Municipal Property Assessment Corporation v. 388210 Ontario Limited, 2020 CanLII 5708

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 22, 2020

FILE NO.:

DM 2020M04

Moving Party(ies):

Municipal Property Assessment Corporation (“MPAC”)

Respondent(s):

388210 Ontario Limited

Respondent(s):

The Corporation of the City of Brampton

Property Location(s):

0 Centre Street

Municipality(ies):

Brampton

Roll Number(s):

2110-090-039-10115-0000

Taxation Year(s):

2005 to 2016

Hearing Event No.:

726780

Legislative Authority:

Section 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31

Heard:

December 13, 2019 by written submission

Parties

Counsel⁺/Representative

Submissions

MPAC

Calvin Ho

Moving Party

388210 Ontario Limited

Not Received

The Corporation of the City of Brampton

Not Received

DISPOSITION OF THE BOARD DELIVERED BY JEAN-PAUL PILON

DISPOSITION OF MOTION

1This motion was filed by MPAC on behalf of The Corporation of the City of Brampton (the “Municipality”) and 388210 Ontario Limited (the “Owner”), a company entirely owned by its associated condominium corporations. The Owner in turn owns a recreation centre facility at 0 Centre Street in Brampton (the “Subject Property”) which serves the residents of those three not-for-profit condominium corporations that own it. The residents of those condominiums have exclusive use of the Subject Property.

2In the motion, the Municipality and the Owner through MPAC request an extension of time for bringing appeals and a direction that the assessment corporation be the applicant pursuant to section 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) because it appears that there are palpable errors in the assessment roll. The taxation years at issue in the motion are 2005 to 2016.

3The palpable errors alleged in the motion relate to the separate assessment of the Subject Property, including an associated business, that the parties now acknowledge should have been assessed as common elements to the condominiums. In essence, it is argued that the value of these common elements was effectively included in the assessments of the associated condominium units, and that the result was double taxation.

4There was an indication in one of the two affidavits that MPAC did not consent to the motion. That appears, however, to no longer be the case with MPAC filing the motion on the Municipality and the Owner’s behalf.

5For the reasons that follow, this motion is denied.

REASONS FOR DISPOSITION OF MOTION

Facts

6The only evidence before the Assessment Review Board (the “Board”) in the motion are two affidavits from Yvonne Kwiecien, the Municipality’s Manager of Taxation and Assessment. One affidavit was sworn on January 9, 2019 and a supplementary affidavit was sworn on August 1, 2019 (described as the first and second affidavits respectively).

First Affidavit – Palpable Errors and Key Time Periods

7The first affidavit includes a chart setting out the assessments (and classifications, which are of lesser importance here) of the recreation centre and an associated dog grooming business also in the Subject Property for the taxation years at issue in this motion. It shows three broad time periods, and the parties allege palpable errors in the roll in the first two of the time periods.

8In the first time period, there was only one assessment for the recreation centre portion of the Subject Property which ranged in increasing amounts, from $810,000 to $1,043,000 in the 2005 to 2010 taxation years. In the second time period, for the 2011 to 2016 taxation years, assessments ranged in increasing amounts in two parts, from $91,587 to $108,000 for the dog grooming business, and a nominal assessment of $9 for the recreation centre. The third time period includes only the 2017 and 2018 taxation years, with the recreation centre assessed at the same nominal $9, and no assessment for the dog grooming business which was removed through tax appeal applications.

9In the 2005 to 2008 taxation years (the first period), MPAC sent notices of assessment to an incorrect address and they were not received by the Owner. However, the Municipality was aware of the errors starting in 2006. The affidavit evidence indicates the Owner became aware of the errors in 2011, but the motion record says that the Owner discovered the errors in 2008.

10Discussions between MPAC, the Municipality and the Owner after those errors were discovered led to the change to the second period starting in 2011, where MPAC assessed the recreation centre at $9 but assessed the dog grooming business separately. At the same time, MPAC and the Municipality agreed that MPAC would address the 2005 and 2006 taxation year assessments with the Board on the basis that there were palpable errors in the roll. They further agreed that the Municipality would address the issues with the later taxation years by way of tax applications. Neither party complied with their obligations in their agreements, and all of the errors remained in the roll.

11Meanwhile, the owner of the dog grooming business disputed its assessment and, despite extensive correspondence between the parties including counsel for the business owner, no request for reconsideration or appeal was filed. MPAC and the Municipality now agree that that part of the Subject Property is an amenity to the condominiums and should have been exempt from taxation. It was not until the third period starting in 2017 that the change was made.

Prejudice to the Owner

12The first affidavit addresses prejudice. It says the Municipality levied taxes on the Subject Property and remitted the upper-tier and education portions, also showing penalties and interest for non-payment in its financial statements. The first affidavit goes on to say that the tax debt prejudices the owner of the Subject Property but that there is no prejudice to MPAC. The Municipality indicates that it waives any prejudice in the motion.

Second Affidavit – Appeal Routes

13The second affidavit provides an explanation as to “why the City did not use the section 40 Assessment Act appeal route to address the errors on the roll.”

14The first reason given was that “the City expected that its abundance of communications to MPAC over multiple years regarding the errors would engage MPAC to carry out its statutory mandate and correct the errors.”

15The second reason given was that “as a small department within the City of Brampton we do not routinely appeal assessment roll errors as that would be an inefficient use of taxpayer resources, but rather communicate to MPAC as the assessing authority about its errors.”

16The third reason “flows from the City’s adopted policy in respect of assessment appeals” which “limits the circumstances where City staff may launch appeals. None of the palpable errors on this property fit unto those limits on City staff authority to appeal.”

Analysis

17The first question to be determined is whether there are palpable errors in the roll. If there are palpable errors in the roll, the next question to be determined is whether the Board should exercise its discretion to correct the errors.

Palpable Error

18In Municipal Property Assessment Corporation, Region No. 03 v Ottawa (City), 2019 CanLII 101175 (ON ARB), the Board noted at para. 29 that section 40.1 of the Act is the only part of the Act that is not subject to a limitation period. It “is an extraordinary remedy to be used sparingly, or the balance of the Act will be undermined,” and the relief requested is only to be granted “in the clearest of circumstances.”

19At paras. 30 and 31 of that decision, the Board reviewed some of the more compelling indicators in its jurisprudence of palpable errors in the roll, which include: if an error is truly inadvertent or unintentional; if it is plain, obvious or easily perceived; and, if it is of conspicuous magnitude and easy to understand.

20In this case, the Board finds that the errors alleged do not meet these threshold considerations. They are not, therefore, palpable errors in the roll.

Inadvertent and Unintentional

21Palpable errors must first be inadvertent and unintentional.

22In this case, the errors must have been inadvertent and unintentional at the beginning because notices of assessment were sent to an incorrect address and did not initially come to the Owner’s attention. They did, however, come to the Owner’s attention by 2011, possibly earlier, because the Subject Property became subject to a tax sale which then led to discussions as to how the issues could be resolved.

23The Board finds that the errors could no longer have been described as inadvertent and intentional at that point because they were known. The Board finds that starting at that point they could have been addressed through timely appeals in the normal process.

24Furthermore, the Board’s decisions in Kinglip Holdings Inc. v. Municipal Property Assessment Corp. Region No. 9, 2015 CarswellOnt 1733 at para. 15 and Jolis Investments Ontario Ltd. v. Municipal Property Assessment Corp. Region No. 14, 2011 CarswellOnt 1822 at para. 10, determined that a palpable error is more than an error in judgment by a party which would be the subject of an appeal. This suggests that an error is not a palpable error when a party becomes aware of an error yet fails to file appeals.

Plain, Obvious, Easily Perceived, Conspicuous Magnitude and Easy to Understand

25Palpable errors must be plain, obvious, easily perceived, of conspicuous magnitude and be easy to understand.

26The Board finds the errors in this case do not meet the threshold of being plain, obvious and easily perceived. This is because their discovery initiated an investigation of development agreements, restrictive covenants, and articles of incorporation, leading to substantial correspondence and meetings between the Owner, MPAC and the Municipality, as evidenced in the first affidavit.

27All of this was required to determine that the Subject Property should not have been subject to taxation. It was only after that investigation that the issue could then have been characterized as easy to understand and of conspicuous magnitude, by that time with substantial arrears of taxes showing on the Municipality’s books.

28MPAC’s motion record relies upon the Board’s decision in Canadian Tire Corporation Limited v. Municipal Property Assessment Corporation, Region 15, 2017 CanLII 3661 (ON ARB) (“Canadian Tire”) which determined, at para. 9, that “an incongruity between the assessment roll and the legal description of land is a common basis for a finding that there is a palpable error.” A later Board decision, however, Canadian National Railway v Municipal Property Assessment Corporation, Region 19, 2019 CanLII 114732 (ON ARB) (“CNR”), opined at para. 46 that “the “common basis” referred to in Canadian Tire is indicative but not conclusive of a palpable error because there is a great deal of other jurisprudence to consider in the determination,” as was reviewed above.

29After applying that relevant jurisprudence, the Board finds that the errors in the roll cannot be characterized as palpable errors.

Discretion

30Answering the question of whether the Board should exercise its discretion to correct the errors is unnecessary in view of its determination that there are no palpable errors in the roll. Even if the errors were palpable errors, the Board would not have exercised its discretion to create appeals for the reasons that follow.

31The Board’s decision in Piggott v. Municipal Property Assessment Corporation, Region 28, 2019 CanLII 109527 (ON ARB) at para. 31, provides that the Board should only exercise its discretion to correct palpable errors if “it would (be) unreasonable, unfair and highly prejudicial to enforce the statutory filing deadlines in light of the palpable error.”

Unreasonable and Unfair

32The first question relating to the exercise of discretion would have been whether it would have been unreasonable and unfair not to create appeals in these specific circumstances.

33It might have been reasonable to create appeals to correct any palpable errors had the request been made in 2006 when they were discovered, but not well over a decade later, particularly when the parties acknowledge that mismanagement is what led to the very lengthy delay.

34As noted above, the Municipality’s interest in creating the appeals relates to its having to remit funds to others and showing penalties and interest in its books. Yet at the same time, the Municipality itself was to blame for having placed policy limitations on its staff that would have prevented it from commencing process at the Board.

35The same reasons for not filing appeals in the normal course were given in another situation involving the Municipality, Municipal Property Assessment Corporation Region 15 v Brampton (Corporation of the City), 2020 CanLII 1382 (ON ARB). That case involved a cemetery taxed as vacant residential land for years when it should have been exempt from taxation, which also led to arrears, penalties and interest.

36The Board determined at para. 24 of that decision that “the Municipality essentially made its decisions – to rely on MPAC to correct the errors instead of filing appeals, in the allocation of its resources and in the placement of limitations of its staff – at its peril.” That decision also cited Wellington (County) and Municipal Property Assessment Corp., Region 22, 2018 CarswellOnt 6018 where municipal parties to appeals had information at hand to file appeals but did not. The Board found in that case that “it is not unfair to leave the assessment roll as it is when a party fails to file appeals in a timely way due to their own negligence.”

37The motion record cites two additional cases on this point. The first is Municipal Property Assessment Corp. v. Tait, 2018 CanLII 17725 (ON ARB) (“Tait”) for the proposition that “where an owner was not aware of an issue due to a mistaken mailing address and acted diligently in attempting to correct the error when they discover it, the Board has elected to exercise their s. 40.1 discretion.” However, in that case the owner was not aware of the error until 2017 “and took reasonable steps to cure the defect as soon as she became aware (at para. 12).” That was not the case here, when the owner was aware of the issue as early as 2008 and the problem was not addressed with the Board until a decade later.

38The motion record then says Tait should be followed because in Torma v. Municipal Property Assessment Corporation, Region 16, 2018 CanLII 113006 (ON ARB) the Board determined at para. 54 that “consistency is an important part of Board decisions where facts are the same.” The facts are not the same here and Tait can be distinguished.

39As a result, had discretion been an issue, the Board would have found that it would not have been unreasonable nor unfair for it to have left the errors in the roll.

Prejudice

40Prejudice to the parties is another issue the Board would have considered had it found the errors in the roll to be palpable errors.

41The motion record indicates that the Municipality has waived any prejudice. It argues, however, that the Owner would be prejudiced having been “diligent in attempting to correct the error once it was notified of the mistake” by contacting the Municipality and MPAC, and then relying on their representations that they would resolve the issues.

42What is surprising is that after many years of discussion and inaction, no one, including the Owner, either filed an appeal for any of the taxation years that came and went, or attempted to correct the errors in the roll retroactively, until now. The second affidavit notes that MPAC’s records continue to show an incorrect address for the property owner, yet it was clear to all involved that there were errors many years before this motion was filed.

43The Board adopts the reasoning at para. 53 of CNR on discretion:

…prejudice is not the Board’s only concern when deciding whether to exercise its discretion in these cases. On this point the Board again references the Richmond and York decisions quoted above where simple inadvertence or carelessness is not sufficient justification to exercise the extraordinary remedy requested. There must be more, because the Board has consistently determined that correcting palpable errors is a rare and extraordinary remedy to be exercised sparingly. Otherwise, the time limits in the Act would be meaningless, and that could not have been the intention of the legislature in enacting section 40.1 of the Act.

44The facts in this case lack that additional justification for the Board to have exercised its discretion, had discretionary relief been an active issue. The Board would therefore have declined to exercise its discretion to create appeals had there been palpable errors in the roll.

CONCLUSION

45The motion to create appeals to correct palpable errors in the roll is denied.