Layton v. Municipal Property Assessment Corporation Region 3, 2020 CanLII 66097

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 10, 2020 FILE NO.: RD 19-055

Assessed Person(s): Melynda Layton and Gregory Sean Terris Appellant(s): Melynda Layton Respondent(s): Municipal Property Assessment Corporation Region 3 Respondent(s): City of Ottawa Property Location(s): 2200 Prince of Wales Drive, Units 401 and 402 Municipality(ies): City of Ottawa Roll Number(s): 0614-120-515-00120-0000 and 0614-120-515-00121-0000 Appeal Number(s): 3208065 and 3208066 Taxation Year(s): 2016 Legislative Authority: Rules 120-123 of the Assessment Review Board’s Rules of Practice and Procedure

Parties	Counsel*/Representative
Melynda Layton	Self-represented
Municipal Property Assessment Corporation	Donald G. Mitchell*
City of Ottawa	Lindsay Hinch*

REQUEST FOR: A review of the Board’s Decision WR 160643 issued on July 26, 2019 HEARD: In writing ADJUDICATOR(S): Maureen Helt, Acting Associate Chair

DECISION

OVERVIEW

1The Municipal Property Assessment Corporation (“MPAC”) and the City of Ottawa (“Municipality”) request a review of the Assessment Review Board (“Board”) Decision WR 160643 dated July 26, 2019 (the “Decision”).

2The Board deferred considering the request for review of the Decision pending the Divisional Court’s issuance of a decision in Municipal Property Assessment Corporation v. Zarichansky¹ (“Zarichansky”). This request for review called into question the correctness of the Board’s analysis in determining the correct current value. The Board attempted to set the assessment at the last uncontested assessed value on the basis that there was inadequate evidence filed to determine the correct current value. Since these were new properties which had been assessed for the first time, the Board set the assessed values at zero relying on the Tervita Corp. v. Canada (Commissioner of Competition), 2015 SCC 3, [2015] 1 SCR 161 (“Tervita Corp”) decision.

3In its decision released on February 20, 2020, the Divisional Court in Zarichansky found that the Board has a statutory obligation as set out in the Assessment Act to determine the current value of a property, and it could not assign a value to a property that it knew not to be current.

4Subsequent to the Zarichansky decision MPAC filed a letter with the Board asking the Board to consider confirming the assessments of Unit 401 at $324,000 and Unit 402 at $330,000 based on the fact that the Board Member made the statement that both properties “would likely have sold for more than $330,000” or cancelling the Decision and sending the matters back to rehearing citing the Divisional Court’s decision in Zarichansky.

5By way of letter dated April 16, 2020, the Board asked parties to file submissions as to whether or not the Decision should be cancelled, and the appeal(s) be sent for rehearing.

6The Board received supplementary submissions from the MPAC, the Municipality, and from the Owners of the property.

ISSUE

7Did the Board err in finding that the correct assessment for the properties was zero value applying the reasoning as set out in Patry Enterprises², Zarichansky v. the Municipal Property Assessment Corporation³ and Tervita Corp?

RESULT

8The Board erred in setting the assessments at zero assessed value. The Board allows the request for review, cancels the Decision and directs that the matters be scheduled for rehearing.

ANALYSIS

Legal Test

9In considering whether to grant a Request for Review submitted pursuant to Rule 120 of the Board’s Rules of Practice and Procedures (“Rules”), the test to be applied is whether the requester has established any of the grounds set out in Rule 121.

Grounds for Review

121. A request for review will not be granted unless the Board is satisfied that:

(a) the Board acted outside its jurisdiction or violated the rules of natural justice or procedural fairness;

(b) the Board made a significant error of law or fact such that the Board would likely have reached a different decision;

(c) the Board heard false or misleading evidence from a party or witness, which was discovered only after the hearing and would have affected the result;

(d) here is new evidence that could not have reasonably been obtained earlier and would have affected the result; or

(e) any of the situations in Rule 122 exist.

Did the Board err in setting the assessed values at the zero value?

10As set out in MPAC’s supplementary submissions, in Zarichansky, the Divisional Court stated:

[32] I agree with MPAC that the four-step decision making process the Board followed is contrary to the scheme of the Assessment Act …The Board is an adjudicative tribunal and it cannot abdicate its statutory duty to determine the current value of a property pursuant to sections 40(19) and 44(3) of the Assessment Act, and instead assign a value to a property that it knows is not current.

[38] In my view, it is evident that the Board’s approach to determining the current value of property is inconsistent with the scheme of the Assessment Act and the relevant statutory provisions. The Board has placed undue emphasis on MPAC’s burden of proof without sufficient regard to the purposes of the Assessment Act and its own obligations under the statute.

[41] In combination, these provisions make clear that an assessment must be based on the current value of the property. The Board has no power to dodge this responsibility based on a finding that MPAC has not met its burden of proof.

[42] The Assessment Act requires all property owners in Ontario to pay their fair share of taxes. The Act is based on a requirement that taxation be based on the current value of the property. The Board’s decision to rely on an earlier assessment in circumstances where MPAC has failed to meet its burden is contrary to this statutory scheme and intent.

[43] It is evident that the Board’s decision in Patry Enterprises was a response to frustration with MPAC’s inadequate evidence. However, the Board’s solution to this problem is not authorized by the statute. Ultimately, the Board has no authority to fix the value of a property at an amount that it knows does not represent the “current value” …

[44] What is the Board to do in circumstances where MPAC has failed to meet its burden? It is not for this Court to prescribe what should be done in all circumstances. There may be cases in which it is appropriate for the Board to require MPAC to obtain additional evidence. There may be cases in which the taxpayer’s evidence is sufficient to assess the current value of the property. And there may be cases in which the Board can find that the previous assessed value is justifiably the current value. However, what the Board cannot do is avoid its responsibility to determine the current value of the property...

11Based on the above, the direction from the Divisional Court is clear. The Board has a responsibility, as set out in the Assessment Act, to determine the correct current value of the property and the Board cannot defer to the last uncontested value or a zero value unless it represents the current value.

12It is clear from the Decision that the sitting Member was well aware that zero was not the current value of the subject properties. He himself made the statement that both properties “would likely sell for more than $330,000”. Furthermore, he relied on a decision in Tervita Corp which neither party submitted in case law and did not give the parties an opportunity to make submissions on Tervita Corp.

13Both MPAC and the Municipality request that the Board vary and confirm the returned assessments of $324,000 for Unit 401 and $330,000 for Unit 402 based on the Decision stating that the two properties would likely have sold for more than $330,000. In the event the Board does not agree to confirm the returned values, MPAC has agreed to a rehearing while the Municipality has taken no position on rehearing the matters.

14In its submission, the Owners submit that their preference is that the original decision stands but based on the Divisional Court decision, they support the Decision being cancelled and the matters be sent for rehearing.

15The Board finds that the Divisional Court made it very clear in Zarichansky that the Board must ensure the property is assessed at the correct current value. It is not clear from the submissions that the returned values are the correct current values. The Board therefore denies the request to confirm the returned values of Unit 401 and Unit 402 without a rehearing.

ORDER

16The Board cancels the Decision and orders a rehearing.

17The Board will issue an 18-week Schedule of Events that the parties are expected to follow to ensure all the necessary evidence is put before the Board on a timely basis. Should the parties request, on consent, that the matters proceed immediately to a settlement conference or a hearing, the parties are urged to file with the Board an Expedited Board Direction Form confirming this request.

Footnotes

1. 1Municipal Property Assessment Corporation v. Zarichansky, 2020 ONSC 1124.
2. 2Jay Patry Enterprises Ltd. v. Municipal Property Assessment Corp., 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB).
3. 3Zarichansky v. Municipal Property Assessment Corp., 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB).