C.G. v. City of London, 2022 CanLII 12798

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 17, 2022

FILE NO.: WR 176592

Assessed Person: C.G.

Applicant: C.G.

Respondent: City of London

Property Location: Address Withheld

Municipality: City of London

Roll Number: Roll Number Withheld

Appeal Number: 3464655

Taxation Year: 2019

Hearing Event No.: 760864

Legislative Authority: Section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties

Representative

C.G.

Self-represented

City of London

James Edmunds

HEARD: February 14, 2022 by telephone conference call

ADJUDICATOR: Jean-Paul Pilon, Member

DECISION

OVERVIEW

1C.G. (the “Applicant”) filed an application with the City of London (the “Municipality”) pursuant to section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Act”). This provides that “upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of the taxes levied on land in the year in respect of which the application was made if the applicant is unable to pay taxes because of sickness or extreme poverty.”

2The property taxes levied on the Applicant’s land for the 2019 taxation year were $1,939.98. They were paid in full, therefore the remedy requested in this application was for a refund of taxes paid.

3Pursuant to section 357(11) of the Act, the Municipality authorized the Assessment Review Board (the “Board”) to exercise the powers and functions of the municipal council in deciding these applications.

4This application was dismissed and then reinstated pursuant to a reinstatement decision issued on August 26, 2021 in file number RR 21-011. After this application was reinstated, the Board released a procedural order, DM 175044 issued on November 22, 2021 (the “Procedural Order”) which, among other things, set out the documentation that the Applicant was to file prior to the new hearing of the application.

Background

5The Applicant lived with his two minor children at the property against which the 2019 taxes at issue in this proceeding were levied (the “Property”). The Applicant testified that during the 2019 taxation year he was an undischarged bankrupt, although no documentation was filed to support that submission.

Issue for the Hearing

6The single issue to be determined in this proceeding is whether the Applicant was unable to pay taxes because of extreme poverty in the 2019 taxation year.

Result

7This application is dismissed.

ANALYSIS

8At the hearing, the Applicant provided evidence as to his income, expenses, assets and liabilities for the 2019 taxation year.

Income

9The Applicant testified that his income in 2019 came from Ontario Works, HST rebates and what he termed “baby bonus” which he said was not shown on his CRA Notice of Assessment indicating a total income of $16,234. The Applicant testified that he received no support from the mother of his two children over which he had custody, nor did he receive any spousal support.

10The Applicant testified that his total income for 2019 was $23,766. However, in printouts filed for a single bank account showing deposits and withdrawals for 2019, the Board calculated the total deposits in 2019 to be $27,374.85.

11The Applicant did not file any further documentation to support his evidence of a lower income, therefore, based on the banking printouts, the Board finds that his income was $27,374.85. It was not argued that any of this income shown in the bank printouts was attributable to the 2018 or 2020 taxation years.

Expenses

12The Procedural Order required the Applicant to file detailed evidence of all of his monthly expenses in 2019. He did this to an extent, filing a mortgage statement showing payments made during the year, a hydro bill with an amount owing for October, 2019 and balance outstanding of $1,172.45, a statement for a line of credit and an invoice for property insurance. Although the Applicant did testify as to amounts he paid for a number of monthly expenses for utilities, food, phone, internet and so on, with the exception of the above, none of these were supported by the documentation that was set out in the Procedural Order.

13Specifically, the Applicant testified that he spent around $200 per month on electricity, $300-400 per month on food, $50 per month for pre-paid telephone fees, $100 per month for clothes, $60 per month for internet, $200 per month for home and vehicle insurance and $200 per month on gas. The Municipality’s representative testified that the Applicant’s total expenses were different in the bank printouts and that they amounted to $14,568 per year. However, this provided no explanation for the Board’s calculation of total expenditures of $25,928.76 for the year shown on the bank printouts.

14The Municipality took the position that there were discretionary expenses in the Applicant’s bank printouts for fast food and alcohol, but it did not itemize which ones it thought were unreasonable at the hearing. As a result, the Board makes no specific findings regarding any of these expenses.

15However, the Board finds that the banking records provided the best and most precise evidence of the Applicant’s expenses in 2019. These totalled $25,928.76.

Assets

16The Applicant’s primary asset was the Property. The Municipality argued that the Applicant had equity available in the Property that should have been used to pay the 2019 taxes.

17The Applicant testified that the value of the Property was $165,000 based on a 2018 appraisal obtained when he acquired it through a private sale from his parents. The Municipality argued that this was not an arms-length transaction and that the purchase price could not be relied upon. Its representative testified that houses in the same neighbourhood as the Property transacted at an average price of $272,000 in 2019 and argued that the Property should be determined to be have had a value of that amount. The 2016 assessed value of the Property, on the other hand, was $147,000.

18Following its precedent in T.I. v Toronto (City), 2020 CanLII 24875 (“T.I.”) at para. 25, the Board finds that the value of the Property for the purpose of determining this application to be its assessed value $147,000. Additionally, the Board accepts the Applicant’s submission that he could not have accessed any equity in the property as an undischarged bankrupt in 2019. However, for the reasons below, the Board also takes into account that the Applicant applied for and obtained a further mortgage against the Property in 2020 to pay the 2019 taxes after his bankruptcy was discharged.

19The Applicant testified that his only other significant asset was his car, worth around $2,000. He testified he also had a locked in pension from previous employment and an RSP valued at $100.

Liabilities

20The Applicant’s mortgage had a balance of $123,394 at the end of 2019. He owed $8,605.18 on his line of credit from which he could not draw more funds. He also testified he was required to pay his bankruptcy trustee $90.00 per month.

Inability to Pay

21As indicated above, the Board is satisfied that it was not open to the Applicant to access any equity in his property in 2019 due to bankruptcy proceedings. The Board also accepts that as an undischarged bankrupt, the Applicant could not have borrowed to pay for his taxes in 2019.

22As noted above, the Applicant’s documentation at the hearing was not in accordance with the Procedural Order. The only reliable way of confirming his income and expenses was through his bank printouts.

23These disclosed funds in of $27,374.85 and funds out of $25,928.76, leaving an outstanding balance of $1,446.09 where the taxes for 2019 were $1,939.98. The Board finds that $1,446.09 could have been applied to taxes.

24The only question to be determined then is whether the Applicant should be refunded the difference of $493.89.

25As noted earlier, the taxes for 2019 were paid. The Applicant testified that the funds to pay the taxes came from a mortgage also referred to above that he arranged after his bankruptcy was discharged in 2020.

26Should the Board determine that the Applicant was unable to pay taxes when he did pay them by accessing the equity of the Property the year after the taxation year at issue?

27In M. M. U. v Toronto (City), 2015 CanLII 46826 (“M.M.U.”) at para. 21, the Board wrote that:

In order to qualify under this section of the Act, the Applicant is required to show that every reasonable effort has been made to pay all or part of the taxes. There is an expectation that to qualify for relief under this section of the Act the condition cannot be one where an individual simply cannot make ends meet but amounts to a situation where the Applicant after having called upon every resource available to him and having applied every reasonable means to mitigate and manage his expenditures is left with no means of being able to pay some or all of their property taxes.

28In this case the Applicant was able to mitigate his damages as directed in M.M.U., not in the taxation year in question but the year after when it was open to him to do so. In T.I., an applicant also argued for a refund of taxes that had been paid. The applicant in that case “demonstrated that he made every reasonable effort to pay his property taxes…(and) went without many of the basic necessities of life including medication” at para. 53, and was granted the refund of taxes that he requested. This case, however, is distinguishable because even though the Applicant testified that he had no money to pay for a leaky roof in 2019, it was not because he used the same money to pay taxes because they were not paid at that time.

29Instead, the Applicant was able to call upon the resources that were available to him by accessing the equity of the Property when he was able to do so to pay the taxes in question. The Board finds that it cannot have been the intention of the legislation that a refund should follow in a situation where an applicant managed to mitigate his damages, simply because that mitigation occurred after the taxation year in question. The Applicant did what would have been expected of him in the circumstances by accessing the equity of his home to pay the taxes. Requiring the Municipality to refund some of those taxes, effectively passing that burden on to other taxpayers after the Applicant was able to extinguish it using his own resources, would be an absurd result in these circumstances.

30The Board therefore finds that the Applicant was not unable to pay his taxes for the 2019 taxation year.

31As a result, since there was no inability to pay, no determination of extreme poverty is required.

CONCLUSION

32The Board finds that the Applicant was not unable to pay taxes for the 2019 taxation year.

ORDER

33The Board orders that this application is dismissed.