Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 13, 2020

FILE NO.: WR 165197

Assessed Person(s): Gillian Louise Ward

Appellant(s): Gillian Louise Ward

Respondent(s): Municipal Property Assessment Corporation Region 24

Respondent(s): Municipality of North Perth

Property Location(s): 100 Maddison Street West

Municipality(ies): Municipality of North Perth

Roll Number(s): 3140-360-006-21800-0000

Appeal Number(s): 3269407, 3313246, 3366663 and 3410286

Taxation Year(s): 2017, 2018, 2019 and 2020

Hearing Event No.: 730177

Legislative Authority: Section 40 of the Assessment Review Board Act, R.S.O. 1990, c. A.32

APPEARANCES:

Parties	Counsel/Representative*
Gillian Louise Ward	Graham Ward
Municipal Property Assessment Corporation	Brittany Allen
Municipality of North Perth	No one appeared

HEARD: June 10, 2020 by telephone conference call

ADJUDICATOR(S): Jean-Paul Pilon, Member

DECISION

OVERVIEW

1Gillian Louise Ward is the owner of a property at 100 Maddison Road West in the Municipality of North Perth (the “Subject Property”).

2Ms. Ward appealed her assessment for the 2017 taxation year pursuant to section 40(1) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). The Assessment Review Board (the “Board”) deemed appeals for the 2018, 2019 and 2020 taxation years pursuant to section 40(26) of the Act.

Background

3Ms. Ward’s representative at the hearing, Graham Ward, argued that the Subject Property should have been assessed as having no value because soil contamination at a nearby property had negatively affected the current value of the Subject Property.

4MPAC’s position at the hearing was that the returned value of $169,000, $96,800 of which was in the commercial tax class and $72,200 in the residential tax class, should be confirmed.

Equity

5The issue of equitable assessment was not raised as a ground of appeal in Ms. Ward’s statement of issues in this general stream proceeding. Pursuant to Rule 49 of the Board’s Rules of Practice and Procedure (the “Rules”) and the Board’s determination at para. 70 of its decision in Tranter v. Municipal Property Assessment Corporation, Region 02, 2019 CanLII 70205 (ON ARB) cited by MPAC, the Board did not consider equity in this proceeding.

Issues for the Hearing

6The primary question to be determined in this proceeding is the correct current value of the Subject Property as of the valuation date, January 1, 2016. The Board’s analysis below has two parts.

7First is a determination as to whether Mr. Ward proved the existence of the environmental issue at the property nearby to the Subject Property on a balance of probabilities. Second is an analysis of the remaining evidence from MPAC relating to properties it alleged were comparable to the Subject Property.

Result

8The same allegation of environmental contamination was before the Board when Ms. Ward appealed her assessment for the 2013 and 2014 taxation years. In its decision in those appeals, Ward v. Municipal Property Assessment Corp. Region No. 24, [2014] O.A.R.B.D. No 569 (the “2014 Decision”), the Board dismissed Ms. Ward’s environmental concerns as unproven on a balance of probabilities. Some of the evidence that Mr. Ward presented at this hearing was different than that relied on at the previous hearing, but the result is effectively the same. If there was any environmental contamination of the nearby property, it was remediated and had no effect on the current value of the Subject Property as at the valuation date.

9The only other evidence before the Board in these appeals was from MPAC on sales of six proposed comparable properties. The Board found that this evidence led to its conclusion below that the correct current value of the Subject Property was $205,918 as of the valuation date.

10MPAC did not provide notice that it was seeking a higher value than that returned in a statement of response pursuant to Rule 38(7). Therefore, the Board confirmed the Subject Property’s returned current value assessment of $169,000.

ANALYSIS

Issue 1 – Environmental Contamination of the Nearby Property

11Mr. Ward is the spouse of the appellant, Ms. Ward, and acted as both an advocate and a witness at the hearing.

12At the hearing, Mr. Ward testified that soil at a property close to, but not next to the Subject Property, was contaminated. He argued that Ms. Ward would have to disclose that contamination to potential purchasers of the Subject Property if and when she sold the Subject Property.

13The question for the Board to determine was whether there was sufficient evidence of any contaminated soil at that nearby property. Only if the answer to that question had been in the affirmative would the Board then have needed to determine whether that contamination had any bearing on the current value of the Subject Property.

14The evidence before the Board on this issue consisted of two-page excepts from two environmental reports, emails and a municipal resolution that are described in more detail below.

15Chronologically, the first of these documents was an excerpt from a report prepared by Burnside Environmental dated February, 1999. It noted a number of environmental issues with the nearby property: that, after a fuel oil tank was removed in 1998, there “was evidence of hydrocarbon impacts on the fill surrounding the tanks and along the footings”; that the water was “apparently” not fit to drink”; that “metal related anomalies were identified” which were “attributable to surface features”; and, that there were 184 tonnes of “impacted soil” present.

16Next were emails from 2004 between staff at the provincial environment ministry (however it was known at the time) and staff of the County of Perth. The emails noted that the Wards had expressed concerns about groundwater contamination at the nearby property and described attempts to determine what happened to soil that had been removed from that property. These emails contained no determinations or conclusions.

17The second excerpted report relied upon by the Wards was on the letterhead of Naylor Engineering Associates and dated November, 2004. This document was also before the Board at the hearing that resulted in the 2014 Decision. The two pages from this report said that “laboratory tests indicated the presence of Petroleum Hydrocarbons and Metals in the analyzed samples; however, the results are below the applicable criteria for all tested parameters.” Without the rest of the report or any other reports available, those criteria and parameters were unknown.

18In summary, this documentation suggested that any environmental issues affecting the nearby property existing in 1999 were resolved by 2004. Despite this, the Municipality of North Perth passed a resolution dated May 6, 2019 indicating “that no evidence has been discovered that indicates or suggests any contamination of the soil” on the nearby property. How they came to that conclusion in view of the report from Burnside Environmental, which determined that at one time there had been contamination, is unknown. However, the Naylor Engineering Associates report stated that any material environmental issues on the nearby property had been resolved.

19Nothing more could be gleaned from this documentation because the authors of these excerpted reports were not at the hearing to provide context, explain their conclusions, or outline their parameters or limitations to which they were subject. More importantly, even if there had been evidence of continuing environmental issues at the nearby property, there was nothing to explain how they would have affected the value of the Subject Property, or why any disclosure would have been necessary to potential purchasers of the Subject Property.

Findings on the Issue of Environmental Contamination

20Based on the evidence before it, the Board finds any environmental issues affecting the nearby property were remediated prior to the valuation date. There was no evidence before the Board that there were any remaining environmental issues that would have affected the current value of the Subject Property.

Issue 2 – Proposed Comparable Properties

21MPAC submitted a valuation analysis using the cost approach that was not relied on at the hearing. This was because MPAC’s representative acknowledged that the land valuation component of that analysis was unsubstantiated.

22As a result, MPAC relied entirely on the direct comparison approach to determine the current value of the Subject Property at the hearing. To that end, it presented evidence concerning the sales of six properties which MPAC submitted were comparable to the Subject Property at the hearing.

23MPAC applied minimal time adjustments to its comparable properties that were not contested at the hearing. In addition, MPAC’s analysis focused on the sale price per square foot of interior space of each, which the Board agreed was appropriate.

24Each proposed comparable property had some sort of automotive business on them like the Subject Property, however five of six of these comparable properties were, in the Board’s view, dissimilar from the Subject Property for the reasons that follow.

25The Subject Property had a site area of 1.06 acres and its buildings were, on average, built in 1972. The total floor area of the buildings was 5,310 square feet.

26MPAC’s first comparable property was 2178 Line 34 which had an adjusted sale price of $158,443 when it sold on July 7, 2016. It had one-third of the site area of the Subject Property and half the floor area. It was built in 1970.

27MPAC’s second comparable property was 6991 Raglan Street, which sold for an adjusted price of $114,658 on April 1, 2014, well before the valuation date. Its site area was dissimilar to the Subject Property at 0.4 acres and interior floor area was also substantially different at 2,980 square feet. It was built in 1956.

28MPAC’s third comparable property, 30 London Road, was built in 1877, almost a century prior to the Subject Property. It sold on December 22, 2015 for an adjusted sale price of $120,119. Its site area was 0.36 acres, but it was more similar to the Subject Property in terms of floor space, having 4,175 square feet.

29MPAC’s fifth comparable property was 225 Turnberry Street East which sold on July 31, 2015 for an adjusted sale price of $174,401. Its site area was similar to the Subject Property’s at one acre, but its floor space was 3,200 square feet and it was built in 1999.

30MPAC’s sixth comparable property was 597 Cedar Avenue, built in 1988. It sold on June 13, 2016 for an adjusted sale price of $133,544. It had one-third of the site area of the Subject Property and just under half the floor space.

31The Board finds that only MPAC’s fourth comparable property at 41A 1^st Avenue was substantially similar to the Subject Property. It sold on January 22, 2016 for $180,000, or an adjusted sale price of $179,821. Its site area was 1.09 acres, where the Subject Property’s area is 1.06 acres. It had a floor area of 4,480 square feet compared to the Subject Property’s 5,130 square feet. The only real difference between two was in the build date, 1990, when the Subject Property was built in 1972.

32MPAC determined the median time adjusted sale price of these six proposed comparable properties was $44.80 per square foot. When that value was applied to the Subject Property, which had a square footage of 5,130 square feet, the total was $229,800. This did not explain MPAC’s submission that the current value of the Subject Property was $169,000. The Board also did not accept that the median value calculated by MPAC could be correct when it used the adjusted sales prices of four properties that were inferior to the Subject Property and only two that were relatively comparable and none that were superior.

Findings on Comparable Properties

33The Board found that the best evidence of value was the sale price of the most similar of these properties, at 41A 1^St Avenue. This property had an adjusted sale price per square foot of $40.14, almost $5.00 per square foot less than the median calculated by MPAC. $40.14 multiplied by the square footage of the Subject Property (5,130) equaled $205,918, which the Board determined to be best evidence of the correct current value of the Subject Property.

CONCLUSION

34Mr. Ward did not prove on a balance of probabilities that there were any environmental issues that would have affected the current value of the Subject Property.

35The correct current value of the Subject Property is $205,918. In the absence of a notice of higher assessment, the Board confirms MPAC’s returned assessment of $169,000.

ORDER

36The Board orders the assessment of the property at 100 Maddison Street West is confirmed at $169,000 for the 2017, 2018, 2019 and 2020 taxation years. The assessment is apportioned as follows:

Residential Tax Class: $72,200

Commercial Tax Class: $96,800