General Motors of Canada Company v. Municipal Property Assessment Corporation Region 18, 2021 CanLII 77584

Tribunals Ontario / Tribunaux décisionnels Ontario

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: August 17, 2021 FILE NO.: DM 169894

Assessed Person(s): General Motors of Canada Company; General Motors of Canada Limited Appellant(s): General Motors of Canada Company; General Motors of Canada Limited Respondent(s): Municipal Property Assessment Corporation Region 18 Respondent(s): City of St. Catharines

Property Location(s): 570 Glendale Avenue Municipality(ies): City of St. Catharines Roll Number(s): 2629-010-011-20800-0000 Appeal Number(s): 2024803, 2339422, 2687806, 2893487, 2893488, 2917708, 2949272, 2974000, 3023580, 3088595, 3155834, 3237798, 3309277, 3335049, 3363172, 3381990, 3408073 and 3408073 Taxation Year(s): 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 Hearing Event No.: 742407 Legislative Authority: Rule 7, 43 and 49 of the Rules of Practice and Procedure

Parties and Counsel

General Motors of Canada Company Jamie G. Walker Alexander Pletsch Lynne Ashton

Municipal Property Assessment Corporation David Cowling Simon Sigler

City of St. Catharines John L. O’Kane

REQUEST FOR: Order declaring equity is not a “live” issue for the hearing HEARD: April 9, 2021 in writing ADJUDICATOR(S): Carly Stringer, Member

MOTION DECISION

OVERVIEW

1The Municipal Property Assessment Corporation (“MPAC”) has brought this motion for an order declaring that:

a. General Motors of Canada Company (the “Appellant”) failed to comply with Rule 43 of the Assessment Review Board’s (the “Board”) Rules of Practice and Procedure (the “Rules”),

b. equity of the assessments is not a live issue and shall not be raised or determined by the Board at the hearing; and

c. equity of the assessments is a new issue that cannot be raised at the hearing pursuant to Rule 49.

2The City of St. Catharines (the “City”) supports MPAC’s motion but has not made any submissions of its own.

3The Appellant opposes the motion.

Result

4The Board has carefully considered the evidence, submissions and case law provided by the parties. For the reasons that follow:

a. the Board finds the Appellant failed to comply with Rule 43;

b. the Board does not grant the relief requested and does not declare that equity of the assessments is not a live issue and shall not be raised or determined by the Board at the hearing; and

c. the Board does not grant the relief requested and does not declare that equity of the assessments is a new issue that cannot be raised at the hearing pursuant to Rule 49.

BACKGROUND

The Subject Appeals

5The Appellant is the assessed owner of 570 Glendale Avenue in St. Catharines, Ontario (the “Subject Property”). The Appellant has brought appeals relating to the Subject Property for the taxation years 2009 to 2021 (the “Subject Appeals”) pursuant to s. 40 of the Assessment Act (the “Act”).

6MPAC and the City are respondents to the Subject Appeals.

Applicable Law

7For the purposes of this motion, the Board refers to “equity” and “equitable assessment” pursuant to section 44(3)(b) of the Act:

(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(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.

8Several Rules are also engaged by this motion.

9The first Rules engaged are Rules 43 and 49:

Statements of Issues and Responses

43. Statements of Issues and Responses must contain:

b. If the issue is the equity of the assessment pursuant to section 44(3)(b) of the Assessment Act:

i. the assessment requested;

ii. identification of the vicinity claimed by the party;

iii. identification of similar lands in the vicinity to be relied on by the party;

iv. how the party proposes to calculate the adjustment for equity; and

v. a list of all facts, legal grounds and documents that the party relies on in support of its position.

No New Issues

49. An issue can only be raised at a hearing event if it has been set out in the Statements of Issues and Response which have been served on all other parties and filed with the Board in accordance with these Rules, unless the Board determines that there are exceptional circumstances.

10Rule 6 provides that substantial compliance with the requirements of the Rules is sufficient. The parties are not held to a standard of perfection when it comes to compliance with the Rules.

11Rule 7 provides that the Board will determine the appropriate consequences of non-compliance with these Rules.

12Rule 3 governs the interpretation of the Rules and powers of the Board, providing that the Rules “shall be liberally interpreted to ensure the just, most expeditious and least expensive determination of every proceeding.”

Procedural History

13The procedural background and underlying facts were canvassed by the Board in General Motors of Canada Company v St. Catharines (City), 2021 CanLII 794 (ON ARB) (“Motion to Strike Decision”). The Motion to Strike Decision will be discussed in more detail below. First, the Board will summarize the procedural history that is relevant to this motion.

14The Appellant served its Statement of Issues (“SOI”) on August 20, 2018. The SOI included the following submissions relating to equity of the assessment of the Subject Property:

Equity

50. Section 44(3)(b) of the Act requires the Board to have reference to the value at which similar lands in the vicinity are assessed and adjust the current value determined of land determined by the Board under section 44(3)(a) to make it equitable to that of similar lands in the vicinity when making a determination of an appeal.

51. The Appellant’s position is that the Current Value Conclusions for 2008 CVA, 2012 CVA and the 2016 CVA set out at paragraph 49 of this Preliminary Statement of Issues produce current values that are deemed to be equitable with similar properties in the vicinity.

52. However, if the Board determines current values for any or all the 2008 CVA, 2012 CVA, and 2016 CVA in excess of the current values set out in paragraph 49, the Appellant reserves its statutory right to raise, revise or develop a position with respect to equity of the assessment of the Subject Property pursuant to Rule 38(2) of the Board’s Rules of Practice and Procedure (“Rules”).

15On May 17, 2019, MPAC served its Statement of Response, stating therein that the Appellant’s SOI did not comply with Rule 43, therefore the Appellant did not properly plead equity and the Board “need only determine the current value of the land pursuant to s. 44(3) of the Act.”

16On November 29, 2019, the Appellant served its expert report. The expert report included an “Equity Report & Analyses” that provided analysis and opinion with respect to the equitable assessment of the Subject Property based on the current value returned by MPAC on the assessment roll for the applicable base years. The “Equity Report & Analyses” opined that the Subject Property is assessed inequitably when compared to the assessments of similar properties in the vicinity and concluded that a reduction is necessary.

17On July 2, 2020, MPAC served an Amended Statement of Response and equity report. In its Amended Statement of Response, MPAC stated that the Appellant did not comply with the requirements of Rule 43, and therefore the Appellant has not properly pleaded equity and the Board need only determine the current value of the land pursuant to s. 44(3) of the Act. MPAC further stated that its equity report responds to the Appellant’s “Equity Report & Analyses” from November 2019 and has been provided without prejudice to MPAC’s position that equity should not be considered.

18On July 29, 2020, the Appellant served an Amended SOI/Reply. Although a SOI and a Reply are two distinct pleadings, the Appellant served them as one document. The Amended SOI section provided comprehensive submissions on equity from paragraphs 83 to 90, including information regarding the Appellant’s position on the vicinity used to determine equity; the points of comparison used to identify similar properties in the vicinity; the appropriate test to be used to determine equity; and the resulting equitable assessments.

19The Amended Reply section included the following submissions regarding equity, at paragraph 97:

It is the Appellant’s position that equity of assessment is an additional issue to be determined by the Board.

The Board is required under s. 44.(3) sub-paragraph (b) of the Act to 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.

Paragraphs 104 through 111 of this Reply and Amended SOI outlines the Appellant’s position with respect to the equitable assessments sought under section 44(3)(b) of the Act.

20However, paragraphs 104 through 111 of the Amended Reply section do not actually outline the Appellant’s position regarding the equitable assessments sought. Paragraphs 104 through 111 of the Appellant’s Amended Reply section provide the Appellant’s reply submissions in relation to MPAC’s valuation methodology, as well as MPAC’s response to the Appellant’s SOI and the Appellant’s valuation. It is paragraphs 83 to 90 of the Appellant’s Amended SOI section that provide the Appellant’s position and analysis with respect to the equitable assessments sought pursuant to section 44(3)(b) of the Act.

21On November 3, 2020, MPAC brought a motion to “strike” the Amended SOI/Reply on the basis that the Appellant did not comply with the deadlines for service of these pleadings, as provided in the Schedule of Events (“SOE”).

Motion to Strike Decision

22The Board issued a decision on MPAC’s motion on November 3, 2020, being the Motion to Strike Decision referenced in paragraph 12 above.

23In that decision, the Board found the Amended SOI/Reply were functionally two distinct documents, even though the Appellant filed them as one. The Board found that the Appellant served its Amended SOI beyond the deadline prescribed in the SOE, and that the Appellant did not establish exceptional circumstances warranting an amendment to the SOE. The Board found the Amended Reply was provided within the timelines prescribed in the SOE. Ultimately, the Board declined to “strike” the impugned pleadings. Instead, the Board referenced Rule 49 and ordered that:

a. The Appellant cannot raise at a hearing any issues that are not raised in its original SOI or its Amended Reply;

b. The Appellant may rely on its Amended Reply, provided that the Amended Reply may only respond to new issues that have been raised in the Amended Statements of Response served by either MPAC or the City; and

c. If the Appellant’s Amended SOI/Reply document does not include a separate section for its Amended Reply, the Appellant is directed to prepare, serve and file a separate Amended Reply.

24On January 18, 2021, the Appellant advised the Board that it would not be filing a separate Amended Reply but would be relying on paragraphs 91 to 118 of the Amended SOI/Reply as its Amended Reply.

25The Subject Appeals proceeded to a case management appearance before the Board, with the parties disagreeing over whether equity is a “live” issue for the hearing. On February 19, 2021, the Board directed that MPAC file a motion with the Board to address its request that the Board should find that the Appellant should be prohibited from raising the issue of equity at the hearing.

PRELIMINARY MATTERS

26In its submissions on this motion, the Appellant has provided extensive background and argument on the issues that were before the Board in the Motion to Strike Decision, specifically, whether the Appellant should be granted an amendment to the SOE and be permitted to rely on its Amended SOI. By way of example, paragraphs 15 to 24 of the Appellant’s Response to Motion outline the Appellant’s position regarding the applicable criteria for extending the Schedule of Events, and the Appellant’s position on the exceptional circumstances warranting the Board exercising its jurisdiction “to extend the SOE timeline in this instance.”

27The timeline prescribed in the SOE is not at issue before the Board in this motion. The Board has already decided that the Appellant is not granted an amendment to the SOE and cannot rely on its Amended SOI. The within motion is not a review of the Motion to Strike Decision. Accordingly, the parties remain bound by the Board’s Motion to Strike Decision.

ANALYSIS

28The overarching question the Board must determine is whether the Appellant may raise the issue of equitable assessment at the hearing of the Subject Appeals. To address that question requires consideration of the following sub-issues:

• Issue 1: Did the Appellant fail to comply with Rule 43?

• Issue 2: If the answer to Issue 1 is yes, what is the appropriate consequence of non-compliance with Rule 43?

Issue 1: Did the Appellant fail to comply with Rule 43?

Submissions

29MPAC’s position is that neither the Appellant’s SOI nor its Amended Reply comply with the requirements of Rule 43.

30As previously noted above, the Appellant’s grounds for opposing the motion largely revisit the issues, evidence, and submissions presented to the Board in the Motion to Strike Decision. That said, throughout this decision, the Board will attempt to isolate the Appellant’s submissions as they relate to the issues on this motion.

31The Appellant disagrees with MPAC’s submission that its original SOI did not comply with Rule 43 and that it did not properly plead its position on equitable assessment. The Appellant says that this issue was raised by both the Appellant and MPAC, including at paragraphs 50-52 of the Appellant’s SOI; paragraphs 100 and 101 of MPAC’s Response to the SOI; paragraphs 126 to 127 of MPAC’s Amended Response to the SOI; and paragraph 97 of the Appellant’s Amended Reply. The Appellant submits that the Board should therefore reject MPAC’s assertion that its SOI and Amended Reply do not sufficiently raise the issue of equitable assessment simply because the Appellant did not employ specific wording in describing this issue.

32The Appellant further submits that both MPAC and the City have had notice of its position on equitable assessment since November 29, 2019 when the Appellant provided its expert report. The Appellant submits that the positions set out in the expert report did not change between the parties receiving the report on November 29, 2019 and service of the Appellant’s Amended SOI/Reply on July 29, 2020 and has not changed since.

Findings on Issue 1

33For the reasons that follow, the Board finds that the Appellant’s SOI does not satisfy the requirements of Rule 43.

34On a plain reading, the SOI does not state the assessment requested; does not identify the vicinity claimed by the Appellant; does not identify similar lands in the vicinity to be relied on by the Appellant; does not provide how the Appellant proposes to calculate the adjustment for equity; and does not provide a list of the facts, legal grounds and documents that the Appellant relies on in support of its position.

35Although the Appellant’s SOI does contain references to equitable assessment, these references do not render the pleading substantially compliant with Rule 43. There is not enough information in the SOI for a reader to understand the Appellant’s position on equitable assessment, particularly the vicinity, factors of similarity, or how the Appellant proposes to calculate an adjustment for equity. At most, the SOI confirms the Appellant’s position that its proposed current values are equitable with similar properties in the vicinity, and reserves the Appellant’s right to raise, revise or develop a position regarding equity if the Board determines current values in excess of the values proposed by the Appellant. The Board has previously confirmed that general language reserving statutory rights to raise equity—as the Appellant has done in this case—is not consistent with the requirements of Rule 43: see 2465702 Ontario Inc. v Township of Leeds and the Thousand Islands, 2019 CanLII 101171 (ON ARB), at paragraph 32.

36The Amended Reply unequivocally states the Appellant’s position that equity of assessment is an additional issue to be determined by the Board. However, Rule 43 does not make reference to a reply. Therefore, it is not clear that the Appellant can rely on the Amended Reply to satisfy Rule 43. Moreover, even if setting out the issue of equitable assessment in a reply were sufficient to satisfy Rule 43, the Amended Reply does not provide enough information to confirm the Appellant’s position on vicinity, factors of similarity, or how the Appellant proposes to calculate an adjustment for equity. Therefore, the Board finds that the Amended Reply does not satisfy the Rules on a plain reading, nor is the Amended Reply substantially compliant with the Rules.

37The Board does not accept the Appellant’s submission that MPAC and the City have had effective notice of its position on equitable assessment since November 29, 2019 when its expert report was served. An expert report is evidence prepared by a person a party intends to qualify as an expert at a hearing. The Board relies on expert witnesses to provide opinion evidence that is fair, objective, and non-partisan. Expert witnesses are required to sign an acknowledgment of expert duty confirming that their duty to provide fair, objective and non-partisan evidence to the Board prevails over any obligation owed to a party by whom they are engaged. Accordingly, an expert report does not constitute notice of a party’s position; that function is served by SOIs, Statements of Response, and Replies. While the expert report does contain much of the information required by Rule 43, it does not relieve the Appellant of the requirement to include this information in the SOI.

38For these reasons, the Board finds the Appellant’s SOI does not satisfy the requirements of Rule 43.

Issue 2: If the answer to Issue 1 is yes, what is the appropriate consequence of non-compliance with Rule 43?

Submissions

39MPAC submits that, due to the Appellant’s failure to comply with Rule 43, it was not provided with a full and fair opportunity to respond to the Appellant’s equity position. MPAC submits that should equity be raised at the hearing, MPAC will be prejudiced. MPAC asks the Board to declare that equity of the assessments is not a live issue and shall not be raised or determined by the Board at the hearing, and that Rule 49 prevents the Appellant from raising equitable assessment.

40The Appellant submits that neither MPAC nor the City have put forward evidence to demonstrate that either party will suffer harm if the relief requested on this motion is not granted. The Appellant submits that it will suffer irreparable harm and will be severely prejudiced if it is barred from raising the issue of equity before the Board.

41The Appellant submits that unlike Rule 43, Rule 49 makes no reference to a party’s “position” in respect of a particular issue such that if a party has raised its issues in its SOI, it may develop or refine its position on those issues in subsequent pleadings, as permitted.

42The Appellant also submits that consideration of equity is not optional under s. 44(3)(b) of the Act. The Appellant submits the Board would be acting outside its jurisdiction if it issued a decision declaring that equity cannot be raised at the hearing.

43In Reply, MPAC submits that it has provided evidence of prejudice. In addition, MPAC submits that a determination that equitable assessment is not a “live” issue does not relieve the Board of its obligation under section 44(3)(b). MPAC submits that the Appellant conflates the requirement of section 44(3)(b) of the Act with whether equity is a “live” issue as between the parties to this appeal. MPAC submits that if it can show the Appellant failed to comply with Rule 43 and that equity is not a “live issue” as between the parties to this appeal, that the Appellant cannot put forward its position on equity at the hearing. MPAC submits that the determination that equity is not a “live issue” does not prevent the Board from considering equity, but does prevent the Appellant from gaining an advantageous position with respect to equity because the Appellant did not provide MPAC or the City with a full and fair opportunity to respond to the Appellant’s equity position.

Findings on Issue 2

44Section 44(3)(b) of the Act directs that after determining current value, the Board shall “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.”

45The authorities provided are clear that the Board must perform the s. 44(3)(b) inquiry regardless of whether or not the parties have raised it as an issue in dispute:

a. In 1241676 Ontario Inc. v. Municipal Property Assessment Corp., Region No. 9, 2017 CanLII 7852 (ON ARB) (“1241676 Ontario”) at paragraphs 28-29, the Board noted that “[t]he parties state that equity is not an issue in the present case, but this does not exempt the Board from making its inquiry.” In this case, no equity reduction was made due to the lack of evidence on this point: see paragraphs 30-32.

b. In Dyriw Estate v Municipal Property Assessment Corporation, Region 14, 2019 CanLII 91528 (ON ARB) at paragraph 28, the Board confirmed that there is a “statutory requirement under s. 44(3)(b) of the Act that requires the Board to make a finding on the question of equity of assessment."

c. In both 1281162 Ontario Inc. v. Municipal Property Assessment Corp., Region No. 15, 2013 CarswellOnt 1336628 (“1281162 Ontario”) at paragraph 28 and Aumon v. Municipal Property Assessment Corp., Region No. 15, 2013 CarswellOnt 13349 at paragraph 31, the Board confirmed that considering s. 44(3)(b) is mandatory, even in circumstances where the parties have agreed that equity is not an issue.

46In its Reply submissions, MPAC concedes that the Board has a statutory duty to consider equitable assessment and submits that the Board can determine that equity is not a “live issue” without abrogating this statutory duty. MPAC relies on 1281162 Ontario as an example of a case where the Board may have reference to the value at which similar lands in the vicinity are assessed and determine that, in the absence of an evidentiary basis, no equitable deduction should be made.

47The case before the Board on this motion is decidedly different than the authorities that have been provided by the parties. This is not a case where the parties are in agreement that equity is not in dispute, such that neither party has provided sufficient evidence or submissions to enable the Board to determine that a reduction is necessary to make the assessment equitable. In the case before the Board on this motion, the Appellant wants to dispute the equity of the assessment. The Appellant has provided an equity report, and MPAC does not suggest that this equity evidence should be excluded. MPAC has even provided its own equity report, albeit without prejudice. Although the ultimate decision with respect to admissibility of the equity evidence will rest with the Hearing Member, this is not a circumstance where the Board had limited or insufficient evidence to determine whether an equitable adjustment is required.

48The Board finds it has a statutory duty to consider equitable assessment. The authorities cited by the parties show that the Board must look at the evidence before it and determine whether an adjustment for equity is required. In cases where neither party suggests equitable assessment is in dispute, like 1281162 Ontario, often the evidence is insufficient for the Board to conclude that an equitable adjustment is required. That does not mean the Board is relieved from performing the s. 44(3)(b) analysis. Accordingly, equitable assessment is always a “live issue” at a hearing; the Board is not prepared to grant the relief requested by MPAC by declaring that equitable assessment is not a live issue and shall not be raised or determined by the Board at the hearing of the Subject Appeals.

49With respect to whether the Appellant’s non-compliance with Rule 43 means that equitable assessment is a new issue that cannot be raised by operation of Rule 49, the Board has previous stated that failure to comply with Rule 43 may trigger Rule 49: see Wellings of Corunna Inc. v Municipal Property Assessment Corporation, Region 26, 2021 CanLII 49278 (ON ARB) at paragraphs 43 and 44. However, Rule 7 is clear that it is the Board that will determine the appropriate consequences of non-compliance with the Rules.

50The Board does not accept MPAC’s submission that equitable assessment should not be raised or determined at the hearing due to the Appellant’s non-compliance with Rule 43, by operation of Rule 49 or otherwise, given the totality of the circumstances of this case, including:

a. the mandatory nature of the s. 44(3)(b) inquiry and the Board’s obligations pursuant to the Act;

b. the Appellant’s position stated in its SOI and Amended Reply that equity is an additional issue to be determined by the Board at the hearing;

c. the fact that equity evidence has been provided by both parties;

d. the fact that the information required by Rule 43 is discernible in the Appellant’s equity report, and the Appellant’s position was stated explicitly in the Amended SOI. Although the equity report does not constitute notice of the Appellant’s position nor does it render the Appellant compliant with Rule 43, and the Amended SOI was not permitted by the Board, neither MPAC nor the City can claim they are entirely without knowledge of the Appellant’s position on equitable assessment, or the information required by Rule 43. The Board finds this mitigates any prejudice to MPAC and the City, as well as any concerns regarding procedural fairness.

51To further mitigate any prejudice and concerns regarding procedural fairness, if MPAC or the City requires additional clarity regarding the Appellant’s position, they may request a statement of the Appellant’s position on equitable assessment within ten (10) days of this decision being issued and the Appellant is directed to provide a statement outlining its position on equitable assessment within five (5) days of the request. This statement must include all of the information required by Rule 43(b).

52As a final note, this decision pursuant to Rule 7 was based on all of the circumstances of this case. While equity is always a “live” issue based on the evidence that is before the Board in a given case, that does not mean that parties will be permitted in every case to raise new evidence and submissions on equitable assessment after the deadlines prescribed by the Rules.

CONCLUSION

53The Board finds the Appellant has failed to comply with Rule 43. The Board finds the circumstances of this case favour allowing equitable assessment to be raised at the hearing.

ORDER

54The Board dismisses MPAC’s motion.

55MPAC and the City are granted 10 days from the date this decision is issued to request a statement of the Appellant’s position on equitable assessment. The Appellant is directed to provide a statement outlining its position on equitable assessment within five (5) days of any such request. The Appellant is directed to include all of the information required by Rule 43(b) in its statement.

56The hearing of the Subject Appeals, originally scheduled for July 5 to 13, 2021, was adjourned by the Board pursuant to an Expedited Board Direction Form dated June 17, 2021. The matter is scheduled to proceed to a Case Management Hearing 30 days after the release of the Board’s decision in Hearing No. 734564.