City of Kitchener v. CP REIT Ontario Properties Ltd, 2020 CanLII 30640

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

ISSUE DATE: April 20, 2020 FILE NO.: DM 164392

Moving Party(ies): City of Kitchener Assessed Person(s): CP REIT Ontario Properties Ltd, Loblaw Properties Limited Appellant(s): CP REIT Ontario Properties Ltd, Loblaw Properties Limited Respondent(s): Municipal Property Assessment Corporation Region 21 Respondent(s): City of Kitchener

Property Location(s): 1375 Weber Street East Municipality(ies): City of Kitchener Roll Number(s): 3012-030-004-16603-0000 Appeal Number(s): 3310912, 3364694, and 3369736 Taxation Year(s): 2018 and 2019 Hearing Event No.: 729164

Legislative Authority: Rules 8, 24 and 61 of the Assessment Review Board’s Rules of Practice and Procedure

APPEARANCES:

Parties	Counsel*/Representative
City of Kitchener	Greg Demacio
Loblaw Properties Limited	Stephen Longo* and Alexander Pletsch*
Municipal Property Assessment Corporation	No submissions received

HEARD: February 10, 2020 in person

ADJUDICATOR(S): Carly Stringer, Member

MOTION DECISION

OVERVIEW

1The City of Kitchener (“Kitchener”) has brought this motion seeking dismissal of appeals for the 2018 and 2019 taxation years for the property at 1375 Weber Street East, Kitchener, Ontario (the “Property”).

2For reasons that follow, this motion is denied.

Background

3The Property is a 60,058 square foot box format retail store comprised of both grocery and general merchandising space. The Property is owned by CP REIT Ontario Properties Ltd. (“CP REIT”), and leased by its subsidiary, Loblaw Properties Limited (“Loblaws”) (collectively, the “Appellants”). Loblaws brought Appeal No. 3369736 relating to the 2019 taxation year, while CP REIT brought Appeal Nos. 3310912 and 3364694 relating to the 2018 and 2019 taxation years, respectively.

4The parties were provided a Schedule of Events outlining deadlines for the various procedural steps in the appeals. The Appellants were required to provide their disclosure and Statement of Issues (“SOI”) for the subject appeals to all parties by July 12, 2019.

No SOI by Deadline

5No SOI was provided by July 12, 2019. On July 29, 2019, MPAC’s case manager at the time, Katelyn Morrow, circulated a notice respecting the late SOI. Kitchener was copied on this communication.

Kitchener Not Included on Requests for Extension of Time

6On August 28, 2019, legal counsel for the Appellants, Stephen Longo, contacted Ms. Morrow by email requesting an extension for providing the SOI until September 30, 2019. Ms. Morrow consented via email on August 29, 2019. Kitchener was not included on this email exchange and had no knowledge respecting this extension of time.

7On October 14, 2019, Mr. Longo communicated with MPAC’s legal counsel requesting extensions for providing SOIs for various appeals, including the appeals at issue on this motion. On October 31, 2019, MPAC agreed to grant the Appellants until January 17, 2020 to provide their SOI for the subject appeals on the condition that the Appellants obtain consent from the affected municipality.

8Kitchener was not included in these October communications. The Appellants did not seek consent from Kitchener respecting an extension of time to file the SOI, or otherwise reach out to the municipality regarding the matter - apparently through inadvertence on the Appellants’ part.

9On December 6, 2019, MPAC circulated another notice respecting the late SOI, requesting a copy by December 10, 2019 failing which MPAC would file a Request to Dismiss a General Proceedings Appeal for Failure to Serve a Statement of Issues. Kitchener was copied on this communication. MPAC has not provided evidence or otherwise made submissions on this motion. Therefore, the evidence is unclear as to whether the case manager that sent this December 6, 2019 notice was aware of MPAC’s October 31, 2019 conditional agreement to extend time to January 17, 2020.

10On December 9, 2019, Loblaws sent an email to Mr. Longo advising him of this December 6, 2019 notice from MPAC.

Kitchener Requests Dismissal

11Not having been privy to the various communications respecting an extension to the timeline for providing the SOI, on December 30, 2019, Kitchener emailed the parties to request the SOI.

12On January 8, 2020, Kitchener submitted a Request to Dismiss a General Proceedings Appeal form to the Board. Later that same day, Mr. Longo wrote to the Board asking it to reject this request to dismiss, on the basis of the October 31, 2019 agreement with MPAC to extend the SOI deadline to January 17, 2020.

13On January 15, 2020, the Board scheduled this dismissal motion for February 10, 2020.

14On January 21, 2020, the Appellants served the SOI for the Property and an expert report on all parties, including Kitchener.

15On January 24, 2020, Kitchener served its materials for this motion.

16The Appellants have provided evidence that they served an Amended SOI on January 31, 2020, clarifying that the 2018 tax year was meant to be included in the January 21, 2020 SOI. Kitchener denies having been served this Amended SOI.

17Kitchener’s position is that its motion should be granted, and the appeals should be dismissed for the Appellants’ failure to provide the SOI in accordance with the Schedule of Events. The Appellants argue the motion should be denied and the appeals should proceed. MPAC has not provided evidence or made submissions, and presumably takes no position on this motion.

Issues for the Hearing

18At issue on this motion, generally, is whether this Board should dismiss the subject appeals. Two sub-issues must be determined to address that primary issue:

1. Have the Appellants failed to comply with the Board’s Rules of Practice and Procedure?
2. If yes, does this failure to comply warrant dismissing the appeals?

Result

19For the reasons that follow, this Board finds the Appellants failed to provide their SOI in accordance with the timelines prescribed by the Schedule of Events. However, this is not enough to justify dismissing the appeals given i) the breach has been cured; ii) the circumstances of the breach, including communications with MPAC and the Appellants’ demonstrated intent to proceed with the appeals; and iii) the prejudice does not weigh so heavily against one party over the others so as to justify dismissal which is a remedy that has serious consequences for the Appellants. Accordingly, the motion is denied.

PRELIMINARY MATTERS

20Loblaws has asked in its materials that the Board confirm the change in representative for various 2009-2019 appeals (being Appeal Nos. 2047060, 2342143, 2689796, 2919752, 3025660, 3090351, 3157092, 3310912 and 3364694) to “Loblaws Properties Limited” from Altus Group. It has also requested this Board transfer the 2016 CVA appeals to the legacy appeal timeline in place, with a Statement of Issues due for all open base years (2008, 2012 and 2016) on February 19, 2020 and all other procedural dates as set out in the legacy appeal Schedule of Events.

21The only motion before this Board is a request for dismissal for Appeal Nos. 3310912, 3364694 and 3369736. The Board will not grant relief in relation to any other issues. If Loblaws believes the above-noted relief is appropriate, it is directed to follow the Board’s usual procedures to request it.

ANALYSIS

Issue 1 - Have the Appellants failed to comply with the Rules?

22Rule 8 provides that the Board will determine the appropriate consequences of non-compliance with the Rules. Rule 24(e) permits dismissal without a hearing if the “appellant has not complied with statutory requirements or these Rules”. The Board has repeatedly held that dismissal “is an extreme remedy and should only be granted in the clearest of cases”: Municipal Property Assessment Corporation, Region No. 9 v 234900 Ontario Ltd., 2018 CanLII 248 (ON ARB), 2017 CanLII 74719 (ON ARB) at paragraph 8. In Municipal Property Assessment Corporation, Region No 7 v Cherry, 2018 CanLII 60392 (ON ARB) at paragraph 10, the Board clarified that the “clearest of cases are those where there are willful breaches of the Board’s orders or Rules that are entirely attributable to the taxpayer”.

23The Schedule of Events in this case required the SOI be served on the parties by July 12, 2019.

24Although the Appellants obtained consent from MPAC to extend the deadline to January 17, 2020, that consent was conditional on the Appellants obtaining consent from Kitchener. The Appellants made no attempt to obtain Kitchener’s consent, or otherwise engage Kitchener in discussions respecting the Property appeals.

25The Appellants did not seek approval from the Board for an amendment to the Schedule of Events that would allow them to serve and file the SOI in January 2020.

26The Appellants served an SOI on January 21, 2020 that included the subject appeals, among others. The Appellants maintain that an Amended SOI was served on January 31, 2020, clarifying that the January 21, 2020 SOI was meant to include the 2018 taxation year. Kitchener disputes having been served an Amended SOI.

27It is concerning that Kitchener was not contacted respecting the various extensions of time requested by the Appellants. Municipalities are statutory parties to appeals before this Board. They stand to be affected by these appeals. The Appellants had committed to contacting the municipalities affected by any extensions of time, and MPAC’s October 31, 2019 email was clear that its consent to an extension of time to January 17, 2020 was conditional on the Appellants obtaining consent from the affected municipalities. The Appellants did not obtain this consent. The Appellants’ explanation for a failure to obtain consent from Kitchener – “inadvertence” – is not a particularly satisfying explanation, but I accept it may be the only explanation available in the circumstances. It is also problematic that, in addition to failing to obtain consent from Kitchener, the Appellants failed to seek an amendment to the due date in the Schedule of Events from the Board.

28The failure to comply with the Schedule of Events is entirely attributable to the Appellants and Kitchener bears no responsibility in that regard. However, the Appellants’ breach has since been cured by the service and filing of a detailed SOI and expert report in late January. Even if Kitchener has not yet received the Amended SOI, the only difference between both versions is confirmation that the 2018 taxation year was meant to be included. This amendment is not so significant that I would find the breach has not been otherwise cured.

Issue 2 - Does this failure to comply warrant dismissing the appeals?

29Although the Appellants have now served and filed their Statement of Issues, they did fail to comply with the Schedule of Events. As such, I will consider the second part of the analysis.

30Although a party’s failure to provide a SOI in accordance with the prescribed timeline may be a valid basis for dismissal, there must be more than non-compliance. This Board has held that the primary consideration on a dismissal motion will be the prejudice to the parties: Municipal Property Assessment Corporation, Region 14 v Upper Keele Inc., 2018 CanLII 126632 (ON ARB), 2018 CanLII 248 (ON ARB) at paragraph 10.

31Kitchener argues it is prejudiced by the Appellants’ failure to provide a SOI in that its ability to manage its own resources is challenged when the parties fail to comply with timelines. Kitchener has also argued there is an additional negative impact on its fiscal affairs in the sense that extension of due dates in the Schedule of Events delays the timely resolution of appeals.

32I do not agree with the Appellants that there is little to no prejudice to Kitchener given the due date for completion of the Mandatory Settlement Meeting is currently April 24, 2020 and the due date for filing documents to be relied on at the hearing is May 22, 2020. At this stage, it is almost certain that the parties will be seeking amendments to the Schedule of Events that will extend the timelines of these appeals. As noted by this Board in 857529 Ontario Inc. Magna International Inc. Municipal Property Assessment Corporation, Region 15, 2019 CanLII 133074 (ON ARB) at paragraph 28, “… it should be well understood by parties that failure to meet timelines both inherently impacts other parties to a proceeding who prepare and provide required information on time, and impacts the Board’s ability to manage and deal with its caseload”.

33Overall, I find there is prejudice to Kitchener from the Appellants’ failure to provide a SOI in accordance with the required due date. However, I must also consider any prejudice that the Appellants would suffer if I were to dismiss the appeals. Clearly, the Appellants would be prejudiced if the appeals at issue were dismissed in their entirety. They would be completely precluded from pursuing their appeals.

CONCLUSION

34This Board will strictly enforce its Rules. It expects compliance with the timelines prescribed in the Schedule of Events, and it expects that all statutory parties will be provided with notice and information in accordance with legislation and the Rules. Kitchener was not at fault in this.

35However, this is not a clear case where there would be overwhelming prejudice to one side over the other. Given the totality of the circumstances, including that the Appellants were working with MPAC during the applicable timeframe to obtain an extension of the deadline, and demonstrated a clear intent to proceed with the appeals and file the SOI; that the Appellants appear to have failed to seek municipal consent through sheer inadvertence; and that the Appellants have cured the defect and provided the SOI, this Board is not prepared to grant the extreme remedy of dismissing the appeals. But for the fact that the Appellants were clearly conducting work on the appeals and filed their SOI and expert report before this motion was heard, the result may have been different.

36For the above reasons, the Board denies Kitchener’s motion to dismiss.

ORDER

37The motion is denied. The Schedule of Events affords the Respondents 12 weeks after receiving the SOI to provide their Statement of Response. Therefore, the Board directs the case coordinator to amend the Schedule of Events to provide a new due date for the Respondents to serve their Statement of Response, being 12 weeks from the issuance date of this decision. All subsequent due dates are to be adjusted accordingly.