Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 11, 2020

FILE NO.: DM 166901

Assessed Person(s): CP Reit Ontario Properties Limited

Appellant(s): Loblaw Properties Limited

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 985 Woodbine Avenue

Municipality(ies): City of Toronto

Roll Number(s): 1904-095-470-01700-0000

Appeal Number(s): 3412280, 3412281, 3412282, and 3412283

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

Hearing Event No.: 733294

Legislative Authority: Rule 173 of the Assessment Review Board’s Rules of Practice and Procedure

APPEARANCES:

Parties Loblaw Properties Limited Municipal Property Assessment Corporation City of Toronto

Counsel Steven Longo, Jamie G. Walker Karey Lunau, Calvin Ho No one appeared

HEARD: July 27, 2020 in writing

ADJUDICATOR(S): Dirk VanderBent, Vice-Chair

MOTION DECISION

OVERVIEW

1CP Reit Ontario Properties Limited is the owner of a property located at 985 Woodbine Avenue, Toronto (the “Subject Property”), which is comprised of a small grocery store and parking lot.

2Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, the Municipal Property Assessment Corporation (“MPAC”) is required to assess this value as of the Valuation Date, January 1, 2016. (“current value”).

3Loblaw Properties Limited (the “Appellant”) has filed an appeal for the 2017 taxation year, which now includes deemed appeals for 2018, 2019 and 2020, with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. These appeals are being heard by way of general proceeding.

4Earlier in this appeal proceeding, the Appellant sought to withdraw its appeals, as of right, pursuant to Rule 72 of the Board’s Rules of Practice and Procedure (“Rules”), on the basis that MPAC had failed to serve a Notice of Higher Assessment. In Loblaw Properties Limited v Municipal Property Assessment Corporation, Region 09, 2020 CanLII 30601 (Ont. ARB) (the “NOHA Motion Decision”), the Board found that MPAC had provided the required notice, and, consequently, the Appellant could not withdraw its appeals as of right. However, the Board also found that, pursuant to Rule 73, the Appellant was entitled to bring a motion for an Order granting its request to withdraw the appeals in which the Appellant could advance its submissions regarding the sufficiency of MPAC's pleadings in its Statement of Response.

5In overview, MPAC, in its Statement of Response, has taken the position that its returned assessment of the current value of the land is too low. MPAC indicates that its returned assessment was based on the assumption that the highest and best use of the land is its current use as grocery store. MPAC now asserts that its highest and best use is as development land, which would result in a significant increase in its current value. The Appellant disagrees and has now brought this motion requesting that it be allowed to withdraw its appeals. If permitted to do so, MPAC would no longer be able to proceed with its request that the current value of the land be based on its use as development land.

6MPAC opposes the Appellant’s request. The City of Toronto took no position on this motion.

Result

7The Appellant’s request to withdraw its appeals is denied.

ANALYSIS

Issues for the Motion Hearing

8In overview, the Appellant argues that it should be allowed to withdraw its appeals on two main grounds. First, the Appellant submits that MPAC's Statement of Response fails to meet the requirements of Rule 38(7), which states that the Statement of Response must contain:

(7) If the issue is a higher assessment than that returned by the MPAC:

(a) the basis on which a higher assessment is sought; and

(b) a list of all facts, legal grounds and documents that the party relies on in support of its position.

9Secondly, the Appellant argues that it will be prejudiced if the Board denies its request to withdraw the appeals. The Appellant maintains that the Board ought to question the legitimacy of MPAC employing the Board’s Rules to seek an increase an assessment that MPAC returned and certified to be correct, noting further that MPAC has several statutory avenues (such as s. 33 or 34 of the Act) to make any necessary amendments to its returned assessment while the appeals remained open.

10Therefore, there are two issues which the Board must address in this motion:

a. Does MPAC's Statement of Response fail to meet the requirements of Rule 38(7)?

b. Will the Appellant be prejudiced if the Board denies its request to withdraw its appeals?

Issue 1 - Does MPAC's Statement of Response fail to meet the requirements of Rule 38(7)?

MPAC's Statement of Response

11MPAC's Statement of Response asserts that the Subject Property is a part of a land assembly. It states that the Subject Property is zoned as Mixed Use in an area designated for growth, which permits a wide range of commercial, residential and institutional uses. The Statement of Response also states that the Subject Property lot size is 54,014 square feet (“sq. ft”).

12For development purposes, a municipality will specify the maximum allowable number of square feet of new development on a property site, which is expressed as a ratio, called a Floor Space Index (“FSI”). The FSI is the ratio of the total floor area of a building to the area of the property site. In this case, the Statement of Response states that the specified FSI is 3.0, which indicates that the total building area for the Subject Area which can built “as of right” is 162,042 sq. ft. (54,014 x 3.0). The Statement of Response states that the current building on the Subject Property represents only 9% of this gross floor area (“GFA”).

13The Statement of Response next points out that a development application was filed in March 2019 to develop the Subject Property and adjoining parcels, which includes a request to permit to increase the allowable “as of right” density, based on an FSI of 4.88.

14The Statement of Response summarizes the parties’ positions:

12. The value returned by MPAC for the Property for the 2016 CVA tax years is $9,708,000. This value is based on a rate/SF of lot of $180. Loblaw Properties appealed the assessment returned and seeks a decrease based on an "in use" value of $3,013,000.

13. MPAC takes the position that the Property should be valued on the basis of its development potential, not its current use value. The returned value of $9,708,000 is too low. The correct current value of the Property is $17,108,000 based on an estimate of development GFA of 263,588 SF (lot area of 54,014 SF x 4.88 FSI) multiplied by $65/SF.

15The Statement of Response attaches a comparable sales analysis in support of its assertion that the rate of $65 per square foot (“psf”) is “an appropriately conservative rate”.

Submissions

16The Appellant asserts that the Statement of Response does not set out with any sufficient particularity the basis for the increase being sought and fails to provide the Appellant with any meaningful understanding, or clear notice, that MPAC is taking the position that the assessment should be increased.

17The Appellant submits that MPAC’s Statement of Response does not refer to sale transactions. Instead, MPAC has focused on the re-zoning application, which is unapproved, and submitted three years after the January 1, 2016 valuation date. The Appellant maintains that MPAC has failed to explain how the unapproved re-zoning application is connected to, or results in, the proposed current value of $17,108,000.

18The Appellant submits that MPAC’s suggestion that the assessment should be increased by some 76% appears to be more of a “litigation tactic” than a fully analyzed and supported position. The Appellant also submits that the higher assessment sought by MPAC is an unsupported “opinion of value” in that it lacks a detailed explanation for how it was determined.

19The Appellant maintains that MPAC’s revised value of $17,108,000 is purely speculative as it is based on the existing site area multiplied by the currently unapproved density multiplied by a rate of $65/SF. The Appellant asserts that MPAC has not provided an explanation as to why this rate is “appropriately conservative” (whatever that means) or why MPAC’s analysis is based on sales which predate the necessary planning and development approvals (which have not yet occurred).

20In response, MPAC submits that Rule 38(7)(a) and (b) only require MPAC’s Statement of Response to contain the basis on which a higher assessment is sought, and the evidence and analysis used to support that value. MPAC asserts that the facts stated in its Statement of Response provide a clear ‘evidentiary pathway’ that supports its proposed value.

21Respecting the Appellant’s submission that its Statement of Response is non-compliant because certain facts on which MPAC relies on are irrelevant to the determination of the Subject Property’s correct 2016 current value assessment, (such as the development application which was submitted three years after the Valuation Date), MPAC submits that the question of relevancy is a matter of the weight the Board ought to place on MPAC’s evidence, which is a matter that should be dealt with at a hearing, not at a pre-hearing motion to withdraw. In support of this submission, MPAC relies on a decision of the Board in GlaxoSmithKline Inc. v. Municipal Property Assessment Corp. Region No. 15, [2011] O.A.R.B.D. No. 234 at para 43.

Findings on Issue 1

22In the course of its submissions, the Appellant asserts that MPAC's Statement of Response lacks particularity, which in turn leads the Appellant to submit that MPAC has not provided a proper actual notice of higher assessment. In addressing this submission, the Board notes that, in the NOHA Motion Decision, the Board has already ruled that adequate notice was given, so this submission has already been addressed.

23Regarding the issue whether MPAC's Statement of Response satisfies the requirements of Rule 38(7), the Board first observes that MPAC's Statement of Response provides a clear explanation of its position and provides the evidence and analysis on which it relies in support of its position. Rule 38(7) only addresses the information that a party must provide in its statement of response. By definition, it is one party’s pleading. The fact that the Appellant does not agree that this pleading has merit, does not, in and of itself, indicate that this pleading fails to adequately comply with the requirements of Rule 38(7). For these reasons, the Board finds that MPAC's Statement of Response does comply with the requirements of Rule 38(7). Consequently, the Board does not accept that the Appellant should be permitted to withdraw its appeal on the ground that MPAC's Statement of Response does not comply with the requirements of Rule 38(7).

Issue 2 - Will the Appellant be prejudiced if the Board denies its request to withdraw its appeals?

Submissions

24The Appellant submits that it will face significant prejudice if it is prohibited from withdrawing its appeals, arguing that MPAC has clearly failed to comply with Rule 38 and Rule 72 to provide full or adequate notice of its position on the issue of an increase of approximately 76% to the Subject Property’s assessment. The Appellant submits that MPAC's Statement of Response does not articulate even a prima facie position on the issue of highest and best use, lacks specificity, is entirely speculative and provides insufficient reasons to overturn the presumption that the Subject Property’s highest and best use is its current use.

25While the Appellant acknowledges that the Rules clearly contemplate the possibility of MPAC seeking an increase, the Appellant submits that the Board should ensure that this right is strictly reviewed, in order to balance this right against the increased cost of litigating such disputes where MPAC has the duty to prove the correctness of the assessment.

26The Appellant further submits that there is no prejudice to MPAC if the Appellant is permitted to withdraw its appeals, because MPAC did not originally rely on its statutory powers in the Act (such as s. 33 or 34), which allow MPAC to amend the returned assessment. The Appellant asserts that the Board ought to question the legitimacy of MPAC employing the Board’s Rules to increase an assessment that it has returned and certified to be correct, particularly when MPAC also had several statutory avenues to amend the returned assessment during the course of this appeal proceeding. The Appellant argues that the proposed 76% increase being advanced by MPAC should give the Board some pause to question whether the proposed correct current value is an actual appraisal of value or a litigation tactic.

27The Appellant also submits that, if the Board were to refuse its motion to withdraw its appeals under these circumstances, this may significantly prejudice other appellants, who have or will receive similarly vague Statements of Response that could be interpreted as providing insufficient notice of a party’s “position” that an assessment should be increased.

28The Appellant further argues that denying taxpayers the right to withdraw prior to a “hearing event” as defined in Rule 1 would also exacerbate the existing appeal backlog and inhibit the Board in achieving one of its stated goals of reducing the current appeal case load in an effective and efficient manner.

29In response, MPAC submits that it is a basic principle of litigation that pleadings are to be read generously, and that the standard to be met for striking pleadings prior to a proper hearing on the merits is whether it is plain, obvious and beyond a reasonable doubt that the party cannot succeed. In support of this submission MPAC relies on two Court decisions: Hollick v. Toronto (City), [2001] 3 SCR 158, 2001 SCC 68, [2001] 3 RCS 158, [2001] SCJ No 67, [2001] ACS No. 67 at para. 25; and Cloud v. Canada (Attorney General), 2004 CanLII 45444 (ON CA), [2004] O.J. No. 4924 C.A. at para. 41, leave to appeal to the S.C.C. ref'd, [2005] S.C.C.A. No. 50.

30MPAC also relies on Municipal Property Assessment Corp. v. TKS Holdings Inc., [2016] O.J. No. 4561 (Div. Ct.) (at para. 11) (“TKS Holdings”), pointing out that the Court has stated that a proper determination on the merits cannot constitute "prejudice" to an appellant. MPAC submits that it is not prohibited in leading evidence in support of its proposed current value. MPAC maintains that continuing this appeal proceeding just means that the Appellant “will have its day in court.” For this reason, MPAC submits that there is no prejudice to the Appellant in allowing this appeal proceeding to continue.

Findings on Issue 2

31The Board has already found that MPAC has provided adequate notice of its intention to seek a higher assessment and that its Statement of Response satisfies the requirements of Rule 38(7). Therefore, the Board finds no prejudice on these grounds.

32Rule 73 states:

An appellant may seek an order from the Board, by motion, to withdraw an appeal that is prohibited by Rule 72 and the Board may:

a. grant the request to withdraw, with or without conditions; or

b. refuse the request to withdraw and

i. proceed immediately to hear the appeal, or

ii. adjourn the proceeding.

The Board notes that Rule 73 does not provide any specific factors or criteria to be considered when adjudicating a motion to withdraw an appeal. Absent a failure to meet the requirements of Rule 38(7), the most likely source of prejudice to an Appellant would be where the Statement of Response provides no relevant evidence to support a respondent’s position. In such circumstances, the respondent’s case would be unfounded. Consequently, the prejudice is that the Appellant would be required to incur time and resources to continue the appeal proceeding where there is no case to be met.

33Accordingly, the Board, in this motion, must consider whether MPAC's case, as outlined in its Statement of Response, provides no relevant analysis and evidence in support of its position. In this regard, the Board notes that MPAC has raised a relevant issue of whether the highest and best use of the Subject Property is its current use, or alternatively, its use as development land. MPAC has provided its analysis in support of its position that the highest and best use is as development land and has also outlined its evidence in support of its determination of the current value of the property based on this use.

34The Appellant points out that, as part of MPAC's evidence, MPAC has referenced a development permit application which was submitted in 2019, three years after the valuation date of January 1, 2016. The parties obviously disagree as to the relevance or, alternatively, the weight to be given to this evidence, but this disagreement, in and of itself, does not establish that this evidence is irrelevant. On its face, this evidence may be relevant to the issue which MPAC has raised, namely, that the highest best use of the Subject Land as of the Valuation Date is as development land. Any determination regarding relevance and weight must be made at a hearing. Reviewing MPAC's analysis and evidence in its totality, the Board finds that it sets out a case which could be accepted at a hearing. For this reason, the Board finds that the Appellant has not established that it is plain and obvious that MPAC's case could not succeed at a hearing.

35The Board now turns to the Appellant’s observation that MPAC has chosen to advance an unfounded case as a litigation tactic. The Board has already rejected the Appellant’s submission that MPAC has advanced an unfounded case. A party has a right to present its case at a hearing. As stated in TKS Holdings, a proper determination on the merits of the assessed value of the property cannot constitute prejudice.

36The Board next addresses the Appellant’s assertion that the Board ought to question the legitimacy of MPAC employing the Board’s Rules to increase an assessment that it has returned and certified to be correct, particularly when MPAC also had several statutory avenues to amend the returned assessment during the course of this appeal proceeding. The Board first notes that the Appellant acknowledges that the Rules clearly contemplate the possibility of MPAC seeking an increase. The Board observes that s. 44(1) of the Act provides that, in an appeal, the Board “…may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made...”. Section 45 of the Act also provides that the Board “…may review the assessment and, for the purpose of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act …”. Therefore, in an appeal challenging MPAC's assessment, the Board may determine that the correct current value is either lower or higher than MPAC's assessed value, based on the evidence adduced. Consequently, MPAC is entitled to request a higher assessment in this appeal proceeding. There is no requirement that MPAC resort to other statutory avenues to amend its returned assessment.

37The Board now turns to the Appellant’s submission that refusing its motion will set a precedent where other appellants would be prejudiced by receiving similarly vague Statements of Response. In addressing this submission, the Board first notes that it has not found that MPAC's Statement of Response is vague. Secondly, the question of whether a Statement of Response fails to comply with Rule 38, or presents an unfounded case, must be determined based on the merits of each individual case. For these reasons, the Board does not accept this submission.

38Finally, the Appellant asserts that denying taxpayers the right to withdraw prior to a hearing, would exacerbate the Board’s existing appeal backlog, which, in turn, would negatively impact the timely resolution of appeal proceedings before the Board. The Board first notes that the Appellant has provided no evidence to suggest that the number of such cases would be significant. More importantly, a party is entitled to present its case at a hearing. Efficiency simply requires that all proceedings be heard on a timely basis. Therefore, the Board does not accept this submission.

39In summary, based on the above analysis and findings, the Board finds that the Appellant has not established that it would be prejudiced if the Board denies its request to withdraw its appeals.

CONCLUSION

40The Board finds that the Appellant has not established any grounds on which the Board can conclude that MPAC should not be permitted to proceed to a hearing to argue its case that a higher assessment is required. For this reason, the Appellant’s request to withdraw its appeals is denied.

ORDER

41The Appellant’s motion is dismissed.