Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
May 11, 2021
FILE NO.:
DM 2021M03A
AMENDED MOTION DECISION ISSUED:
May 12, 2021
Assessed Person(s):
LPF Realty Retail Inc.
Respondent(s):
Municipal Property Assessment Corporation Region 19
Respondent(s):
City of Hamilton
Property Location(s):
1428 Upper James Street
Municipality(ies):
City of Hamilton
Roll Number(s):
2518-080-951-04760-0000
Taxation Year(s):
2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015
Hearing Event No.:
741175
Legislative Authority:
Section 40.1 of the Assessment Act, R.S.O. 1990, c. A.31
Parties
Counsel*/Representative
LPF Realty Retail Inc.
D. Fleet*
Municipal Property Assessment Corporation
No submissions received
City of Hamilton
No submissions received
REQUEST FOR:
Extension of time to bring appeals
HEARD:
February 24, 2021 in writing
ADJUDICATOR(S):
Carly Stringer, Member
AMENDED MOTION DECISION
AMENDED MOTION DECISION
In accordance with Rule 99 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1 2021, related to the correction of minor errors and in accordance with Rule 21.1 of the Statutory Powers and Procedure Act regarding the correction of errors, this Amended Motion Decision is issued to correct error(s) in the Motion Decision regarding D. Fleet as the Counsel for LPF Realty Retail Inc. The amendments have been underlined for ease of reference. There are no other changes in this Amended.
OVERVIEW
1The Moving Party, LPF Realty Retail Inc., brings this motion before the Assessment Review Board (the “Board”) pursuant to s. 40.1(b) of the Assessment Act R.S.O. 1990, c.A.31 (the “Act”) for an extension of time for bringing assessment appeals relating to 1428 Upper James Street in the City of Hamilton (the “Subject Property”) for each taxation year from 2005 to 2015, inclusive. The Moving Party also requests an order directing the Municipal Property Assessment Corporation (“MPAC”) to be the appellant for each appeal.
2Neither MPAC nor the City of Hamilton (the “City”) has filed material pertaining to this motion. The Moving Party advises the Board that MPAC and the City consent.
Background
3Some background is needed to contextualize this motion.
4The Moving Party purchased the Subject Property on April 2, 2001. At the time, the Subject Property was composed of approximately 0.32 acres of land improved by a former residential structure converted for use as a medical office.
5The Subject Property is located immediately adjacent to another property the Moving Party has owned since 1993 (the “Plaza Property”). At the time the Subject Property was purchased, the Plaza Property was composed of approximately 9.17 acres of land improved by a one-storey retail building used as a multi-tenanted retail plaza.
6As of the Moving Party’s acquisition of the Subject Property, ownership of the Subject Property and the Plaza Property merged in title. The Moving Party has not provided evidence or submissions regarding the nature of that merger, other than to state that it occurred.
7The Moving Party has not provided evidence or submissions regarding whether or when MPAC was notified that a merger on title of ownership occurred. There is no evidence that either the Land Title Registry Office or the Moving Party took any steps to ensure the merger on title was brought to MPAC’s attention. What is clear is that MPAC did not consolidate the Subject Property and the Plaza Property into a single assessment roll number. MPAC continued to assess the Subject Property and the Plaza Property as separate parcels with separate assessment roll numbers.
8In or around 2003 to 2004, the residence-turned-office on the Subject Property was demolished. Constructed in its place on the Subject Property was a standalone retail building designed and constructed specifically for use as a Kentucky Fried Chicken fast food restaurant (“KFC Building”). The KFC Building commenced to be used as part of the multi-tenant retail plaza already in operation at the Plaza Property.
9For all practical purposes, there is a single, multi-tenanted retail plaza functioning at a single site composed collectively of the Subject Property and the Plaza Property for which ownership merged in title as of the Moving Party acquiring the Subject Property.
10A review of the assessments revealed that for each taxation year from 2005 to 2019, both the Subject Property and the Plaza Property were separately assessed by MPAC with the value of the KFC Building included in both assessments. The resulting annual property taxes were levied on the Moving Party.
11The parties have resolved their dispute relating to the 2016 to 2019 taxation years, and MPAC has deleted the Subject Property’s historically assigned assessment roll number from the roll for the 2020 taxation year. The Moving Party seeks relief from the Board relating to the 2005 to 2015 taxation years.
Issues for the Written Hearing
12There are two issues to be determined in this motion:
a. Are there palpable errors in the assessment roll relating to the Subject Property?
b. If the answer to (a) above is “yes”, should the Board extend time for bringing appeals relating to the Subject Property for the taxation years 2005 to 2015, and order that MPAC be an appellant?
Result
13For the reasons that follow, the Board grants the Moving Party’s motion. The Board finds there are palpable errors in the assessment roll for the taxation years in question. The Board exercises its discretion to extend time for bringing appeals for the 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015 taxation years, and directs that MPAC be an appellant.
ANALYSIS
Issue 1 - Are there palpable errors in the assessment roll relating to the Subject Property?
The Applicable Legal Test
14The applicable statutory framework is set out in subsection 40.1(b) of the Act, as follows:
40.1 If it appears that there are palpable errors in the assessment roll,
(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing the appeals and direct the assessment corporation to be the appellant.
15Although the Act does not explain how to determine if an error meets the threshold of being “palpable”, the Board’s jurisprudence clarifies what ought to be considered. In determining whether a palpable error exists on the roll, the Board should first ask whether the error is inadvertent and unintentional. Then, the Board should consider whether the error is, in fact, “palpable,” meaning of conspicuous magnitude: plain, evident, and easy to understand: York Condominium Corporation No. 60 v Municipal Property Assessment Corporation, Region 09, 2019 CanLII 39632 (ON ARB) (“York Condominium”) at paragraphs 9 and 11. The Board may look at errors that are not on the face of the roll, including factual errors behind the roll and valuation errors: Janovjak v Municipal Property Assessment Corporation, Region 15, 2020 CanLII 24884 (ON ARB) (“Janovjak”) at paragraph 14.
Submissions
16MPAC and the City have consented to the relief sought. Accordingly, there are no submissions arguing against a palpable error in this case.
17The Moving Party submits it is plain and obvious on examination of the bases for assessment for each of the Subject Property and the Plaza Property for the relevant taxation years that the assessments for both properties include the KFC Building. The Moving Party submits that this is double assessment, and the Board has held that double assessment constitutes a palpable error: see Municipal Property Assessment Corporation, Region 09 v 153598 Canada Inc., 2017 CanLII 31049 (ON ARB) at paragraph 11 and Municipal Property Assessment Corporation v Tait, 2018 CanLII 107725 (ON ARB) (“Tait”).
Findings on Issue 1
18The Board finds the errors in this case to be “palpable.”
19In this case, the KFC Building was fully assessed on both the Subject Property and the Plaza Property. The evidence suggests this was an inadvertent and unintentional error on MPAC’s part. Further, this is an error of conspicuous magnitude. There is only one KFC Building. Assessing it on both the Subject Property and the Plaza Property is an error that is plain, obvious, and easy to understand.
20Accordingly, the Board finds there are palpable errors in the roll for the 2005 to 2015 taxation years.
Issue 2 – Should the Board extend time for bringing appeals?
The Applicable Legal Test
21It is not enough that there appears to be a palpable error in the assessment roll. The power to reopen the roll to correct a palpable error is ultimately discretionary, and the Board has consistently held that this relief is extraordinary, to be used sparingly and only “in the clearest of cases”: Hopper v Municipal Property Assessment Corporation, Region 15, 2016 CanLII 24421 (ON ARB) at paragraph 13; York Condominium, supra at paragraph 10.
22The rationale behind this sparing exercise of discretion is that the Act balances two competing interests: equitable distribution of the tax burden and fairness to the taxpayer: Janovjak, supra at 18. The balance is achieved through a mechanism to correct the assessment roll but limiting the timeframe in which to do so: Toronto (City) v. Wolf, 2008 CanLII 39430 (ON SCDC) at paragraph 20. Disrupting that balance by exercising discretion to extend the otherwise firm limitation period in the Act should therefore only be done “…where denying relief would be ‘unreasonable, unfair and highly prejudicial’ ”: Tait, supra at paragraph 6; York Condominium, supra at paragraph 6.
Submissions
23MPAC and the City have consented to the relief sought. Accordingly, there are no submissions arguing against the Board exercising its discretion to extend time in this instance.
24The Moving Party submits that double assessment of the KFC Building, and the associated double taxation as a result of that double assessment, is unreasonable, unfair and prejudicial to it as a taxpayer. The Moving Party further submits that when there has been double taxation, the creation of an assessment appeal is really of no prejudice to the municipality. Accordingly, argues the Moving Party, the balance of prejudice favours granting the extension of time.
Findings on Issue 2
25The Board will exercise its discretion to grant the extension of time for the following reasons:
a. The undisputed evidence before the Board is that the Moving Party undertook “repeated” and “extensive” inquiries and reviews of archival assessment records from both MPAC and the City, and the nature of the error in this case was not confirmed until an email from MPAC dated April 21, 2020. The Moving Party brought this motion in a timely way following that confirmation. In this respect, the facts of this case can be distinguished from the circumstances in York Condominium, supra at paragraph 23, where the Board held that simple inadvertence was not enough to justify the exercise of discretion.
b. There is evidence of prejudice to the Moving Party. Assessing both properties with the KFC Building value included on each has significantly increased the taxes the Moving Party has paid. The evidence is the Moving Party anticipates tax refunds or credits in the amount of $276,521.28. Although palpable errors that result in higher taxes are always prejudicial to taxpayers, financial consequences to a taxpayer are a consideration in balancing prejudice: York Condominium, supra at paragraph 22; Municipal Property Assessment Corporation, Region 05 v Scrymgeour, 2018 CanLII 102695 (ON ARB) at paragraph 12.
c. Both MPAC and the City have consented to the relief sought. This is notable for two reasons. One, it may distinguish this case from others. Two, there is undisputed evidence that the City is aware of the significant tax relief to be afforded to the Moving Party, if this motion is successful. Although the Board does not accept the Moving Party’s submission that there can be no prejudice to a municipality where double taxation has occurred, it is relevant in this case that the City has explicitly avoided advancing a claim of prejudice.
26Considering all of the circumstances of this specific motion, the balance of prejudice favours granting the extension of time. It would be unfair, unreasonable, and highly prejudicial to the Moving Party to refuse relief in these circumstances. However, if any of these factors had been different, and in particular if either MPAC or the City had not consented to the relief, or had disputed the Moving Party’s evidence, the Board’s decision in this case may well have been different.
ORDER
27The Board extends the time for filing appeals for the Subject Property for the 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015 taxation years. The Board orders such appeals be created and orders MPAC to be the appellant for each appeal.
"Carly Stringer"
CARLY STRINGER
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
Telephone: 416-212-6349 Toll Free: 1-866-448-2248
"Carly Stringer"
CARLY STRINGER
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
Telephone: 416-212-6349 Toll Free: 1-866-448-2248