Z.C. v. City of Hamilton, 2020 CanLII 87161

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

November 05, 2020

FILE NO.:

WR 166795

Assessed Person(s):

Z.C.

Appellant(s):

Z.C.

Respondent(s):

City of Hamilton

Property Location(s):

Address withheld

Municipality(ies):

City of Hamilton

Roll Number(s):

Roll number withheld

Appeal Number(s):

3416587

Taxation Year(s):

2019

Hearing Event No.:

733881

Legislative Authority:

Section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties

Representative

Z.C.

E.C.

City of Hamilton

Alexander Tyutyunnik and Linda Nimako

HEARD:

October 15, 2020 by telephone conference call

ADJUDICATOR(S):

Dan Weagant, Member

DECISION

OVERVIEW

1Z.C. (the “Applicant”) filed an application to the City of Hamilton (“City”) to have her 2019 property taxes reduced, cancelled or refunded because she was unable to pay due to either sickness or extreme poverty, under s. 357(1)(d1) of the Municipal Act, 2001, S.O. 2001, c. 25 as amended (“Act”).

2The City has passed a by-law, delegating its authority to determine such applications to the Assessment Review Board (the “Board”) under s. 357(11) of the Act.

Issues for the Hearing

3The issue before the Board is if the Applicant’s 2019 property taxes should be cancelled, reduced or refunded because of her inability to pay for the reason of sickness or extreme poverty. For this application, the Board is required to determine:

1. the correct family income in 2019;

2. if the Applicant was able to pay the property taxes levied in 2019;

3. if the Board determines the Applicant was unable to pay the taxes levied in 2019, the Board must then decide if the reason for the inability to pay was either sickness or extreme poverty.

4. if the board determines that she was unable to pay because of sickness or extreme poverty, the Board must then decide on the amount of the taxes levied to be cancelled, reduced or refunded.

Result

4The Board finds that the Applicant was unable to pay the full property taxes levied in 2019 because of sickness. The property taxes levied for 2019 are therefore reduced from $5,272.29 to $2,326.

5Z.C. was represented in this hearing by E.C., who was also a resident of the subject property in 2019. Both Z.C. and E.C. testified at the hearing. Throughout this decision the two of them are jointly referred to as the ‘Applicants”.

6The Applicants and their two children lived at the subject property in 2019. Their youngest was a full-time university student in 2019. Their eldest, aged 21, lived at home for the entire year. He has a condition that does not allow him to be alone at any time.

Issue 1 - What was the correct income for the household in 2019?

7The Applicants reported a total annual family income for 2019 of $53,949. This amount was disputed by the City. By its reckoning the actual income for the family in 2019 was $56,982.

8In order to determine the family income for 2019, the Board considered the bank record evidence submitted by the Applicants. There were three bank accounts used by the family in 2019. Each bank account record showed deposits made, either by direct deposit from government agencies or other deposits that were determined through testimony at the hearing to be additional income from other sources. The total income indicated by the bank records is $55,246.69. The Board finds this to be the correct family income for 2019.

Issue 2 - Were the Applicants able to pay the taxes levied in 2019?

9The family income for 2019 amounted to a monthly average of $4,603 (rounded to the nearest dollar). This income was made up of Ontario Disability Support Payments and Federal and Provincial tax credits.

10Of the three bank accounts in evidence, one is a current account where money is transferred in monthly to cover a single debit each month for the mortgage payment. The balance on this account at the beginning and end of 2019 was essentially zero. The second is Z.C.’s account that started the year with a balance of $1,362 and ended 2019 with a balance of $809. The third is E.C.’s account that started the year with a balance of $877 and ended 2019 with a balance of $1,517.

11In 2019, the subject property had an assessed value of $458,000 with $222,964 in principal yet to be paid on the mortgage. The family has one car: an older model Toyota Matrix that meets the family’s transportation needs and those of their younger son who needed to travel to university in 2019.

12Monthly expenses reported by the Applicants for 2019 totaled approximately $4,269 per month. These expenses are summarized as follows (all rounded to the nearest dollar):

• Mortgage payments: $1,149

• House and auto Insurance: $372

• Groceries: $1,035

• Household supplies and expenses (including veterinary services): $235

• Fast Food purchases: $406

• Pharmacy, medical costs not covered by support programs: $202

• Utilities (heat, hydro water and sewer): $289

• Car expenses: $255

• Cell phone: $64

• Home phone, cable and internet: $95

• Property tax arrears from previous years (in addition to taxes paid through Mortgage) - $167

13The Applicants testified extensively about the impact of having their eldest son at home. His condition did not allow him to leave the house in 2019. He required care 24 hours a day, throughout the year. His dietary requirements are extensive and relate to nutritional content and frequency of meals. In order to reduce the number of behavioral events related to his condition, the Applicants strive to keep him busy with activities which involve on-line gaming and game platforms that work with the family’s television.

14The Applicants produced documents from physicians, indicating that because of the family members’ respective conditions, they were not expected to be able to work outside of the home in 2019, or in the future.

15The City did not refute the Applicants’ testimony regarding the medical conditions experienced by the family. The City had questions about the extensive use of fast food outlets throughout the year, citing previous cases that had been decided by the Board where fast food was considered a discretionary expense, and not an expense that should be considered necessary to meet the basics of life.

16To support its position with respect to reasonable food expenses for the family in 2019, the City submitted a document issue by its Healthy and Safe Communities Department that sets out the cost of a ‘nutritious food basket’ in 2019 for various categories of individuals and families. For this family, the City submitted a nutritious food basket would cost $972 per month.

17The City submitted that the Applicants were subject to a tax arrears payment plan and confirmed the amount of arrears. The Applicants paid a total of $5,756 in property tax arrears, $2,000 of which was paid in five $400 installments. The remaining $3,756 was paid by the mortgage company, on the Applicants’ behalf. The net result of these payments was a balance on December 31, 2019 of the property taxes levied for the current year plus interest and penalties accruing in 2019. The property taxes levied in 2019 totaled $5,272.37.

18The Applicants’ monthly income exceeds the monthly living expenses by approximately $334 per month. This difference accounts for the fast food expenses reflected in the Applicants’ bank records and testimony. The City considers this fast food expense as ‘discretionary’ spending and submitted that it should not be considered as part of the monthly expenses for necessities. The Board views the consideration of discretionary expenses in the context of the entire application and the circumstances of the family involved.

19In 2019, this family was caring for a disabled, adult son with severe behavioral issues. The Board heard that the purchase of fast food is a coping mechanism that is intended to quell their son’s escalation of negative behavior. The Applicants’ have their own health issues to endure, making the regular preparation of meals difficult and sometimes impossible. Their son’s demands to be fed occur at all hours of the day. They testified that they were not able to modify his behavior in any other way, as their abilities in this area are limited. In this context, the Board finds that these expenses are necessary, for this household, in 2019.

20E.C. also testified that he had expenses, not backed up by receipts, for medications he requires for pain management. The City did not take issue with this testimony.

21The Board finds that the Applicants’ total bank account balances on December 31, 2019 of $2,326 represents the best evidence of the amount available for 2019 property tax payments, after all necessary expenses were paid.

22Accordingly, and on the basis of the financial evidence submitted, the Board finds that the Applicants were not able to pay all of their property taxes in 2018.

Issue 3 – Why were the Applicants unable to pay their property taxes in 2018?

23The single circumstance that led to the Applicants’ inability to pay property taxes in 2018 was the sickness suffered by three of the four members of the household. The City did not dispute that the Applicants suffer from multiple conditions that, according to their physician, make it impossible to work. Added to that challenge is the sickness afflicting their eldest son, who relies entirely on the caregiving of his parents and his younger brother.

24For that reason, the Board finds that the Applicant was unable to pay all of her 2019 property taxes because of sickness.

Issue 4 - What is the amount of the taxes to be reduced, refunded or cancelled?

25The property taxes levied in 2019 were $5,272.29. After accounting for the bank balances at the end of the year of $2,326, the amount that the Applicant was unable to pay is $2,946.29.

ORDER

26The Board orders that the property tax levy in 2019 is reduced from $5,272.29 to $2,326.