Mieszkowska v. Municipal Property Assessment Corporation Region 15, 2021 CanLII 44150

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

May 21, 2021

FILE NO.:

WR 169092

Assessed Person(s):

Urszula Mieszkowska and Michael Mieszkowska

Appellant(s):

Urszula Mieszkowska

Respondent(s):

Municipal Property Assessment Corporation Region 15

Respondent(s):

Town of Milton

Property Location(s):

1070 Easterbrook Crescent

Municipality(ies):

Town of Milton

Roll Number(s):

2409-090-100-17242-0000

Appeal Number(s):

3417027 and 3445907

Taxation Year(s):

2020 and 2021

Hearing Event No.

739265

Legislative Authority:

Section 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties

Representative

Urszula Mieszkowska

Robert Baranowski

Municipal Property Assessment Corporation

Marissa Cheddi

Town of Milton

Steven Radenic

HEARD:

March 8, 2021 by telephone conference call

ADJUDICATOR(S):

Subuola Awoleri, Member

DECISION

OVERVIEW

1Urszula Mieszkowska, (the “Appellant”), the owner of 1070 Easterbrook Crescent (the “Subject Property”), appealed the 2020 assessment of the Subject Property to the Assessment Review Board (the “Board”) under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on the ground that the assessment is too high. Pursuant to s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal in respect of the 2021 taxation year. The Appellant argued that the current value of the Subject Property should be the assessed value of $636,000, with a further equity reduction for an equitable value of $591,480.

2The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $636,000 for the 2020 taxation year. MPAC submitted that the current value assessment (“CVA”) of the Subject Property is $696,000; however, MPAC acknowledged that it did not serve the Appellant with a notice of increase in assessment pursuant to Rule 40 (b) of the Board’s Rules of Practice and Procedure (the former Rules Effective April 1, 2017 and Amended May 2019) , therefore, MPAC requests that the Board confirms the CVA as returned at $636,000, without any reduction for equity.

3The Town of Milton (the “Town”), a statutory party to this appeal also requests that the Board confirms the CVA as returned for the 2020 taxation year, without any reduction for equity.

4At the completion of the hearing, the Board reserved its Decision.

Issues for the Hearing

5The issues to be determined are:

Should the Board find inadmissible, MPAC’s evidence of “opinion” of value given by a non-expert witness?
What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?
Should there be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what should the amount of this reduction be?

6In addition to these issues, the Appellant also asked the Board to determine whether MPAC has a right to "appeal” its own assessment. However, given that MPAC is not seeking an increase in the assessment of the Subject Property, a determination on this issue is not necessary.

Result

7The Board determines that MPAC’s evidence of opinion of value from a non-expert witness is admissible. The Board has the discretion to determine the appropriate weight to attach to this evidence.

8The evidence indicates a current value of the Subject Property at $672,000, higher than the assessment returned at $636,000. MPAC has not served a notice of increase in assessment and its position is that the assessed value of $636,000 should be confirmed. The Board finds that the current value is $636,000 for the 2020 and 2021 taxation years.

9The Board finds that there should be no adjustment in the determined current value in order to make it equitable with the assessment of similar properties in the vicinity.

PRELIMINARY ISSUE

10At the commencement of the hearing, Robert Baranowski, the Appellant’s representative advised the Board that the Appellant consents to the CVA of the Subject Property at $636,000 as returned. MPAC and the Town also accepted the Appellant’s consent.

11Mr. Baranowski later stated that since the parties have a consent on the CVA, the only issue will be the equity reduction.

12MPAC and the Town argued that they consented to the CVA as returned with the understanding that the appeals have been resolved, and there would be no need for a hearing. They submitted that due to the Appellant’s submission that the CVA requires a further equity reduction, the appeals are not resolved, and they will proceed with the hearing.

13The Board ruled that the consent of the parties did not dispose of the appeals. Mr. Baranowski did not provide MPAC and the Town with the complete proposed terms of the Appellant’s consent, which resulted in MPAC and the Town interpreting it to mean that the appeals were resolved. The appeals are not settled. MPAC and the Town are not in agreement with an equity reduction on the returned CVA of $636,000. Therefore, all the issues in the appeals are still outstanding. Furthermore, the Act, directs the Board to determine the current value of the Subject Property, and the Board shall proceed to make this determination in the hearing.

ANALYSIS

Description of the Subject Property

14The Subject Property is a single-family detached residential dwelling located in the Town of Milton. The structure was built in 2007 with a construction quality of 6.5. It has a building total area of 2,195 square feet (“sq. ft.”), with an unfinished basement area of 926 sq. ft. It has an attached garage built in 2007 with building total area of 386 sq. ft. with construction quality of 3.0.

Issue 1 - Should the Board find inadmissible MPAC’s evidence of “opinion” of value given by a non-expert witness?

15The Appellant argued that MPAC’s evidence in its valuation report presented to the Board has no evidentiary value, since it contained the evidence of an opinion of value from MPAC’s witness, an MPAC employee, who was not presented by MPAC as an expert witness but a witness of fact.

16 Section 15(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 ("SPPA") provides:

Evidence

What is admissible in evidence at a hearing

(1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious.

17This section reiterates the jurisprudence that tribunals are not bound by the strict rules of evidence as courts; therefore, a tribunal may admit any evidence subject to being relevant, unduly repetitious, privileged and statutory exclusions.

18There is a presumption that opinion evidence is inadmissible as witnesses are to testify based on facts and not opinions deduced from facts. Experts provide their opinion on specialized areas to assist the Board in making decisions in appeals. During cross-examination, Valerie Lamothe, MPAC’s witness initially stated that she was a witness of opinion and later changed it to a witness of fact. The Board finds that Ms. Lamothe is a witness of fact, since MPAC did not present her as an expert witness. She testified that MPAC assessed the Subject Property at $636,000, however, based on her opinion of value the current value of the Subject Property is $696,000.

19The Board finds that MPAC’s evidence is admissible and reliable, even though it contained the opinion of value from a non-expert witness, as it was presented by an MPAC employee. Pursuant to s. 15 (1) of the SPPA, the Board has a broad discretion on admissibility of evidence. Furthermore, the Board may adjust the weight given to Ms. Lamothe’s evidence, if on hearing the evidence, the Board is concerned about its reliability.

20In Ganges Kangro Properties Ltd. v. Shepard, 2015 BCCA 522, (“Ganges Kangro Properties”), the British Columbia Court of Appeal (“BCCA”) dismissed the appellant’s appeal from an award of damages for breach of contract to the seller. The appellant and the seller entered a contract of purchase and sale of a property. The appellant breached the terms of the contract by not completing the transaction, alleging that the seller did not disclose flooding risk on the property. The judge awarded damages to the seller for breach of contract. On appeal, the appellant argued amongst other things that the judge relied on inadmissible lay opinion.

21In dismissing the appellant’s appeal, the BCCA referred to the modern approach to the compendious statement of fact exception articulated by Mr. Justice Dickson in Graat v. The Queen, 1982 CanLII 33 (SCC), [1982] 2 SCR 819 (“Graat”). The issue before the court in Graat was whether “non-expert witnesses could testify about the appellant’s degree of alcohol impairment”. Dickson J. stated:

I can see no reason in principle or in common sense why a lay witness should not be permitted to testify in the form of an opinion if, by doing so, he is able more accurately to express the facts he perceived.

22He further stated that the non-expert witnesses:

… are merely giving a compendious statement of facts that are too subtle and too complicated to be narrated separately and distinctly":

23He concluded that:

The judge in the instant case was not in as good a position as the police officers or Mr. Wilson to determine the degree of Mr. Graat's impairment or his ability to drive a motor vehicle. The witnesses had an opportunity for personal observation. They were in a position to give the Court real help. They were not settling the dispute. They were not deciding the matter the Court had to decide, the ultimate issue. The judge could accept all or part or none of their evidence. [Emphasis added]

24The BCCA in Ganges Kangro Properties concluded that,

the compendious statement of facts exception is limited to inferences drawn by non-expert witnesses who have personally observed the facts from which their inferences are drawn. This exception is also broad in scope, the real issue being one of weight, not admissibility. [Emphasis added]

25In this appeal, MPAC provided facts of market sales analysis to make its submissions on the current value of the Subject Property. Accordingly, it drew a conclusion expressed as an opinion of value by its witness, an MPAC employee. Ms. Lamothe reviewed the features/factual evidence of the Subject Property, and drew an inference based on what she observed and provided an opinion of value as an MPAC employee. The mandate of the Board, pursuant to the Act, is to determine the current value of the Subject Property. In exercising this mandate, the Board will review the evidence from the parties and determine which is the best evidence to find the current value. The Board will determine the weight to attach to Ms. Lamothe’s opinion of value in order to determine the best evidence to find the correct current value of the Subject Property.

Issue 2 - What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?

26In accordance with s. 44(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land”. Section 1 of the Act defines current value as “the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer”. That is, for the 2020 and 2021 taxation years, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.

27The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation date or close to it. If no such transaction took place, as is the case in this appeal, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

28The Board finds that the correct current value of the Subject Property is $672,000 (rounded) for the 2020 and 2021 taxation years.

MPAC and The Town’s Proposed Comparable Properties

29The Board finds that MPAC and the Town’s proposed comparable properties are the best evidence to determine the correct current value of the Subject Property.

30MPAC presented six comparable properties, which MPAC argued are similar to the Subject Property. The details of MPAC’s proposed comparable property sales are provided in Table 1 below.

Table 1

Subject Property

Property 1

Property 2

Property 3

Property 4

Property 5

Property 6

Roll Number

240909010017242

240909010017002

240909010017268

240909010017296

240909010017188

240909010017030

240909010027996

Address

1070 Easterbrook Cres

1037 Easterbrook Cres

1018 Easterbrook Cres

1027 Easterbrook Cres

1061 Easterbrook Cres

1020 Philbrook Dr

833 Hepburn Rd

Neighbourhood

A52 - 71

A52 – 71

A52 - 71

A52 – 71

A52 - 71

Property Code & Desc.

(301) Single-Family Detached (Not On Water)

Distance in km

0.0848

0.0862

0.0809

0.0661

0.1752

0.3016

Valuation

Current Value Assessment

$636,000

$634,000

$643,000

$637,000

$640,000

$612,000

Sale

Sale Date

20150715

20160907

20151113

20150918

20150730

20150320

Sale Amount

$716,000

$750,000

$620,000

$672,500

$646,000

$612,000

Time Adjusted Sale Amount

$770,864

$675,679

$632,272

$704,403

$695,500

$697,781

Effective Frontage (F)

38.52

36.09

40.03

38.94

39.04

36.09

Effective Depth (F)

100.26

100.07

100.26

100.07

80.84

Effective Site Area (Acres)

0.09

0.08

0.09

0.07

Actual Site Area (Acres)

0.08

0.09

0.07

Abuts Variable(s)

(U) Abuts Utility Box

Residential Structure

Year Built

2007

Effective Year Built

2007

2011

2007

Quality of Construction

6.5

Full Storeys

2 Storeys

Bedrooms

Baths

2.5

Building Total Area (SF)

2,195

2,196

2,195

2,134

First Floor Area (SF)

926

988

926

883

Second Floor Area (SF)

1269

1208

1269

1251

Basement Area (SF)

926

985

988

926

986

883

Finished Basement Area (SF)

Structure Description

(116) Attached Garage

Year Built

2007

Building Total Area (SF)

386

376

Quality of Construction

31MPAC provided the Board with the median time adjusted sales price per square foot for all its six sales and applied it against the building total area of the Subject Property to provide a value of $696,000. MPAC submitted that the current value of the Subject Property is $696,000.

32The Board finds that MPAC’s time adjustment factors (“TAF”) are not reliable to determine the current value of the Subject Property. In order to reflect the sale values on the valuation date of January 1, 2016, MPAC used TAF, based on a Sales Ratio Trend Analysis (“SRTA”) and a Sale to Assessment Ratio (“SAR”) study. The Appellant argued that the TAF are incorrect due to errors in the SRTA and that the plotted line on the graph in MPAC’s valuation report, on January 1, 2016, should be 1.00, which will prove that MPAC’s analysis is accurate. Ms. Lamothe admitted that it is 1.005, the Appellant argued that it is 1.07. Regardless, it is above 1.00; consequently, the Board will use the sale price of the proposed comparable property sales to determine the current value of the Subject Property.

33The Town presented MPAC’s comparable property Sales 1, 2, 3 and 4, which are all located on the same street as the Subject Property. The Town provided the Board with the average and median sale price per square foot of $314 per sq. ft. and $316 per sq. ft respectively. The Town submitted that the assessment rate per square foot for the Subject Property is $290. Therefore, the Board should confirm the assessment as returned at $636,000.

34The Appellant did not present the Board with any comparable property sale. The Appellant submitted that the parties had all consented to the CVA of the Subject Property as $636,000 at the commencement of the hearing and is relying on this consent to establish the current value of the Subject Property. The Board finds that this is not the appropriate method to determine the current value of the Subject Property. The Board’s mandate in accordance with the Act is to determine the current value of the Subject Property. The Board must be satisfied that this current value is correct. This is determined based on the sale of the Subject Property and/or the sales of properties within the vicinity of the Subject Property and not on the consent of the parties, which did not dispose of the issues in the appeal.

35The Board finds that all MPAC’s comparable property Sales are almost identical to the Subject Property, in terms of their building structure, location, year built, quality of construction and site area. Ms. Lamothe testified that comparable property Sales 1, 2, 4 and 5 are the same Tulip “B” model as the Subject Property.

36All of MPAC’s comparable property sales sold within the shoulder years of the valuation date, which is 12 months on either side of the valuation date of January 1, 2016. All the sales have the same:

i. year built of 2007;

ii. quality of construction of 6.5;

iii. building structure – two storeys;

iv. number of bedrooms - 4;

v. number of baths - 2.5;

vi. Attached garage built in 2007, with building total area of 386 sq. ft, except for Sale 6 with 376 sq. ft; and

vii. unfinished basements

37Comparable property Sales 1, 3, 4 and 5 have the same site area of 0.09 as the Subject Property, while comparable property Sales 2 and 6 have site areas of 0.08 and 0.07 acres, which is still within the same range as the Subject Property. Comparable property Sales 3 and 6 have building total areas of 2,196 and 2,134 sq. ft., also still within the same range as the Subject Property. Furthermore, these six sales are all located within the immediate vicinity of the Subject Property. Comparable property Sales 1 to 4 are located on the same street as the Subject Property, while comparable property sales 5 and 6 are located within the same homogenous neighbourhood as the Subject Property. Therefore, the Board used MPAC and the Town’s comparable property sales to determine the correct current value of the Subject Property.

Finding on Current Value

38In determining the current value of the Subject Property, the Board used the sale prices and not the time adjusted sale price of MPAC’s comparable property Sales since the Board finds that MPAC’s TAF are not reliable. The Town used the sale price not the time adjusted sale price of MPAC’s comparable property Sales 1, 2, 3 and 4 to make its submissions on the current value of the Subject Property.

39The average sale price per square foot of all MPAC’s comparable property sales is $306.28. When applied to the building total area of the Subject Property of 2,195 sq. ft., it provides a value of $672,284. The Board finds that the correct current value of the Subject Property to be $672,000 (rounded).

Issue 3 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.

40 Section 44(3)(b) of the Act directs that after determining current value,

the Board shall,

(b) 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.

41The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time adjusted sales price.

42The Board finds that an equity reduction is not necessary to its determined correct current value of $672,000.

43MPAC presented an equity analysis of 30 residential sales of single-family detached homes from January 1, 2015 to December 31, 2016 within 2.0 kilometres of the Subject Property. MPAC submitted that the median ASR of 0.930 of these 30 properties indicates that similar properties in the vicinity have been assessed at or near their current value, therefore an equity adjustment to its opinion of value of $696,000 is not necessary.

44The Appellant applied MPAC’s median ASR of 0.930 to what he believes the current value of the Subject Property should be, which he submitted as the returned value at $636,000. Accordingly, the Appellant submitted that the current value of the Subject Property should be reduced to $591,480. The Board notes that the Appellant questioned the reliability of MPAC’s TAF and submitted that it contained errors, yet the Appellant used MPAC’s median ASR of 0.930, which was derived by MPAC using the same TAF applied to the sale prices of the 30 properties to obtain the time adjusted sales ratio.

45The Board used the sale prices and not the time adjusted sale prices of the 30 properties to obtain the median ASR of 0.974, since the Board finds that MPAC’s TAF are not reliable. A median ASR of 0.974 indicates that similar properties in the vicinity have been assessed at or near their current value, therefore no further equity adjustment is required.

46In Re Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) (“Empire Realty”) the Ontario Court of Appeal addressed equity in assessment by stating that:

… an assessment made at the actual value of lands and buildings in compliance with the provisions of s. 35(1) would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred; … [Emphasis added]

47Using the words of the Ontario Court of Appeal in Empire Realty, the median ASR of 0.97 is not substantially below 1.00 to show an inequity. It reveals that MPAC is assessing properties in the vicinity at or near their sales prices.

CONCLUSION

48Although the evidence adduced indicates that the correct current value of the Subject Property could be as high as $672,000, MPAC has not served a notice of increase in assessment and adopts the position that the assessed value of $636,000 should be confirmed. The Board finds that the correct current value is $636,000 for the 2020 and 2021 taxation years, without any adjustment for equity.

“Subuola Awoleri”

SUBUOLA AWOLERI

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb

Telephone: 416-212-6349 Toll Free: 1-866-448-2248