Bren-Coll Holdings Inc. v. Municipal Property Assessment Corporation Region 14, 2021 CanLII 92528

Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: September 23, 2021 FILE NO.: WR 173492

Assessed Person(s): Bren-Coll Holdings Inc. Appellant(s): Bren-Coll Holdings Inc.; Brendan Charters Respondent(s): Municipal Property Assessment Corporation Region 14 Respondent(s): City of Vaughan

Property Location(s): Keele Street West Municipality(ies): City of Vaughan Roll Number(s): 1928-000-271-15800-0000 Appeal Number(s): 3434258 and 3444326 Taxation Year(s): 2020 and 2021 Hearing Event No.: 751473

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

APPEARANCES:

Parties	Representative
Bren-Coll Holdings Inc.	Brendan Charters
Municipal Property Assessment Corporation	Leo Verduci
City of Vaughan	Jaroslaw Wowk

HEARD: August 23, 2021 by video conference

ADJUDICATOR(S): Jennifer Griffith, Member

DECISION

OVERVIEW

1Bren-Coll Holdings Inc. the (“Assessed Person/Appellant”) is the owner of the property located at Keele Street West CON 4 PT Lot 32 (the “Subject Property”) in the City of Vaughan (the “City”). The Subject Property is a Property Type 220 – farm without residence – with commercial/industrial operations. The Appellant filed appeals for the returned assessment of $847,000 for the 2020 and 2021 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

2It is the Appellant’s position that the Municipal Property Assessment Corporation’s (“MPAC”) returned current value assessment of $847,000 is too high and that the correct current value should be no more than $180,000 based on similar lands in the vicinity. MPAC takes the position that the correct current value should be $1,278,000 based on the Cost Approach to value. However, MPAC is not seeking an increase in assessment and is asking to have the returned assessment of $847,000 confirmed. The City was in attendance and although it served no pleadings, the City states that it adopts MPAC’s position and was allowed limited cross-examination.

3Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value and s. 19.2(1)4 provides that, for the 2020 and 2021 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016.

4Pursuant to s. 40(11) of the Act, the municipality in which the land is located is a party to this proceeding and a representative was in attendance.

5Pursuant to s. 44(3)(b) of the Act, MPAC takes the position that an equitable reduction of the current value is not required. The issue of equity was not raised by the Appellant. Therefore, equity is not at issue in this appeal.

Issues for the Hearing

6The issues to be determined on this appeal are:

1. Does Issue Estoppel apply in this case?
2. A determination of the correct current value of the Subject Property for the 2020 and 2021 taxation year based on: a. The Cost Approach; and b. The Direct Comparison Approach
3. Increase in assessment of 450 percent over period 2009 – 2020 taxation years?

Result

7The Board finds the correct current value of the Subject Property is $847,000 as of the valuation date January 1, 2016, which is applicable to the 2020 and 2021 taxation years.

8The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required because equity is not at issue in this appeal.

9Therefore, the Board orders that the s. 40 returned assessment of $847,000 be confirmed for the 2020 and 2021 taxation years. The following apportionment breakdown is also confirmed as stated:

I. Farm Tax Class $186,700 II. Commercial Tax Class $660,300

PRELIMINARY MATTER

Issue 1 – Does Issue Estoppel apply in this case?

10At today’s hearing, the Appellant submits that the principle of Issue Estoppel applies to the appeals because the same issues were decided in a Board decision on January 21, 2014 (File No. FL 118682 for the 2012 taxation year for the Subject Property). The Appellant is asking that MPAC is prevented today from re-arguing the issue of current value for the 2020 and 2021 taxation years with a valuation date of January 1, 2016.

11In support of his argument, the Appellant submits that the returned assessment for the 2012 taxation year (valuation date is January 1, 2008) was appealed with the Board. The appeal was heard on November 5, 2012 and an Interim Decision was rendered by the Board on January 21, 2014 (File No. FL 118682). The Appellant argues that this same decision should be applied to the 2020 and 2021 appeals (valuation date January 1, 2016) which is before the Board today, because the issues are the same.

12For context, here are excerpts from the Interim Decision rendered by the Board on January 21, 2014 (File No. FL 118682) on consent of the parties:

The Board orders on consent of the parties that:

2The assessment of the subject property is reduced from $4,311,000 to $171,141 for the 2012 taxation year.

3A portion of the subject property with a current value of $62,244 is found to be farm land used for farm purposes within the meaning of s. 19.(5) of the Assessment Act (“Act”) … for the 2012 taxation year.

4The remaining portion of the subject property is valued and classified as follows pursuant to Ontario Regulation (“O. Reg.”) 282/98 (as amended) made under the Act for the 2012 taxation year.

Current Value	Property Class
$108,897	Commercial (Vacant Land)

5The issue of whether the lands found in paragraph 3 to be farm lands used for farm purposes should be classified in the Farm Property Class is referred to the Agriculture, Food and Rural Affairs Appeal Tribunal (“AFRAAT”) in accordance with s. 31 of O. Reg. 282/98 (as amended).

6If AFRAAT determines that the portion of the property found to be farm lands used for farm purposes is not eligible for the Farm Property Class the property shall be classified in the Residential Property Class pursuant to s. 3(1) 2.1 of O. Reg 282/98 (as amended).

13The Appellant testifies that AFRAAT subsequently confirmed the farm designation referred to in the Interim Decision of January 21, 2014. He also testifies that there have been no physical changes, no changes in use and no changes in zoning to the Subject Property. The Appellant submits that although the Subject Property was not inspected for this current appeal, an inspection was done by Brad Stacey, MPAC on January 26, 2012.

14The Appellant, in its Statement of Issues served on April 16, 2021, stated that since 2009, the valuation of the Subject Property increased by 450 percent which is significantly higher than open market values for agricultural properties in the same area and for the same period.

15Based on the above information, the Appellant is of the view that Issue Estoppel applies and that the same decision rendered by the Board on January 21, 2014 should apply to today’s appeals for the 2020 and 2021 taxation years. However, the Appellant is not seeking the same current value of $171,141 instead, is seeking a current value of $180,000 for the 2020 and 2021 taxation years based on the assessments of proposed comparable properties in the vicinity.

16In response, MPAC objected and argued that the Issue Estoppel does not apply to the appeals for 2020 and 2021 taxation years, because the valuation of the 2020 and 2021 appeals is based on the valuation date of January 1, 2016, whereas, the appeal for the 2012 taxation year was based on the valuation date of January 1, 2008.

17MPAC also argues that today’s issues for the 2020 and 2021 taxation years are different from the appeal for the 2012 taxation year. The issue today is the correct current value which is then apportioned in the Farm Tax Class and Commercial Tax Class, whereas, the Interim Decision issued on January 21, 2014 for the 2012 taxation year was a referral to AFRAAT seeking approval for a portion of the value to be classified in the Farm Tax Class. The remaining portion of the value was in the Commercial Tax Class.

18The City also concurs with MPAC that Issue Estoppel does not apply to the appeals for the 2020 and 2021 taxation years.

Findings on Issue Estoppel

19Issue Estoppel may bar a party from re-arguing an issue determined in an earlier hearing. It sometimes arises in assessment appeals because one valuation date is used for more than one year; the issue/s remain/s the same; the parties to the proceedings remain the same; and the Board’s decision for a previous taxation year which applies to the same valuation day is final.

20Reviewing the evidence presented in support of Issue Estoppel, the Board accepts MPAC’s arguments and finds that the evidence does not support Issue Estoppel, because the appeal for the 2020 and 2021 taxation years before this Board is based on the valuation date of January 1, 2016; whereas, the appeal for the 2012 taxation year (Interim Decision issued by the Board on January 21, 2014) was based on the valuation date of January 1, 2008. Therefore, Issue Estoppel cannot be applied to the appeals for the 2020 and 2021 taxation years.

21The Board also finds that the issues for the appeals for 2020 and 2021 taxation years are quite different from the issues in the appeals for the 2012 taxation year. The issues for the 2020 and 2021 taxation years are to determine the correct current value based on the valuation date of January 1, 2016; and to apportion the correct current value into the amount attributed to the Farm Tax Class already approved by AFRAAT and the remaining amount into the Commercial Tax Class. Whereas, the issues of the correct current value for 2012 taxation year were agreed to on “consent” of the parties, the apportionment determined to be farm lands used for farm purposes was referred to AFRAAT seeking approval to be in the Farm Tax Class, and the correct current value was based on the valuation date of January 1, 2008. Therefore, the differences in the issues for the appeals for the 2020 and 2021 taxation years and the issues in the appeal for the 2012 taxation year are not the same and do not support the Appellant’s motion of Issue Estoppel.

22Based on the evidence, the Board dismisses the Appellant’s motion of Issue Estoppel.

23The Board orders the hearing for the appeals for the 2020 and 2021 taxation year to continue.

ANALYSIS

Issue 2 - A determination of the current value of the Subject Property for the 2020 and 2021 taxation years.

24In determining the correct current value, the Board references s. 19(1) of the Act, which states that the assessment of land shall be based on its current value, which is defined 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”. The valuation date for the 2020 and 2021 taxation years is January 1, 2016.

25For the reasons discussed below, the Board finds the correct current value is $847,000 for the 2020 and 2021 taxation years.

26Reviewing the following evidence presented in support of current value, the Board finds that MPAC presents the best evidence of value for the secondary structures on the Subject Property based on the Cost Approach; and the best evidence of the site areas (farm portion and the commercial portion) of the Subject Property, based on sales which occurred in the open market at or around the valuation date of January 1, 2016.

27The Board rejects the Appellant’s evidence of current value based on the returned assessments of six proposed comparable properties which were not sold and located in the vicinity as the Subject Property. The Appellant also provides no costing values for the secondary structures located on the Subject Property and no sales in support of the value of the commercial and farm portions of the site area of the Subject Property.

Issue 2a - The Cost Approach

MPAC’s Evidence

28The Cost Approach is a valuation method whereby a property is valued based upon the cost to build a new or substitute property, less any depreciation evident in the existing property, then adding the value of the cost to build the new structure/s to land value to determine the current value as of the valuation date. In this case the valuation date is January 1, 2016.

29MPAC’s Representative, Leo Verduci, presents a Valuation Report dated April 20, 2021 which he prepared and testifies to the information contained in the report. MPAC states that the estimate of current value in its report was incorrectly stated as $1,197,000 and instead should have been $1,278,000 (rounded). The reason being that the cost value of $81,000 (rounded) for the “communication tower” on the Subject Property was in advertently omitted in its calculation. As the costing of a total of $81,000 for the communication tower was included in the Subject Property Profile’s breakdown in its report, the Board accepts MPAC’s revised opinion of value for the secondary structures of $1,278,000.

30To estimate the Replacement Cost minus depreciation for all secondary improvements on the Subject Property, MPAC testifies that it utilizes any or all MPAC’s costing program—Automated Cost System (“ACS”), Agricultural Cost Guide and/or Residential Cost Manual. It also relies on Hanscomb Limited for costing data specifically geared towards the Canadian Construction Industry which is integrated with its ACS database.

31The following is a breakdown of the Replacement Cost for all secondary improvements:

MPAC’s Replacement Cost minus Depreciation

IMPROVEMENTS	TOTAL BUILDING AREA (sq. ft.)	YEAR BUILT	VALUE (per sq. ft.)	TOTAL VALUE	PHYSICAL DEPRECIATION VALUE	TOTAL VALUE LESS DEPRECIATION
COMMUNICATION TOWER	100	2002	$97.33	$9,733	$1,654	$8,078
YARDWORK	NIL	NIL	N/A	$147,074	$73,537	$73,537
BARN	5,942	2014	N/A	$77,072	NIL	$77,072
TOTAL VALUE LESS DEPRECIATION						$158,687

32Based on the above analysis, MPAC is of the view that the total value (less depreciation) of $158,687 for the secondary structures on the Subject Property is reasonable.

Appellant’s Evidence

33The Appellant provides no costing evidence for the secondary structures on the Subject Property and argued that the total area of the barn should be 5,000 square feet (“sq. ft.”) as opposed to 5,942 sq. ft. presented by MPAC.

Findings of the current value of the secondary structures on the Subject Property

34The Board finds that MPAC presents the best evidence on the costing value of the Subject Property determined by the ACS which results in a current value of $158,687. This current value was not refuted by the Appellant and the Appellant presents no alternative value in support of the current value of the secondary structures on the Subject Property.

35The Board finds that the Appellant presents no factual evidence to show that the total area of the barn is 5,000 sq. ft. which the Appellant argues is less than the total area of 5,942 sq. ft. presented by MPAC. Therefore, the Board accepts the total area presented by MPAC.

Issue 2b - The Direct Comparison Approach

MPAC’s Evidence

36The Direct Comparison Approach estimates the market value by comparing the sale prices of similar properties (in terms of lot size, total building area, year built, quality of construction etc.) that have sold within a reasonable timeframe of the valuation date to the Subject Property. In this case, the valuation date is January 1, 2016.

37In support of the commercial portion of the land value, MPAC presents an analysis of two proposed comparable properties, Property Code 106—Vacant Industrial Land; and one proposed comparable property in support of farm land value, Property Code 201—Farm with Residence—with or without Secondary Structures; No Farm Outbuildings. These three proposed comparable properties are located within 5.4844 kilometres north of the Subject Property.

38MPAC provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in its analysis, by utilizing the Direct Comparison Approach to value.

39MPAC testifies that the Subject Property’s lot size of 6.21 acres reflect a commercial portion of 0.75 acre in the Commercial Tax Class and 5.46 acres in the Farm Tax Class. The following table is an analysis of the two proposed comparable properties in support of the commercial portion of the land value for the Subject Property:

MPAC’s Sales Analysis (commercial value)

2 PROPOSED COMPARABLE PROPERTIES	LOT SIZE (acres)	SALE DATE	SALE PRICE	SALE PRICE (time adjusted)	SALE PRICE (adjusted per sq. ft.)
251 Rodinea Road	1.69	2015	$1,800,000	$1,919,285	$1,135,671
12370 Keele Street	0.87	2016	$1,000,000	$882,472	$1,014,335
Average	1.28	2015.5	$1,400,000	$1,400,878	$1,075,004
Subject Property	0.75	N/A	N/A	N/A	N/A

40Based on the above analysis, MPAC is of the view that the 0.75 acres of commercial land of the Subject Property would have a current value of $806,252 ($1,075,004 X 0.75 acres).

Appellant’s Evidence

41The Appellant presents no sales evidence in support of the value of the commercial portion of the site area on the Subject Property.

Findings on the value of the commercial portion of the site area of the Subject Property

42The Board finds that MPAC presents the best evidence of the current value of the commercial portion of the site area, based on two sales of similar commercial vacant lot. These two sales occurred in the open market in 2015 and 2016 (time adjusted to the valuation date of January 1, 2016) and sold for an average of $1,075,004 per sq. ft. When the time adjusted sale price is applied to the Subject Property, it results in a current value of $806,252.

43The Board finds that the Appellant presents no sales evidence in support of any commercial portion of the site area to assist the Board in its determination of current value. Therefore, the Board relies on the average time adjusted sale price of the two sales presented into evidence by MPAC.

MPAC’s Evidence

44The following table is an analysis of the one proposed comparable property in support of the farm portion of the land value for the Subject Property:

MPAC’s Sales Analysis (farmland value)

PROPOSED COMPARABLE PROPERTY	TOTAL RESIDENTIAL BUILDING AREA (sq. ft.)	YEAR BUILT	LOT SIZE (acres)	SALE DATE	SALE PRICE	SALE PRICE (time adjusted)
4283 King Vaughan Road	2,241	1963	10.1	2016	$900,000	$806,868
Subject Property	NIL	N/A	5.46	N/A	N/A	N/A

45MPAC submits that the above proposed comparable property is farmland with residential structures, consisting of a single-family detached dwelling, two sheds and an attached garage. In order to determine the apportionment value of the site area, MPAC deducts the value of $225,968 for the structures from the time adjusted sale to arrive at a residual land value of $580,900 ($806,868 – 225,968) or a sale price of $57,514 per acre. When the sale price per acre of $57,514 is applied to the Subject Property, it results in a value of $314,031 ($57,514 X 5.46 acres).

46Based on the above analysis of the sale of the proposed comparable property, MPAC is of the opinion that the current value of the farm portion of the site area of the Subject Property is $806,868.

47Based on all the evidence presented in support of current value, MPAC concludes that the correct current value is $1,278,000 (rounded) which is the sum of ($158,687 for the secondary structures + $806,252 commercial portion of the site area + $314,031 farm portion of the site area). However, MPAC is not seeking an increase in assessment and ask to have the returned assessment of $847,000 confirmed.

Appellants’ Evidence

48The Appellant presents no sales evidence in support of the value of the farm portion (5.46 acres) of the site area on the Subject Property. Instead, the Appellant presents the returned assessed value of six proposed comparable properties with different property codes to the Subject Property in support of the total site area of 6.21 acres.

49The Subject Property has a Property Code 220—Farm without residence—with commercial / industrial operations; and the description of the property codes for these six proposed comparable properties are as follows:

I. Property Code 200 – Farm property without any buildings and structures (two proposed comparable properties); II. Property Code 211 – Farm with residence – with or without secondary, with farm outbuildings; III. Property Code 221 – Farm property with residence – with commercial / industrial operations; and IV. Property Code 100 – Vacant residential land not on water (two proposed comparable properties).

50The following is an analysis of the returned assessment of the six suggested comparable properties presented by the Appellant in the table below.

Appellant’s Returned Assessment Analysis

6 PROPOSED COMPARABLE PROPERTIES	PROPERTY CODE	LOT SIZE (acres)	BUILDING AREA	YEAR BUILT	RETURNED ASSESSMENT
11650 Keele Street	200	8.98	NIL	N/A	$180,000
Keele Street	200	17.31	NIL	N/A	$336,000
12024 Keele Street	211	49.98	1,912	1900	$1,099,000
11244 Keele Street	221	15.12	2,512	1900	$1,163,000
11900A Keele Street	100	3.05	NIL	N/A	$597,000
Keele Street	100	1.92	NIL	N/A	$507,000
Subject Property	220	6.21	NIL	N/A	$847,000

51The above analysis shows that the returned assessment of these six proposed comparable properties ranges from $180,000 to $1,163,000.

52The Appellant argues that MPAC’s data cannot be relied because of mistakes. The Appellant references the above proposed comparable property located at 11650 Keele Street in the above analysis which the Appellant argues has a structure, although it was not assessed as such.

53Based on its analysis, the Appellant is of the view that the current value of Subject Property is $180,000, the lowest end of the range of assessments of the above six proposed comparable properties.

Findings on Direct Comparison Approach

54Reviewing the evidence presented in support of the farm portion (5.46 acres) of the site area of the Subject Property, the Board finds that MPAC presents the best evidence with the comparable property located at 4283 King Vaughan Road, sold in 2016 with a residual land sale price of $57,514 per acre. When the sale price per acre is applied to the Subject Property it results in a value of $314,031. The Board finds this sale represents the best evidence of market value between a willing buyer and willing seller pursuant to s. 19(1) of the Act.

55The Board rejects the Appellant’s evidence based on the returned assessment of six proposed comparable properties, because they are not similar to the Subject Property in property types (Property Code 100, 200, 211 and 221), lot sizes, building area, secondary structures and they were not sold. Instead, the Board relies on the sales presented into evidence by MPAC, because it reflects the best evidence of market value between a willing buyer and a willing seller.

56The Board also finds that the Appellant presents no factual evidence in support of its argument that the proposed comparable property located at 11650 Keele Street, has a structure on that property. Therefore, the Board puts no weight on this argument.

Issue 3 - Increase in assessment of 450 percent over period 2009 – 2020 taxation years

57The Appellant states that over the period 2009 and 2020 the returned assessment of the Subject Property has changed from a total assessment of $189,845 to $847,000 reflecting a 450 percent increase of that same period.

58The Appellant argues that MPAC’s assessment data is rife with errors and that MPAC provides no explanation for the increases in assessment for the above stated period. In support of this argument, the Appellant presents copies of Advisory Notice of Adjustment and Amended Property Assessment Notices received from MPAC for the period 2010 to 2020 taxation years to demonstrate the changes in assessment values for that same period.

59MPAC argues that these notices have no impact on the returned assessment of $847,000 and provide no relevant information for determining the correct current value of the Subject Property for the 2020 and 2021 taxation years.

Findings on Percentage Increase in Assessment Value

60In reviewing these notices presented by the Appellant, the Board finds that the notices provide no information that would assist the Board in its determination of current value for the 2020 and 2021 taxation years. Therefore, the Board puts no weight on these notices.

61The Board also rejects the Appellant’s argument that the returned assessment for the 2020 and 2021 taxation years increased by 450 percent. The reason being that assessment is not based on percentage increases, instead, it is based on a specific valuation date pursuant to s. 19.2(1)4 of the Act. The Act clearly states that the assessment of land shall be based on current value and that the valuation date for the 2017 and 2021 (extended due to COVID) taxation years is January 1, 2016.

62The Board finds that there are also market influences and/or changes to a property that can impact assessment values from one valuation date to another that must be taken into consideration. Therefore, current value must be proven through sales evidence at or around the valuation date. As stated above, the Board relies on the sales presented into evidence as the best evidence of current value between a willing buyer and a willing seller.

63Based on all the evidence in support of current value, the Board finds that MPAC presents the best evidence of the correct current value of $1,278,000 rounded. This correct current value represents the sum of ($158,687 value for Issue 1 - Secondary structures + $ 314,031 value for Issue 2a – portion of commercial land + $806,252 (value for Issue 2b – portion of farmland).

CONCLUSION

64Based on the evidence, the Board finds the correct current value for the Subject Property at the valuation date January 1, 2016 is $1,278,000. However, MPAC has not served a notice to seek a higher assessment as required by Rule 28 of the Board’s Rules of Practice and Procedure. Given that MPAC has clearly recommended that it is not seeking an increase for the 2020 and 2021 taxation years, the Board will therefore confirm the returned assessments at $847,000.

65The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.

ORDER

66The Board orders that the returned assessment of $847,000 be confirmed for the 2020 and 2021 taxation years. The following apportionment breakdown is also confirmed as stated:

I. Farm Tax Class $186,700 II. Commercial Tax Class $660,300