Grossi v. Municipal Property Assessment Corporation Region 14, 2020 CanLII 30607

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

ISSUE DATE: April 24, 2020

FILE NO.: WR 163692

Assessed Person(s): Deborah Grossi

Appellant(s): Angelo Grossi

Respondent(s): Municipal Property Assessment Corporation Region 14

Respondent(s): Town of Richmond Hill

Property Location(s): 36 Pebblelane Court

Municipality(ies): Town of Richmond Hill

Roll Number(s): 1938-060-051-35382-0000

Appeal Number(s): 3380658 and 3403258

Taxation Year(s): 2019 and 2020

Hearing Event No. 728594

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
Angelo Grossi	Robert Baranowski
Municipal Property Assessment Corporation	Elva Yu
Town of Richmond Hill	No one appeared

HEARD: January 27, 2020 in person

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1Deborah Grossi, (the “Assessed Person”) is the owner of 36 Pebblelane Court (the “Subject Property”). Angelo Grossi (the “Appellant”), appeals the 2019 assessment of the Subject Property on the grounds that the assessment is too high. Pursuant to s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal in respect of the 2020 taxation year. Robert Baranowski, the Appellant’s representative, argues that the current value should be $2,963,556, with a further reduction to make it equitable with the assessment of other similar properties in the vicinity.

2The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $3,248,000 for the 2019 taxation year. Elva Yu, MPAC’s witness and advocate, requests that the Assessment Review Board (the “Board”) reduce the current value to $2,976,000 based on recent market sales for the 2019 taxation year.

Preliminary Matter

3At the commencement of the hearing, Mr. Baranowski made an oral motion requesting to make submissions on the question of whether MPAC has the legal right to “nullify” a Request for Reconsideration (“RfR”), which he argues Member Pilon did not address in his decision, Nicoletti v. Municipal Property Assessment Corp, [2020] O.A.R.B.D No. 16 (“Nicoletti”). Mr. Baranowski argued, if not, MPAC had no basis for nullifying the Appellant’s 2017 RfR, which prevented the Appellant from filing appeals of the 2017 and 2018 taxation years.

4MPAC requested an adjournment in order to prepare submissions for the motion as Ms. Yu argued that she is only a witness of fact. Mr. Baranowski submitted that Ms. Yu is representing MPAC as an advocate and as a witness and should be prepared to argue the motion. The Board dismissed MPAC’s request to adjourn the hearing. MPAC did not present any exceptional circumstance pursuant to Rules 82 and 84 of the Board’s Rules of Practice and Procedure (the “Rules”) to justify adjourning the hearing of the appeal. Furthermore, MPAC had adequate notice that this was one of the issues to be raised by the Appellant at this hearing, since he had filed the 2017 RfR as part of the disclosure.

5At the completion of the hearing, the Board reserved its decision.

ISSUES

6The issues to be determined are:

1. Does MPAC have a legal right to “nullify” an RfR?
2. What is the correct current value of the Subject Property for the 2019 taxation year?
3. Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?

Result

7The question of whether MPAC has a legal right to “nullify” an RfR is not an issue in this appeal based on the facts presented by the parties. MPAC did not nullify the Appellant’s 2017 RfR, rather, it was deficient and MPAC was unable to further review it and provide a notice of reconsideration, which the Appellant required to file an appeal to the Board.

8The Board determines the correct current value of the Subject Property for the 2019 taxation year to be $2,965,000.

9The Board finds that this assessment at current value is equitable with the assessments of similar lands in the vicinity, and therefore no further reduction is required to achieve equity.

10The Board reduces the assessment of the Subject Property from $3,248,000 to $2,965,000 for the 2019 taxation year.

Description of the Subject Property

11The Subject Property is a two-storey single-family detached residential dwelling, located in the Town of Richmond Hill. The structure was built in 2000 with a construction quality of 8.5. It has a lot with 90 feet of effective frontage and an effective site area of 0.39 acres. It’s total building area is 5,172 square feet (“sq. ft.”), with a basement area of 2,571 sq. ft. of which 2,000 sq. ft. is finished and it also has a swimming pool.

ANALYSIS

Issue No. 1 - Does MPAC have a Legal Right to “nullify” an RfR?

12Mr. Baranowski argues that MPAC’s action of nullifying the Appellant’s 2017 RfR, denied the Appellant’s right of appeal before the Board, which according to him violates the Canadian Charter of Rights and Freedoms for the taxpayer to be heard.

13Section 39.1(4) of the Act sets out the mandatory content of an RfR. It provides that it must “set out the basis for the person’s request and all relevant facts”. Section 39.1(5) of the Act provides that MPAC may request further information from the taxpayer. Mr. Baranowski admitted that MPAC has a right to request this information. However, he submits that he did not provide it since he had provided all the necessary details for MPAC to consider in the RfR form.

14Ms. Yu argued that the Appellant’s 2017 RfR did not meet the statutory requirements of s. 39.1(4) of the Act.

15I find that MPAC did not nullify the Appellant’s 2017 RfR. The RfR form was deficient. In line with s. 39.1(4) of the Act, section 2 of the RfR form requests that the taxpayer provide specific reasons as to why MPAC should review the assessment. The reasons provided on the RfR form are as follows:

Based on review of my client’s file and based on review of partial assessment information found on MPAC’s website, the following are the reasons for my request: 1) I do not agree with MPAC’s comparable properties used to value my client’s property, (2) assessment is too high, 3) the property is not equitably assessed. I filed with MPAC request under GRAD policy for release of assessment information. The Complainant reserves the right to amend the reasons given above, or add issues, after release of requested assessment information by MPAC under GRAD policy.

16MPAC’s letter to Mr. Baranowski dated March 28, 2017, requested further information in order to consider the RfR. MPAC advised Mr. Baranowski that the requested information should be provided within 30 days of the date of the letter. The letter further advised Mr. Baranowski that the consequences of not providing the information, will result in MPAC being “unable to consider” the request. The Subject Property is a residential property and is mandated by the Act to file an RfR and MPAC must make a decision before an appeal may be filed with the Board. MPAC advised Mr. Baranowski that failure to provide the requested information within 30 days may affect the ability to file an appeal with the Board.

17The Appellant’s failure in providing the requested information to MPAC, resulted in MPAC’s inability to further review the 2017 RfR and provide the Appellant with a notice of reconsideration which states the result of its reconsideration. In Nicoletti, Member Pilon determined at paragraph 25 that:

MPAC’s letter dated October 24, 2016 gave the Appellants 30 days to provide the requested information, failing which it would “be unable to consider” the RfR. In fact, what occurred when that information was not provided was that MPAC proceeded to close the file. The Board finds that this was a reasonable position for MPAC to have taken as the Appellants’ 2017 RfR did not meet the statutory requirements for the RfR to be considered.

18The Act is silent on the consequences of not providing the information requested under s. 39.1(4) of the Act. As stated in page 87 of E.A. Driedger’s book, Construction of Statutes, 2nd ed. (Toronto: Butterworth’s 1983), which is a recognized authority on statutory interpretation:

…Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

19The purpose of the RfR process enacted by the Legislature for specific properties is to explore the possibility of resolution before an appeal is filed with the Board. The intention of the Legislature can be inferred from the words of the Act: that taxpayers should co-operate with the assessment corporation, MPAC. Section 39.1(4) makes it mandatory for the taxpayer to provide MPAC with “the basis of the person’s request AND all relevant facts” (emphasis added). This is not optional for the taxpayer. The requested information by MPAC was reasonable. It was not onerous; it was necessary for MPAC to complete its review of the RfR. On the balance of probabilities, I find that the information provided by the Appellant in the RfR form does not satisfy this section of the Act. Consequently, this RfR process was incomplete and deficient.

20Mr. Baranowski argues that MPAC’s action violated the taxpayer’s right to be heard. I find that it is the Appellant’s action of not providing the requested information that led to the incomplete review of the request and subsequently affected the right to appeal to the Board.

21Section 40(3.1) of the Act outlines certain preconditions of appeal, it provides:

For 2017 and subsequent taxation years, if a person has made a request for reconsideration in respect of a property under section 39.1 within the time required under section 39.1, whether or not the person is required to do so as a precondition of appeal under subsection (3), no appeal may be brought to the Assessment Review Board under subsection (1) unless either of the following circumstances exist:

1. The person has received a notice of reconsideration under subsection 39.1 (7) or (8).
2. The person has not received a notice of reconsideration under subsection 39.1 (7) or (8) and the deadline by which it should have been mailed under the applicable subsection has passed.

22The notice of reconsideration is mailed by MPAC. This is MPAC’s process over which the Board has no jurisdiction. Section 40(4) of the Act only grants the Board jurisdiction to extend the time for filing an RfR if the person made the request during the taxation year of the year under review. The Legislature did not grant the Board powers to extend filing of the RfR beyond the same taxation year. Ultimately, this denies a taxpayer’s right of appeal if the application was not made within the time stipulated under the Act.

23I agree with Mr. Baranowski that the Appellant has the procedural right to be heard, this right was not denied by the Board as the RfR process did not mature into an appeal and therefore, was not before the Board. Neither was it denied by MPAC. MPAC had given the Appellant adequate notice and time to provide the requested information. There is no merit in Mr. Baranowski’s argument that the Appellant’s right to be heard was infringed.

24Mr. Baranowski submits that if there is no existing legislation that authorizes MPAC to “nullify” an RfR, the Board is obligated to exercise its powers under the Act to correct MPAC’s wrongful act using the following sections in the Act:

1. s. 44(1) - Assessment may be open upon appeal
2. s. 45 - Powers and functions of Assessment Review Board “upon an appeal”
3. s. 40 (22) - Power to determine law and fact- The Assessment Review Board “as to all matters within its jurisdiction”
4. s. 40 – Appeal to the Assessment Review Board (which also states the precondition of the Appeal of an RFR for certain properties),
5. s. 33 - Omitted assessment,
6. s. 32 - Correction of errors, and
7. s. 37 (6) – Adjustment of taxes as a result of appeal.

25In Nicoletti, Mr. Baranowski also made the same argument using some of these sections to request that the Board apply the settlement reached by the parties for the 2019 taxation year to the 2017 and 2018 taxation years, when no appeal was filed for the 2017 and 2018 taxation years. Member Pilon denied Mr. Baranowski’s motion and determined that the sections cited by Mr. Baranowski cannot create appeals where none existed.

26Mr. Baranowski argued that this panel is not bound by a previous decision of the Board. He is correct. However, according to the decision in Union Gas Limited v. Municipal Property Assessment Corp., [2016] O.A.R.B.D. No. 82 , at paragraph 8 the Board stated that a decision of the Board “that is directly on point should be followed unless there is a significant change in circumstances or there are reasons to doubt that the previous decision is correct”.

27All the sections cited by Mr. Baranowski are not relevant to the issue he raised. The RfR process did not mature to an appeal and all the sections cited by Mr. Baranowski apply to appeals that are before the Board.

Issue No. 2 - What is the correct current value of the Subject Property for the 2019 taxation year?

28In accordance with s. 44(3)(a) of the Act, the Board is to determine “the current value of the land”. Section 1 of the Act defines current value as “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”. That is, for the 2019 taxation year, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.

29The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the property on the valuation date or close to it. If, as in this case, no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

Proposed Comparable Properties

30MPAC presented the Board with five comparable property sales. The fifth sale was used as a reference sale and was not used by MPAC to provide the Board with its opinion of value for the Subject Property. I find that the fifth sale is of no assistance to the Board in determining the correct current value of the Subject Property. The Appellant also used MPAC’s Property Sale 2 to provide the Board with what he believes is the current value of the Subject Property. The details of four of MPAC’s property sales are provided in Table 1.

Table 1

Address	Assessment ($)	Sale Date & Sale Amt. ($)	Time / Adjusted Sale ($)	Building/ Size (sq. ft.)	Lot Size (Acres)	Year Built	Quality of Construction
Subject Property 36 Pebblelane Court	3,248,000	N/A	N/A	5,172	0.39	2000	8.5
Sale 1 28 Denham Drive	4,015,000	October 2016 (3,900,000)	3,326,276	5,546	0.46	2010	8.5
Sale 2 33 Pebblelane Court	3,567,000	August 2015 (2,600,000)	2,831,325	4,939	0.32	1998	8.5
Sale 3 3 Bryson Drive	3,691,000	April 2017 (4,000,000)	3,121,540	5,000	0.4	2008	8.5
Sale 4 8 Bryson Drive	3,273,000	February 2017 (3,550,000)	2,851,161	4,829	0.34	2007	8.0

31I find that the best comparable property is Sale 2. This sale is on the same street as the Subject Property and according to the Appellant, it is located opposite the Subject Property. It is the closest to the Subject Property. Ms. Yu admitted during cross examination that this sale is 0.0641 kilometers from the Subject Property. These factors will make it attract the same market force as the Subject Property. The Subject Property is only two years newer than Property Sale 2. It has the same quality of construction of 8.5 as the Subject Property, and its building size and lot size are similar to the Subject Property. This Property Sale sold within the shoulder years of the valuation date of January 1, 2016, which is 12 months on either side of the valuation date.

32I find that Property Sale 1 is superior to the Subject Property, which was admitted by Ms. Yu. This sale has a larger lot size of 0.46 acres, the building size is 5,546 sq. ft and it is 10 years newer than the Subject Property. This sale is not comparable to the Subject Property.

33The Appellant requests that the Board disregard Property Sales 3 and 4. He argues that both sold in 2017, outside the shoulder years and Property Sale 4 has a different quality class of 8.0. I agree with the Appellant. The further a sale is from the valuation date, the less likely it reflects the market on the valuation date. It is also the practice of the Board not to rely on sales outside the shoulder years, if there are market tested sales within the shoulder years.

34In determining the correct current value of the Subject Property, the Board used only Property Sale 2. I accept the Appellant’s method of using the time adjusted sale price (“TASP”) per sq. ft. Ms. Yu argued that this method was improper as MPAC does not use this method for residential properties, only for waterfront properties.

35The mandate of the Board is to determine the correct current value of the Subject Property. The Board has used various methods to determine the correct current value for residential properties including TASP per sq. ft. The Appellant presented the case of Kaur v. Municipal Property Assessment Corp. Region No. 15, [2012] O.A.R.B.D. No. 73 ("Kaur"), to support his submission that a comparable property with a different quality of construction from the Subject Property should be disregarded. I find that this case is also useful regarding the use of the TASP per sq. ft.

36In Kaur, the Board used the time adjusted sale per sq. ft. analysis to determine the current value of the subject property under appeal. At paragraph 24, the Board determined that a proposed comparable property presented by MPAC and the appellant were directly comparable to the subject property since they were similar in site area, total building area, age, quality of construction and structure. The Board determined that value per square foot was the best evidence of current value. The subject property in Kaur was a two-storey detached residential house, like the Subject Property in this appeal.

37In this matter, the Board will use the TASP value of $573.25 per sq. ft. of Property Sale 2 applied to the total building area of the Subject Property of 5,172 sq. ft. The Board determines the correct current value of the Subject Property to be $2,965,000 (rounded).

Issue No. 3 - Whether there should be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be.

38Section 44(3)(b) of the Act directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed and “adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land”.

39The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the TASP.

40Mr. Baranowski advised the Board that he agrees with MPAC’s median ASR of 0.95 derived from 30 residential sales of single-family detached homes from January 1, 2015 to December 31, 2016 within 1.0 kilometres of the Subject Property. However, he disagrees with MPAC that an equity reduction is not necessary with a median ASR of 0.95. Mr. Baranowski submits that applying the ASR of 0.95 to the current value of $2,963,556, the current value of the Subject Property should be reduced to $2,800,000 (rounded).

41MPAC argued that its standards indicate that equity is achieved if the median ASR falls between 0.95 and 1.05, which is in line with the International Association of Assessing Officers standards, which states that the median ratio should fall between 0.90 and 1.10. MPAC submits that similar properties in the vicinity are being assessed at or near their current values and therefore, an equitable reduction of the correct current value is not required.

42I disagree with the Appellant’s argument. An adjustment does not have to be made any time the ASR is below 1.00. In Re Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et at., 1968 CanLII 183 (ON CA) ("Empire Realty") the Ontario Court of Appeal provides the main objective of municipal taxation as:

... the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the application of a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.

43The Court further addressed equity in assessment by stating that:

... an assessment made at the actual value of lands and buildings in compliance with the provisions of s. 35(1) would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred ... (Emphasis added)

44The undisputed median ASR of 0.95, is not substantially below 1.00. Consequently, the evidence does not lead me to make an adjustment for equity to the determined correct current value of $2,965,000.

CONCLUSION

45The Board finds that MPAC did not “nullify” the Appellant’s 2017 RFR. The RFR process was incomplete and deficient. Accordingly, a notice of reconsideration was not provided by MPAC and the Appellant could not file an appeal for the 2017 and 2018 taxation years with the Board.

46The correct current value of the Subject Property is $2,965,000 with no adjustment for equity.

ORDER

47The Board orders that the assessment of the Subject Property is reduced from $3,248,000 to $2,965,000 for the 2019 taxation year. This decision also applies to the 2020 taxation year.