Z.C. v. City of Hamilton, 2021 CanLII 109051

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

October 29, 2021

FILE NO.:

WR 174094

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):

3451062

Taxation Year(s):

2020

Hearing Event No.:

752168

Legislative Authority:

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

Parties

Representative

Z.C.

E.C.

City of Hamilton

Linda Nimako

HEARD:

September 29, 2021 by telephone conference call

ADJUDICATOR(S):

Subuola Awoleri, Member

DECISION

OVERVIEW

1Z.C. (the “Applicant”) filed an application to the City of Hamilton (the “City”) to have her 2020 property taxes reduced, cancelled or refunded because she was unable to pay these taxes due to either sickness or extreme poverty under section 357(1)(d.1) of the Municipal Act, S.O. 2001, c. 25. The City passed a by-law delegating its authority to determine such applications to the Assessment Review Board (the “Board”).

2The Subject Property is a single-family detached house built in 2007. It has four bedrooms, two full bathrooms one half bath and an attached garage. The property taxes levied on the Subject Property in the 2020 taxation year was $5,443.84 and the Applicant is requesting a cancellation of this amount.

3At the completion of the hearing, the Board reserved its decision.

ISSUE

4The Board must determine if all or part of the Applicant’s 2020 property taxes should be cancelled as a result of the Applicant’s inability to pay due to sickness or extreme poverty. In order to make this determination, the Board must determine:

a) if the Applicant was unable to pay all or part of her property taxes;

b) if the Board finds that she was unable to pay all or part of her property taxes, the Board must determine if the inability to pay was due to either sickness or extreme poverty.

Result

5The Board finds that the Applicant was unable to pay the amount of $5,072.93, being part of her 2020 property taxes, due to sickness. The Applicant’s total 2020 property taxes is reduced by $5,072.93.

ANALYSIS

Ability to Pay

6A determination by the Board of the Applicant’s ability to pay her property taxes requires a contextual analysis of the Applicant’s income and expenses and an examination of all financial resources available to her in 2020. This will be used to determine if she could have mitigated her property tax obligation.

7There were four adults residing in the Subject Property in 2020, including the Applicant. The three other adults are the Applicant’s divorced spouse E.C., and their two adult children J.C., (who suffers from various illnesses), and Z.C., (the “second adult Child”) a full-time university student. They all contribute to the household income and expenses.

Income

8The Ontario Disability Support Program (“ODSP”) is the primary source of income for the Applicant, E.C., and J.C. Z.C. (the second adult child) had a part-time job in 2020. He also received the Ontario Student Assistance Program (“OSAP”) funds from the Ontario government, which he used to pay his tuition and he received grants from the university. The total undisputed household monthly income for 2020 was $4,874.29.

Expenses

9The Applicant’s undisputed monthly household expenses in 2020 was $4,801.05. When subtracting the total monthly income from the monthly expenses, the net household income is $73.24.

Assets and Liabilities

10The City testified that the current value assessment of the Subject Property provided by Municipal Property Assessment Corporation (“MPAC”) is $458,000. The Applicant did not dispute this value. The City argued that the balances in the Applicant, E.C. and the second adult’s son’s bank accounts in December 2020 should be included as part of the Applicant’s asset, as these balances could have been used to pay her property taxes. The Applicant disagreed with the City. The Applicant argued that the only reason there were balances in her and E.C.’s accounts was because the ODSP funds were usually deposited a month in advance, on the last day of the month and the payments were used for household expenses in the next month. Therefore, the Applicant submitted that the bank balances are not surpluses and should not be included as part of her asset. The City did not contest this evidence.

11In A.P. v. Toronto (City), [2018] O.A.R.B.D. No. 150 at paragraph 24, the applicant had a surplus each month excluding three months and a surplus at the end of the year under review as revealed in his bank statements. The Board determined that the applicant could have leveraged on his closing balance to pay his monthly property taxes.

12In this Application, the Board reviewed all the bank accounts of the four adults residing in the Subject Property and finds on factual grounds that this case is distinguishable from the facts in A.P. v. Toronto (City) supra. The Board first considered the bank accounts of the two parents and J.C., and then the second adult son’s bank accounts.

The Applicant’s, E.C.’s, and J.C.’s Bank Accounts

13The Applicant has two bank accounts, a chequing and savings account. The Applicant deposits J.C.’s ODSP cheques into her savings account, while E.C.’s ODSP funds are directly deposited into his personal chequing account.

14The Board finds that it would be unreasonable to apply the bank balances in the Applicant and E.C.’s chequing accounts including Z.C., the second adult son’s accounts towards the Applicant’s 2020 costs. The ODSP funds were deposited into the Applicant and E.C.’s account a month in advance, on the last day of the month, which were used for the household expenses in the following month. The balances in the Applicant and E.C.’s chequing account for the month of December before the ODSP funds were deposited were extremely minimal. The balances in the second adult son’s accounts will be discussed further in this Decision.

15The Applicant’s savings account was used primarily to make the mortgage payments. At the end of December 2020, after the mortgage payment for that month, the account had a balance of $297.67. The Board finds that this amount should be added to the Applicant’s asset, as it could have been used to pay part of her 2020 property taxes.

Z.C.’s (the second adult child) Bank Account Balances

16The second adult child had two bank accounts, a chequing and savings account. He used the chequing account for daily expenses and deposits money from the chequing account into the savings account. The income he earned from his part-time employment in the amount of $119.33 monthly was added to the household income and his expenses were deducted from it. The OSAP funds and grants he received from the university were also directly deposited by the Ontario government and the university into his chequing account.

17The City argued that the end of year balances in his accounts, which is a total of $8,763.54, should be added to the Applicant’s assets and should have been used to mitigate the Applicant’s property tax obligation. This amount consists primarily of his OSAP funding and grants from the university. The Board determines that the balances in these two accounts should not be added to the Applicant’s assets. The OSAP funding is a student loan, a debt to be paid back to the Ontario government. Any grant received by a student are to be used by the student for educational related expenses. Universities usually award grants to eligible students for diverse reasons, such as community involvement, excellence, financial need, academic achievement etc. The Board finds that the reasonable application of these grants is for educational related activities and not for the payment of the second adult son’s parents property taxes.

18The Applicant’s financial statement is summarized in Table 1 below:

Table 1

Income

$4,874.29

Expenses

$4,801.05

Net Income

$73.24

Assets/Liabilities

Amount ($)

Assets

Home (Assessed Value from MPAC)

458,000

Bank Account Balance (Applicant’s Savings Acct.)

297.67

Total Asset

458,297.67

Liabilities

Mortgage

220,000.00

Student Loan

8,282.00

Line of Credit (“LOC”)

35,000.00

Applicant’s personal debt

275.00

E.C.’s Personal & Business Debts

MBNA

40,735.68

CIBC LOC

71,638.00

Wells Fargo

45,000.00

RBC Visa

60,000.00

RBC Business LOC

11,000.00

Total Liabilities

491,930.68

Net Asset (Total Assets Less Liabilities)

(-33,633.01)

19The City submitted that E.C. did not provide an updated record of his debts. E.C. provided demand letters from some lending institutions addressed to him in 2017. He testified that nothing has changed since 2017 and he has not repaid the debts. He further testified that due to his sickness his business was dissolved, and he was in a lot of debt, which he is still unable to repay. E.C.’s 2020 documentation (including evidence of his 2020 receipt of ODSP) is consistent with his testimony and there was no evidence before the Board which indicated that his financial position had changed. Furthermore, E.C.’s medical documentation indicates that he stopped working in 2012 due to his disability. Therefore, the Board finds it likely that E.C.’s personal and business debts are accurately reflected in Table 1 above.

20The Board finds that the Applicant was unable to pay part of the property taxes levied on the Subject Property in the amount of $5,072.93. The Applicant could have only paid $370.91 (being the monthly net income of $73.24 and the balance in the Applicant’s savings account in the amount of $297.67) out of $5,443.84 levied on the Subject Property.

Issue 2: Was the Inability to Pay Due to Either Sickness or Extreme Poverty?

21The City did not contest that the Applicant, E.C., and J.C. all have sicknesses. The attending physician statements for these individuals indicates that the Applicant and E.C. will not be able to return to work due to their sickness. Their source of income is essentially limited to ODSP. The Applicant testified that J.C. also suffers from various illnesses. The City did not contest this evidence.

22The Board determines that the Applicant’s inability to pay part of the property taxes was due to the Applicant’s sickness and the sickness of the two adults (E.C. and J.C.) residing in the Subject Property.

CONCLUSION

23The Board determines that the Applicant was unable to pay part of her 2020 property taxes due to sickness.

ORDER

24The Board reduces the Applicant’s property tax payment for the 2020 taxation year by $5,072.93.