is the roll upon which 2017 taxes were levied and which are the subject of this appeal.

66That 2016 roll’s assessment parcel description continued to identify Parcel 3 as a separate assessment parcel and valued it at $316,000 despite the impossibility of conveying that parcel of land due to the November 7, 2016 conveyance of Parcel 2 into the joint ownership of the Weedmarks.

67The assessment parcel description required by s. 14(1) para. 3 of the Assessment Act, should be of property that can legally be conveyed. (Canadian Tire Corporation Limited v Municipal Property Assessment Corporation, Region 15, 2017 CanLII 3661 (ON ARB)). All abutting land in the same ownership should be described as a single assessment parcel, unless such lands can be conveyed in parts without obtaining a further severance, or if it is described as a lot or block on a registered plan of subdivision.

68This is consistent with s. 19(1) of the Assessment Act which provides that “the Assessment of land shall be based on its current value”. “Current value” is defined in the Assessment Act as “in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer” (emphasis added). If an assessment parcel, in this case Parcel 3, cannot be legally conveyed, there is no property interest to sell. Such an assessment parcel can have no “current value”. A parcel description which does not permit assessment of value is inconsistent with the purpose of the Assessment Act.

69The assessment parcel description and valuation of Parcel 3 separate from Parcel 2 was therefor made in error.

• Issue 2 – Was there an overcharge due to gross and manifest error?

70The Appellants also advanced as a ground of appeal that they had been overcharged as a result of a gross or manifest error.

71Section 357(1)(f) of the Municipal Act provides as follows:

357(1) Upon application to the treasurer of a local municipality made in accordance with this section, the local municipality 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, …

(f) a person was overcharged due to a gross or manifest error that is clerical or factual in nature, including the transposition of figures, a typographical error or similar error but not an error in judgment in assessing the property;

72In CSH Pleasant Rest Inc. v Champlain (Township), 2017 CanLII 38308 (ON ARB), at paras. 10-11 the Board held that cancellation, reduction or refund of taxes under this section is only available for the class of errors that are inadvertent mistakes in the entry of data, such as when one meant to enter data A, but unintentionally entered data B.

73The error that occurred here in the description of the assessment parcel, when compiling the assessment roll in December 2016 for taxation in 2017, was an error in assessment judgement in the description of the assessment parcel. This is confirmed by the response of MPAC to the Weedmarks’ request for consolidation of Parcel 3 with Parcel 2, where it gave its rationale for refusing to consolidate. Accordingly, the error is not of the class that permits a cancellation, reduction or refund of 2017 taxes under s. 357(1)(f).

• Issue 3 – Was the application for “change event” relief out of time?

74Section 357(1)(a) only permits the cancellation, reduction or refund of taxes based on “changes events” that occur “within the taxation year” because there will be a new assessment and classification compiled at the end of every year. If that new assessment roll’s classification is in dispute, it may be appealed under s. 40 of the Assessment Act.

75The conveyance claimed to be the “change event” occurred within the 2016 taxation year. No application for a reduction of 2016 taxes was made. No “change event” is claimed to have occurred in the 2017 taxation year.

76As the Appellants were claiming a reduction for the 2017 taxation year tax, the year after the alleged “change event” occurred, no relief is available under s. 357(1)(a).

CONCLUSION

77The appeal to cancel, reduce or refund taxes on Parcel 3 for the 2017 taxation year is dismissed.