City of Vaughan v. Municipal Property Assessment Corporation Region 14, 2021 CanLII 74740

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 13, 2021

FILE NO.: DM 173042

Assessed Person(s): PS Romina Drive, Inc.

Appellant(s): City of Vaughan; Aaron Zamler

Respondent(s): Municipal Property Assessment Corporation Region 14

Respondent(s): City of Vaughan

Property Location(s): 201 Romina Drive

Municipality(ies): City of Vaughan

Roll Number(s): 1928-000-233-23600-0000

Appeal Number(s): 3344025, 3404512 and 3443638

Taxation Year(s): 2019, 2021 and 2021

Hearing Event No.: 750272

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

Parties

Counsel*/Representative

PS Romina Drive Inc.

David Fleet*

City of Vaughan

Jaroslaw Wowk

Municipal Property Assessment Corporation

Karey A Lunau*

REQUEST FOR: Dismissal of Appeals and Constraining Evidence

HEARD: August 12, 2021 in person

ADJUDICATOR: Jean-Paul Pilon, Member

MOTION DECISION

OVERVIEW

1PS Romina Drive Inc. (“Romina”) is the owner of a property located at 201 Romina Drive (the “Subject Property”). The City of Vaughan (the “Municipality”), in which the Subject Property is located, appealed the assessment returned by the Municipal Property Assessment Corporation (“MPAC”) for the 2019 taxation year pursuant to section 40(1) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). Further appeals were deemed for the 2020 and 2021 taxation years pursuant to section 40(26) of the Act.

2Romina filed two motions with the Board in these appeals returnable August 12, 2021.

3In the first motion, Romina requested the dismissal of the Municipality’s appeals and, alternatively, “disallowing the (Municipality) from adducing evidence in its proposed Witness Statements and Hearing Material.” In its second motion, Romina requested an order constraining MPAC from seeking an assessment for the Subject Property higher than returned, an order permitting Romina to establish an audio and visual record of a hearing, and direction as to next steps in these appeals.

Result

4For the reasons below, Romina’s first motion is dismissed in its entirety. Romina’s second motion is granted to the extent that it is determined that MPAC’s revised Statements of Response and expert report were served on the other parties late and without exceptional circumstances. Romina’s request to make an audio and visual recording of a hearing is also dismissed but can be renewed at a hearing. Finally, the next and final step in these appeals is for them to be heard.

ANALYSIS

Factual Background

5The notice of motion for the first motion indicated that the single contested issue in these appeals is vacant land value. It said that MPAC assessed the Subject Property as vacant land and returned assessed values of $3,972,000 for the 2019 taxation year, and $4,143,000 for the 2020 and 2021 taxation years. Matt Cunningham, whose affidavit affirmed on June 1, 2021 was filed in support of the motion, wrote that but for the Municipality’s appeals, there had been no dispute between MPAC and Romina as to the assessed values of the Subject Property.

6Mr. Cunningham’s affidavit recited the dates on which the parties circulated their pleadings. First was the Municipality’s Statement of Issues dated January 15, 2020, which was due on February 11, 2020 according to the Schedule of Events that was extended due to the pandemic (referred to as the “Amended Schedule of Events”) where the Commencement Date was September 16, 2019. In that document, the Municipality sought a higher assessment for the 2019 and 2020 taxation years of $9,126,000 based on a sale of the Subject Property on June 27, 2016 at that same amount.

7MPAC then served three responses according to the affidavit. These were dated October 29, 2020, February 5, 2021 and February 19, 2021, and they asserted 2016 current value assessments (“CVA”) for the Subject Property of $8,852,000, $6,652,000 and $6,255,000 respectively. Additionally, Mr. Cunningham affirmed that MPAC served expert reports supporting the latter value dated March 9, 2021. Notable at this point is that the Amended Schedule of Events provided that each party who responds to an appellant had until November 3, 2020 to provide its Statement of Response and any additional supporting disclosure.

8Romina then served its response on November 2, 2020, prior to its November 3, 2020 deadline in the Amended Schedule of Events.

9Finally, the Municipality served its reply dated November 27, 2020, prior to its deadline in the Amended Schedule of Events of December 1, 2020. In the notice of motion, Romina argued that in that document, the Municipality misapprehended the nature of the sale of the Subject Property and “what constitutes an appropriate equity analysis,” which are issues that can be addressed at a hearing.

10Romina raised four broad issues in its written submission accompanying the first motion: that the Board controls its own process, that to allow these appeals to continue would constitute an abuse of process, that the Municipality’s position lacked evidence with “an air of reality” that could not “possibly succeed” and, alternatively that the City’s witness statements were improper because the Municipality did not satisfy “the requirements of serving, well in advance of the hearing, an expert report from a duly qualified, independent expert, in compliance with the Board’s Rules.” As a result, Romina’s position was that if those statements were inadmissible and that if the Municipality had no evidence, there would be no evidentiary foundation for the appeals.

Issue in the First Motion – Should the Appeals be Dismissed?

Control and Abuse of Process

11Romina’s submission correctly stated that the Board controls its own process and that dismissal of appeals is an extreme remedy that requires clear evidence before that relief is granted (Municipal Property Assessment Corporation, Region 14 v Upper Keele Inc., 2018 CanLII 126632 (ON ARB), 2018 CanLII 248 (ON ARB) at para. 10). To that end, Romina’s position in the motion was that the Municipality “proposed no evidence expressing an opinion of the appropriate or equitable 2016 CVA of the Subject Property, including the absence of any expert report, and that it would be against the rules of natural justice and procedural fairness if at this late point in the appeal process the Municipality were permitted to adduce any new evidence.”

12The Municipality’s Statement of Issues indicated that its position was that the assessment was too low and incorrect because of a sale of “a sale of a property on or near the valuation date of January 1, 2016 that is the best indicator of its value.” The Case Management Report and Order that issued after the Board held a Case Conference indicated that the Municipality would call two witnesses without any indication that they would be called as expert witnesses.

13There is no rule requiring parties to appeals to call expert witnesses at hearings, nor are they required to rely on expert reports. Rule 50 of the Board’s Rules of Practice and Procedure (the “Rules”) simply provides the minimum requirements for such reports.

14Moreover, the Board notes that the parties did not indicate in their mandatory meeting form dated February 22, 2021 that they would require an extended Schedule of Events for additional expert reports (where MPAC’s expert reports served on the other parties are addressed later in this decision). In fact, the Rules do not require a party to rely on any evidence at all at a hearing. The only requirement is that if they do have evidence that they intend to rely on at a hearing, that it be served in accordance with the Schedule of Events and any applicable Rules.

15Furthermore, section 15(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (the “SPPA”) provides that a tribunal may admit any oral testimony and any document or thing relevant to the subject-matter of the proceeding. Section 15(2) of the SPPA provides that nothing is admissible that would be inadmissible in a court because of privilege or by the statute under which the proceeding arises or any other statute. Neither of these are at issue in this motion.

16Accordingly, there is no reason that the testimony of the witnesses that the Municipality intends to call should be inadmissible. It should go without saying that Romina will be entitled to argue the weight that should be given to that evidence at an oral hearing.

17Romina’s argument was that the Board has the jurisdiction to prevent abuse of its process. This correct because Rules 24(b) and (e) provide that the Board may dismiss a proceeding if a proceeding is frivolous or vexatious or otherwise abusive of the process, or if an appellant has not complied with statutory requirements of the Rules.

18However, there is nothing in this part of the motion indicative of any abuse of process in these appeals. The only evident breach of the Rules in these proceedings was in MPAC’s late service of its final two Statements of Response and its expert reports, which are which constrained in Romina’s second motion addressed below.

Evidence

19The crux of Romina’s argument in this part of its first motion was that that the Municipality’s witness statements “do not constitute prima face evidence in support of any ground of appeal, that the Municipality has chosen to proceed without any expert report or any evidence concerning the correct or equitable value of the Subject Property.” This, in Romina’s view, “lacks supporting evidence with an air of reality, and cannot possibly succeed.”

20First, the ground of appeal in the appeals is that the assessment is too low and therefore incorrect as set out in the Municipality’s Statement of Issues. This is a statutory ground of appeal pursuant to section 40(1)(a)(i) of the Act.

21Second, the “air of reality” test argued by Romina is derived from criminal law, as shown in the cases cited in its material. It is not, therefore, a test that should be relied upon by the Board, particularly when there is no requirement in the Act or the Rules for a party to an appeal to rely on any evidence at all. In this case, the Municipality disclosed the expected testimony of its witnesses at the hearing through witness statements that were provided to the other parties in accordance with the Rules.

22MPAC correctly pointed out in its motion material that the Municipality was entitled to appeal the assessments, that merely appealing an assessment is not abuse of process, and that a determination of an appeal is not prejudicial to a party. Municipalities are statutory parties to appeals pursuant to section 40(11)3 of the Act that are entitled to appeal assessments. Every property owner in Ontario runs the risk that their municipality will appeal an assessment to the Board.

Witness Statements and Expert Reports

23Witness statements only indicate the testimony that is expected witnesses will give at a hearing, and at the hearing those witnesses can be examined and then cross-examined on that testimony. There is nothing in the motion material explaining why those statements are improper as submitted by Romina.

24Finally, and as determined above, there is no requirement that a party to an appeal produce any expert report or call any witness proffered as an expert.

25As a result, the Board finds that there is nothing frivolous or vexatious with the way that the Municipality has proceeded in these appeals, and that there are no grounds pursuant to Rule 24 to dismiss the appeals.

Result of the First Motion

26Romina’s first motion to dismiss the appeals is therefore dismissed.

Issues in the Second Motion

27In its second and alternative motion submitted in the event the appeals were not dismissed, Romina requested an order constraining MPAC from seeking assessments for the Subject Property above those returned on the regular roll for each of the taxation years in question. It also requested an order permitting Romina to establish an audio and visual record of the hearing, as well as an order for directions as to the fair, just, most expeditious and least expensive determination of the appeals.

Issue 1 - Constraining Evidence

28Romina argued that MPAC’s responses were “3^rd, 4^th and 5^th bite(s) at the apple through repeated changes of opinion (expressed in pleadings, without the consent or any other party or a permissive Order of the Board, or in an expert report), asserting 2016 CVAs greater than originally assessed on the roll, at $8,852,000, $6,652,000 and $6,255,000 respectively.” It further argued that those responses did “not assert any omission from or error in the assessment roll which could justify an increase” and that the Rules do not expand MPAC’s jurisdiction from using an assessment appeal to increase an assessment above that returned on the roll for the years in question.

29A similar request to constrain was argued before Member Stabile by Romina’s counsel in Piret (86 Pillsworth) Holding v. Municipal Property Assessment Corp., Region 15, [2020] O.A.R.B.D. No. 214 (“Piret”) at paras. 14 to 21, also cited as Pure Industrial Real Estate Trust v Municipal Property Assessment Corporation, Region 15, 2020 CanLII 103476 (ON ARB). The only difference in that case was that the appellant was a property owner and not a municipality, and MPAC sought a higher assessment than returned where the Rules permit any party in Statements of Issues and Responses to request a higher assessment than returned. The request before the Board in that case was to constrain MPAC from seeking an increased assessment.

30In Piret, the Board determined that MPAC was entirely within its rights to request a higher assessment than the one returned. First, the Board noted the discretionary nature of section 44(1) of the Act provides that the Board “may reopen the whole question of the assessment.” It then referred to the mandatory nature of section 44(3) of the Act which directs that the Board “shall… determine the current value of the land.”

31The Board in Piret declined to follow a case that Romina argued should be followed here, Citipark v. Ontario (Regional Assessment Commissioner, No. 3), 1995 CarswellOnt 6876, because section 44(3) of the Act did not exist at that time. This was confirmed in the extraneous material submitted in support of the motion which included a copy the Bill which amended the Act in 2008.

32There was no indication in any of the motion material that Piret was reviewed or appealed. However, nothing submitted in support of the motion suggests that there was any significant error of law in Piret such that the Board would likely have reached a different decision.

33Two further paragraphs of the Piret decision are salient to this decision to underline its conclusion:

20. On the jurisdictional issue, I believe that s. 44(3) provides a full answer. It mandates the Board to determine the correct current value and is not limited to any specific valuation approach. It starts fresh, without reference to the value returned on the Roll.

21. Moreover, the Divisional Court in Municipal Property Assessment Corporation v. Zarichansky, 2020 ONSC 1124, also relied on by Mr. Mitchell (who represented MPAC), reviewed the legislative scheme of the Act and noted that “MPAC is initially tased with determining the current value of the property. However, where the taxpayer appeals to the Board, it is up to the Board to make that determination.” (See para. 40). It is not the starting point in the appeal process. The Court also stated that “The Board is an adjudicative tribunal and it cannot abdicate its statutory duty to determine the current value of a property pursuant to s. 44(3) … of the Act.” (See para. 32).

34Piret provides a complete answer to the issue before the Board in this motion. However, one further argument in the motion in relation to it is addressed here: that “the Member inexplicably overlooked the binding Divisional Court findings in Toronto v. Municipal Property Assessment Corp., 2013 ONSC 6137, [2013] O.J. No. 4425. (Ont. Div. Ct.) (“Toronto”).”

35The Board previously considered the Toronto decision in a review decision, Merivale-Gilmour Manor Ltd. v Municipal Property Assessment Corporation, Region 03, 2020 CanLII 28326 (ON ARB), (ON ARB) (“Merivale”). At paragraph 30 of Merivale, the Board set out that the argument before it was that “MPAC does not have the legal authority to seek an increased assessment based only on a changed opinion of value and, consequently, the Board cannot exercise any jurisdiction in this appeal proceeding that MPAC did not have in the first instance.” This is essentially the same argument before the Board in this motion. It then quoted para. 64 of the Toronto decision which said, in part, that “MPAC has no jurisdiction to amend the current value under s. 33(3) or 34(1)(b)(i) in the absence of a physical change to the property, the same is true for the (Board).”

36The appeals before the Board in this case were not made to address omitted or supplementary assessments pursuant to sections 33 or 34 of the Act. The appeals that were at issue in Merivale were appeals pursuant to section 40 of the Act challenging MPAC’s general reassessment of the Subject Property, as were the ones here. As a result, the Board in Merivale determined that the Toronto decision was not applicable in that decision, and the Board makes the same determination here for the same reason.

37In summary, the Board is required to determine the current value of the land and an appellant is entitled to seek a higher assessment than that returned by MPAC. The process in which that position can be asserted is in the Rules, which is addressed next in this decision.

The Rules

38Rule 43 sets out the requirements of Statements of Issues and Responses.

39Both notices of motion alleged issues relating to the contents of these documents, however all of them, including those which make reference to “profound misapprehensions” in the Municipality’s Statement of Reply, may be addressed at a hearing. Based on the submissions in the motion material, the Board is not satisfied that any of them are not compliant with Rule 43.

40The notices of motion raised the fact that MPAC revised its opinion of value three times (and not more than that, as indicated elsewhere the material noted above) in its Statements of Response. There was no reason that MPAC should not have been entitled to change its position prior to the due date for its Statement of Response in the Amended Schedule of Events. In fact, Rule 44 provides that “Statements of Issues or Responses cannot be amended after the due dates for amending these documents set out in the Schedule of Events unless all other parties consent, or the Board directs otherwise.” As noted earlier in this decision, the date in question was November 3, 2020.

41However, MPAC’s final two amendments were served on the other parties on February 5, 2021 and February 19, 2021 along with expert reports, well beyond the due date in the Amended Schedule of Events for those documents and any additional disclosure. In addition, MPAC did not argue that there were any exceptional circumstances pursuant to Rule 40, nor is there a provision for amending pleadings in the Amended Schedule of Events other than Rule 44 as it argued in its motion material.

42As a result, Romina’s motion to constrain MPAC’s submissions should be successful to the extent that these latter Statements of Response and expert reports served late should not be before the Board at a hearing.

Issue 1 - Result

43MPAC is not entitled to rely on its final two Statements of Response and its expert reports because they were served beyond the time allowed in the Schedule of Events.

44In all other respects, however, Romina’s request to constrain MPAC from increasing the 2016 CVA is dismissed.

Issue 2 - Recording the Hearing

45Next Romina requested an order permitting it “to establish an audio and visual record of the evidence adduced concerning the hearing of the merits of the (Municipality’s) appeals.”

46Rule 91 requires such a request to be submitted in advance, which Romina has done by way of this motion. However, Rule 91, which is not referred to in the motion material, also required the Board to be satisfied as to a number of factors: that the hearing will not be disturbed or disrupted, that no one will be subject to any discomfort, and that the Board should consider the public interest in having the proceedings accessible. None of these factors were addressed in the motion material.

47Romina’s request is also deficient because it did not explain why a video recording would be required when, to the Board’s knowledge, audio recordings always suffice for the purpose of obtaining transcripts. In addition, the request fails to address the recent addition of section 29(2) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 which it should have done.

48Neither MPAC nor the Municipality stated any position on this request.

Issue 2 - Result

49As a result of these deficiencies in Romina’s submission, this request is denied. It can be renewed at a hearing where a Member may canvass the issues set out above and, if the request is granted, review the conditions of approval provided in Rule 92.

Issue 3 – Next Steps

50Finally, Romina requested order for directions as to the fair, just, most expeditious and east expensive determination of the appeals. It made no submission as to what these should be, beyond the requests in the motion.

51The next and final step in these appeals is for them to be heard. They should therefore be set down for a hearing.

Issue 3 - Result

52A hearing should be scheduled.

Results of the Second Motion

53The Board therefore finds that MPAC shall be limited to those issues raised in its first Statement of Response dated November 3, 2020.

54In all other respects, there shall be no order of constraint.

55Romina’s request to record any hearing is denied but can be renewed at a hearing.

56These appeals should now be scheduled for a hearing.

ORDER

57The Board orders that MPAC shall not be entitled to rely on its second and third Statements of Response and its late expert reports. In all other respects these motions are dismissed.