Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 16, 2021

FILE NO.: RD 21-008

Assessed Person(s): Angelo Baratta and Raffaela Baratta

Appellant(s): Angelo Baratta and Raffaela Baratta

Respondent(s): Municipal Property Assessment Corporation Region 15

Respondent(s): City of Mississauga

Property Location(s): 1111 Rowan Court

Municipality(ies): City of Mississauga

Roll Number(s): 2105-030-092-76104-0000

Appeal Number(s): 3393072 and 3405214

Taxation Year(s): 2019 and 2020

Legislative Authority: Rules 101-103 of the Assessment Review Board’s Rules of Practice and Procedure

APPEARANCES:

Parties

Representative

Angelo Baratta and Raffaela Baratta

Self-represented

Municipal Property Assessment Corporation

Submissions not received

City of Mississauga

Submissions not received

REQUEST FOR: A review of the Board’s Decision WR 166898 issued on December 24, 2020

HEARD: In writing

ADJUDICATOR(S): Carly Stringer, Member

DECISION

OVERVIEW

Background

1Angelo Baratta and Raffaela Baratta (the “Requestors”) request a review of the Assessment Review Board’s (“Board”) Decision WR 166898 issued on December 24, 2020 (the “Decision”).

2The Requestor is the assessed owner of 1111 Rowan Court in Mississauga, Ontario (the “Subject Property”). The Requestor appealed against a supplementary assessment for the 2019 taxation year arising out of alterations to the Subject Property. A further appeal for the 2020 taxation year was deemed pursuant to s. 40 of the Assessment Act R.S.O. 1990, c. A.31 (the “Act”). The 2016 base year assessment for the Subject Property was $803,000. The supplementary assessment added $61,000, resulting in a total of $864,000 for the 2019 tax year assessment.

3The Board convened a hearing of the Requestors’ appeals on November 4, 2020. At the hearing, the Municipal Property Assessment Corporation (“MPAC”) presented evidence of six proposed comparable properties that were sold within seven months of the valuation day and within one kilometre of the Subject Property. Of those six comparable sales, three sales had no modifications since initial construction and were deemed by MPAC’s expert to be inferior to the Subject Property. The three remaining sales were, in the opinion of MPAC’s expert, similar in value to the Subject Property because they had modifications. MPAC’s expert calculated the time-adjusted median price per square foot of the building areas of these three sales of “modified” properties, and applied this value to the total building area of the Subject Property to produce an indication of value of $870,609. MPAC’s expert opined that this approach supported the supplemental assessment of $864,000. MPAC’s expert also opined that the alterations performed at the Subject Property had improved its effective age from its actual construction year of 1983 to an effective year built of 2001.

4The Requestors testified at the hearing that the 2019 alterations to the Subject Property included a new kitchen window, the opening of a load bearing wall, new kitchen cabinets and other kitchen work. The Requestors testified that the alterations cost approximately $47,000. The Requestors presented evidence of the assessment values of properties comparable to the Subject Property but did not present evidence of comparable property sales as of the valuation day.

5The Board issued the Decision on December 24, 2020. The Board found the correct current value of the Subject Property, as altered in 2019, was $850,000. The Board found that MPAC did not submit evidence to describe either the nature of the “modifications” to its three proposed comparable sales, or to demonstrate how the Subject Property’s alterations improved the structure from a year built of 1983 to an effective year built of 2001. Overall, the Board found the evidence presented by MPAC was insufficient to permit the Board to determine whether its proposed comparable sales were in fact inferior, similar or superior to the Subject Property, and the evidence was insufficient for the Board to conclude that the alterations rendered the effective year built 2001. The Board gave no weight to MPAC’s proposed comparable property sales evidence.

6Because the Board gave no weight to MPAC’s evidence and because the Requestors had presented no sales evidence, the Board found that the best evidence of the value added by the alterations is the cost of the alterations given in evidence by the Requestors, being $47,000.

7Finally, the Board found there was no evidence of inequity and made no equitable adjustment pursuant to s. 44(3) of the Act. The Board reduced the assessment from $864,000 to $850,000 for the 2019 and 2020 taxation years, reflecting that the alterations increased the value of the property by $47,000 from the prior assessment of $803,000.

8The Requestors subsequently brought this Request to Review the Decision.

Issues for Review

9The Requestors gave two reasons that the Decision should be reviewed:

1. The Board violated the rules of natural justice or procedural fairness; and

2. The Board made an error in law or fact such that the Board would likely have reached a different decision.

10Specifically, the Requestors submit that:

a. The Board ought to have directed MPAC to reset the Effective Year Built back to 1983 from 2001;

b. The Board ought to have changed the assessment to the previous assessed value of $803,000 for January 1, 2016, since the burden of proof of the correctness of the assessment is on MPAC and MPAC failed to meet this burden; and

c. The Board should disregard the current value assessment of $850,000 from the Decision because it is based on a method that uses cost for establishing current value, and the cost method was introduced after the hearing, providing the Requestors with no opportunity to question or rebut.

Result

11The request for review is dismissed.

ANALYSIS

The Rules

12Rule 101(b) of the Board’s Rules of Practice and Procedure effective April 1, 2021 (the “Rules”) provides that “a party may request a review of any final decision or order of the Board by filing a request for review in writing no more than 30 days after the decision was issued, which shall include…the reasons for the request, addressing the factors set out in Rule 102.”

13Rule 102 provides that:

102. 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; or

(d) there is new evidence that could not have reasonably been obtained earlier and have affected the result.

Issue 1 – Effective Year Built

Submissions

14The Requestors submit there has been a violation of the rules of natural justice and procedural fairness, and the Board made an error in law or fact such that the Board would likely have reached a different decision. Specifically, the Requestors submit that the Board ought to have “[d]irect[ed] MPAC to reset Effective Year Built back to 1983 from 2001.” The Requestors submit that leaving the effective year built at 2001 instead of 1983 biases the current and all future assessments in an unfair way.

Findings on Issue 1

15The Board is not satisfied that the Decision discloses any violation of the rules of natural justice or procedural fairness, nor does is disclose an error in fact or law as it relates to the Effective Year Built.

16The Requestors do not dispute the Board’s finding that MPAC did not provide sufficient evidence to support a change in the Effective Year Built to 2001. Instead, the Requestors submit that the Board ought to have directed MPAC to “reset” the Effective Year Built “back to 1983.”

17The Requestors have provided no evidence that they requested this relief at the hearing, nor have the Requestors cited a statutory or other basis on which the Board could have provided this relief.

18The tasks of the Board at the hearing of the subject appeals was i) determine current value of the land, and ii) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land: see s. 44(3) of the Act. The Board performed those tasks, and issued an order reducing the current value in accordance with its decision. The Requestors have not satisfied the Board there is any basis on review to interfere with the Board’s order.

19Accordingly, the Board is not satisfied that the Decision discloses a violation of the rules natural justice or procedural fairness, or an error in law or fact, insofar as the Board did not “direct MPAC to reset Effective Year Built back to 1983 from 2001.”

Issue 2 – MPAC’s Burden of Proof

Submissions

20The Requestor submits it is clear from the Decision that the Board concluded that MPAC did not meet its burden of proof, and since the Requestors do not have the burden of proof as to correctness, MPAC’s supplementary assessment should be dismissed.

Findings on Issue 2

21The Board is not satisfied that the Decision discloses a violation of the rules of natural justice or procedural fairness, or an error of law or fact, in relation to the impact of MPAC’s failure to meet the burden of proof.

22The Divisional Court has been explicit that the Board cannot simply revert back to the last uncontested assessment if MPAC fails to meet its burden of proof: “…an assessment must be based on the current value of the property. The Board has no power to dodge [its] responsibility [to determine the current value] based on a finding that MPAC has not met its burden of proof”: see Municipal Property Assessment Corporation v. Zarichansky, 2020 ONSC 1124 (Div. Ct.) (“Zarichansky”) at paragraph 41.

23The Divisional Court has given guidance regarding what the Board should do if MPAC fails to meet its burden, confirming there may be cases in which the taxpayer’s evidence is sufficient to assess the current value of the property: see Zarichansky, supra at paragraph 44. That is precisely the approach taken by the Board in this case.

24The Board is not satisfied that the Decision discloses a violation of the rules natural justice or procedural fairness, or an error in law or fact, in relation to MPAC’s failure to meet the burden of proof.

Issue 3 – Cost of Alterations

Submissions

25The Requestors submit that the Board’s determination of current value of $850,000 was based on a method that uses cost, where such a method is not supported by legislation. The Requestors further submit this method was introduced after the hearing, providing the Requestors no opportunity to question or rebut. The Requestors submit the Decision still maintains most of MPAC’s increase, which feels like bias given the Board gave no weight to MPAC’s evidence.

26The Requestors further submit that the costs of alteration are irrelevant to establishing current value, particularly where the cost of $47,000 is a 2019 cost that was not time adjusted to 2016. The Requestors further submit that the $47,000 cost included various projects, including routine maintenance costs like painting and replacing fixtures, which do not increase property assessment. The Requestors submit that the Decision should have incorporated depreciation into the $47,000 costs, as depreciation is a matter of professional knowledge that does not require explicit proof. Finally, the Requestors submit that increasing the value by the full amount of the costs implies that their previous kitchen was worth zero.

Findings on Issue 3

27The Requestors have not satisfied the Board that the Decision discloses a violation of the rules of natural justice or procedural fairness, or that it contains any significant errors of law or fact such that the Board would likely have reached a different decision as it relates to the costs of alterations being used to determine current value, for the following reasons:

a. As outlined above in relation to Issue 2, the Board has a statutory duty to determine current value on the basis of the evidence before it. The Requestors provided evidence regarding the value of alterations, but provided no evidence of depreciation; no evidence of the value of their kitchen before the alterations; and no evidence of a time adjustment. The Board did not accept MPAC’s evidence. Ultimately, the Board made a determination on the best evidence presented by the parties.

b. The Assessment Act does not stipulate how the Board must determine current value. There are various recognized methodologies to value real property, including cost. There is no error associated with the Board taking this approach to determine the impact of alterations on the Subject Property’s current value.

c. The Requestors had a full and fair hearing on the merits, with ample opportunity to present evidence. Although neither party argued the Board should use the cost of alterations to determine current value, the Board is nevertheless tasked with determining current value on the basis of the best evidence presented by the parties at the hearing. It is not limited to choosing between the positions advocated by the parties.

CONCLUSION

28None of the complaints brought by the Requestors against the Decision are valid. The Board is not satisfied there was a violation of the rules of natural justice or procedural fairness, nor is it satisfied that the Decision contains any significant error of law or fact such that it would likely have reached a different decision pursuant to Rule 102 (a) and (b).

ORDER

29The Board orders that this request for review is dismissed.