Tribunals Ontario / Tribunaux décisionnels Ontario

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

ISSUE DATE: June 1, 2022 FILE NO.: DM 173545

Assessed Person(s): Home Depot Holdings Inc. Respondent(s): Municipal Property Assessment Corporation Region 14, City of Vaughan Property Location(s): 140 Northview Boulevard, 55 Cityview Boulevard Municipality(ies): City of Vaughan Roll Number(s): 1928-000-230-36000-0000, 1928-000-270-92389-0000 Appeal Number(s): 3228705, 3301416, 3357783, 3404195, 3228706, 3303146, 3356812 and 3404006 Taxation Year(s): 2017, 2018, 2019, 2020, 2021 and 2022 Hearing Event No.: 737380 Legislative Authority: Rule 37 of the Assessment Review Board’s Rules of Practice and Procedure

Parties and Counsel/Representative:

• Home Depot Holdings Inc.: Ian Andres and Mark Blidner
• Municipal Property Assessment Corporation: Karey Lunau and Calvin Ho
• City of Vaughn: Jaroslaw Wowk

REQUEST FOR: Allow witness testimony on the hearing of these appeals HEARD: January 6, 2021 in writing ADJUDICATOR(S): Dirk VanderBent, Vice-Chair

MOTION DECISION

OVERVIEW

1Home Depot Holdings Inc. (“the Appellant”) are the owner of two properties located at 140 Northview Boulevard, Vaughan and 55 Cityview Boulevard, Vaughan (“the Subject Properties”), and has filed an appeals pursuant to s. 40 of the Assessment Act, S.O. 1990, c. A.31 (the “Act”) for the 2017 taxation year. The ground of this appeal is that the current value of the Subject Property, which was determined by that the Municipal Property Assessment Corporation (“MPAC”) in its general reassessment of the current value of the Subject Property (“General Reassessment Value”), is too high, and, therefore, is incorrect. The specific issues raised by the Appellant are that MPAC in valuing the Subject Properties MPAC erred by overstating:

a) the replacement cost of the building component of the valuation, in the application of the cost manual used to derive such value;

b) the land component of the valuation, having regard to the sale of comparable land parcels and the appropriate adjustments that need to be made for time, size and location; and

c) the site improvement component of the valuation.

2Pursuant to the deeming provision under s. 40(28) of the Act, appeals have been deemed for the 2018 to 2022 taxation years. Under the Act, MPAC and the City of Vaughn (the “City”) are parties to this proceeding.

3The Assessment Review Board (“Board”) designated that this appeal proceeding be heard by General Proceeding and assigned a Commencement Date and associated Schedule of Events, which sets out the due dates for several steps in the parties pre-hearing exchange of disclosure and pleadings. In the regard, it is not disputed that the City was required to serve its Statement of Response by March 5, 2019, but did not do so until April 9, 2019. Furthermore, it is not disputed that the City did not serve any expert reports by the required due date set out in the Schedule of Events.

4However, the City has indicated that it intends to call a witness, Aaron Zamler, who would provide oral testimony with respect to the three (3) land sales relied upon by the City, which equate to a median time-adjusted sale price of $1,714,187 per acre, and that the analysis and documents relied upon have been attached to the City’s Statement of Response. In this regard, the City indicates that this analysis is a comparable sales analysis in which Mr. Zamler identified seven land sales which he excluded from consideration, providing specific details of his reasons for doing so.

5Under Rule 35 of the Board’s Rules of Practice and Procedure (“Rules”) (Rule 37 under the version of the Board’s Rules in force at the time), a party is required to file all documents in intends to rely on at the hearing, which includes witness statements and expert reports, by the filing due date set out in the Schedule of Events. It is not disputed that the City did not do so.

6As the parties were unable to resolve the issues in this appeal proceeding, the matter proceeded to a Settlement Conference. At the Settlement Conference the City stated it position that it would call Mr. Zamler to orally testify respecting the information provided in the City’s Statement of Response. As both the Appellant and MPAC objected, the Board Member who conducted the Settlement Conference directed that the City should bring a motion requesting an order that the City be granted leave to call its witness.

RESULT

7The City may raise the issues in its Statement of Response at the hearing, but the City cannot call its witness, Mr. Zamler, to give evidence at the hearing. The Board will accept late filing of the City’s Statement of Response.

ISSUES

8The Issues to be addressed in this Motion Decision are:

1. Does the Board require opinion evidence to be provided by an expert witness?

2. Is the City required to file a witness statement for its proposed witness Aaron Zamler?

3. Should the City’s Statement of Response be excluded from the Board’s records?

9While the Board has reviewed all the parties’ submissions in detail, for purposes of this Motion Decision, the Board provides a synopsis of only the most salient submissions.

10The Board’s current Rules came into force on April 1, 2020. In terms of the City’s compliance with the Board’s Rules, the previous version of the Board’s Rules would apply. The Board notes that the current Rules made no substantive change in the former Rules applicable in the circumstances of this case. The Board will refer to the Rule numbers under the former Rules.

ANALYSIS

Issue 1: Does the Board require opinion evidence to be provided by an expert witness?

Submissions

City’s submissions

11The City relies on the decision of the Supreme Court of Canada in Graat, v. The Queen, 1982 CanLII 33 (SCC), [1982] 2 SCR 819 (“Graat”), asserting this decision is the leading authority pertaining to the admissibility of opinion evidence by a non-expert witness or lay witness. In performing this analysis, the Supreme Court of Canada considered the following four factors:

i. the witness has personal knowledge of observed facts;

ii. the witness is in a better position than the trier of fact to draw the inference;

iii. the witness has the necessary experiential capacity to draw the inference, that is, form the opinion; and

iv. the opinion is a compendious mode of speaking and the witness could not as accurately, adequately and with reasonable facility describe the facts she or he is testifying about.

12The City submits that applying a complex and overly legalistic approach to the admissibility of opinion evidence runs against the very reason for establishing an administrative tribunal like the Board in the first place.

13The City submits that the Board is not bound by strict common law rules of evidence and is not required to undertake a rigorous review of whether opinion evidence is admissible by an expert witness or non-expert witness. In this regard, the City emphasizes that, pursuant to s. 15 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”), the Board, as an administrative tribunal may admit any oral testimony relevant to the subject matter of the proceeding, whether or not it is admissible in a Court.

14The City submits that the opinion evidence of any witness should go the weight to be given to that evidence rather than its admissibility, and that the Board may admit any evidence as long as it is relevant to an issue in dispute.

MPAC's submissions

15MPAC submits that this issue is not relevant to the request by the City to admit its late material, late witness statement and witness testimony, and for this reason, the Board need not consider this question.

Appellants’ submissions

16The Appellant submit that the Rules clearly and deliberately carve out a special function for expert reports and distinguish such evidence from the factual non-opinion evidence that may be provided by a lay witness, noting that Schedule C to the Board’s Rules requires that an experts confirm that they will provide:

a. opinion evidence that is fair, objective and non-partisan;

b. opinion evidence that is related only to matters that are within their area of expertise; and

c. such additional assistance as the Board may reasonably require, to determine a matter in issue.

17Regarding the specific evidence Mr. Zamler would provide, the Appellant states that he would testify regarding the price at which another property sold, which may be properly characterized as factual evidence within the realm of what a lay witness can provide. However, the Appellant maintain that any attempt to analyze or adjust that sale price, so as to opine as to the relevance or utility of the allegedly comparable sale in determining the correct current value of the subject property, is outside of the capability of a lay witness. The Appellant further note that, if Mr. Zamler’s testimony is to be factual only, it is unnecessary and redundant, as the sales identified by the City are already reported in the expert reports to be adduced into evidence by the other parties.

Findings on Issue 1

18The Board begins by noting that, under the laws of evidence, giving opinion evidence is an exception to the general rule that a witness may only testify as to facts. For this reason, a witness is only permitted to provide opinion evidence in circumstances where the judge or adjudicator requires the opinion of a person who possesses special knowledge, training or experience, in order to determine the issues in dispute. The decision in Graat only allows a fact witness to express an opinion in limited circumstances where a witness “could not as accurately, adequately and with reasonable facility describe the facts she or he is testifying about.” Given the nature of the evidence which the City proposes that Mr. Zamler would provide, namely, a comparable sales analysis of land value, he would clearly be providing opinion evidence that falls far beyond such limited circumstances. Furthermore, as the Appellant have pointed out, if Mr. Zamler’s evidence were restricted to purely factual information, his evidence would be unnecessary, as that information will be adduced by MPAC and the Appellant.

19The City has correctly pointed out that, pursuant to s. 15 the SPPA, the Board may admit relevant oral testimony whether or not it is admissible in a Court. However, this section does not require that the Board must do so. Section 25.0.1 provides that the Board can control its own process and s. 25.1 provides that the Board has the power to determine its own procedures and practices that apply in any particular proceeding, and to make its own rules governing that practice. The Act, itself, confirms that issue of “current value” requires opinion evidence (see s. 32(1.1) which refers to an “opinion as to current value”). Therefore, as the Appellant has pointed out, the Rules recognize that such evidence includes opinion evidence, and the witness giving such opinion evidence is described as a “expert witness” who must sign a special Acknowledgement of the Expert’s Duty. In order to give such opinion evidence, the witness must establish that he or she has the requisite training, education, or experience to be qualified to give such evidence. The Board’s Rules also provide that the experts evidence must be provided in a written report and served on all other parties by the applicable due date set out in the Schedule of Events.

20For the above reasons, the Board does not accept the City’s assertion that all of the requirements under the Board’s Rules respecting an expert’s opinion evidence can or should be by-passed on the basis that any witness can appear at hearing to give oral testimony, in which the witness is entitled to give opinion evidence.

Issue 2: Is the City required to file a witness statement for its proposed witness Aaron Zamler?

Relevant Rules

21Rule 1 states:

“witness statement” means a written outline of the evidence a person is likely to provide at a hearing event, including a list of all documents that person will rely upon;

22Rule 37 states:

37. On or before the filing deadline set out in the schedule of events for a proceeding, each party must file all materials that they intend to rely on at a hearing event, including:

38. all evidence, including expert reports;

39. statements of issues and responses; and

40. witness statements.

[emphasis added]

23Rule 82 states:

Dates Fixed

82. After the day set in Rule 33 as the start of a proceeding the Board will not alter any timeline set out in the schedule of events, other than in exceptional circumstances.

24The Schedule of Events for a General Proceeding, Weeks 101 to 104 state:

If, after the completion of the additional exchange of expert reports, the Parties are still unable to resolve the appeal, each party shall file with the Board:

i. its amended SOI, Statement of Response, and Reply (as the case may be);

ii. all documentary evidence, witness statements and expert reports on which the party intends to rely if the matter proceeds to mediation or a hearing; and

iii. its Settlement Conference Brief.

iv. On the consent the parties, the parties may submit a request in writing to the Board to conduct a mediation before the Settlement Conference. If the appeal is not resolved at the mediation, the mediator will then immediately proceed to conduct the Settlement Conference.

[emphasis added]

25Rule 50 states:

50. An expert report shall contain the following information:

(a) the expert’s name, address and area of expertise;

(b) the expert’s qualifications, employment, and educational experiences in his or her area of expertise;

(c) the instructions provided to the expert in relation to the proceeding;

(d) the nature of the opinion being sought and each issue in the proceeding to which the opinion relates;

(e) the expert’s opinion respecting each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert’s own opinion within that range;

(f) the expert’s reasons for his or her opinion, including,

i. A description of the factual assumptions on which the opinion is based,

ii. A description of any research conducted by the expert that led him or her to form the opinion, and

iii. A list of every document, if any, relied on by the expert in forming the opinion; and

(g) an acknowledgement of expert’s duty, signed by the expert, in the form attached as Schedule C to these Rules.

26The Board’s Practice Direction on Settlement Conferences (“the Practice Direction”) states:

Once the settlement conference has concluded and the appeals have not resolved, the Presiding Member will give procedural directions for the scheduling of the hearing, the exchange of witness statements, and any other directions to ensure the just, most expeditious and least expensive determination of every proceeding. [emphasis added]

Submissions

27The City states that it advised all parties at the settlement conference that it did not serve and file an expert report or witness statement because it does not intend to rely on such documents at the hearing. Instead, the City confirmed that it will only rely on its Statement of Response.

28The City of Vaughan submits that Rule 37 is not restrictive or prohibitive in the context of preventing a witness from providing oral testimony at a hearing. More specifically, the City argues that Rule 37 makes no reference to a witness not being permitted to provide oral testimony at a hearing if a witness statement is not exchanged and filed with the Board.

29The City submits that a compulsory requirement for a witness statement to have been exchanged in order for a witness to be permitted to give oral testimony at a hearing cannot be implied by the language found in Rule 37.

30The City alternatively submits that if a witness statement must be exchanged for a witness to be permitted to give oral testimony at a hearing, this condition could be made by way of a procedural order at the settlement conference. In support of this submission, the City cites the Practice Direction described above.

31Alternatively, if the Board deems that a witness statement must be exchanged in order for Mr. Zamler to be permitted to provide oral testimony at the hearing, the City requests permission to file the witness statement which the City has included in the evidence filed in support of this Motion. The City states that this witness statement confirms that Mr. Zamler will only provide oral testimony pertaining to the land value issue.

32The City disagrees with the Appellant’s assertion that opinion evidence can only be provided by an expert witness in an assessment appeal before the Board.

33In support of the above submission, the City asserts that, by its very nature, every assessment appeal, from the simplest residential home to the most complex industrial building, requires a party to put forward its “opinion of value.” The City maintains that this “opinion of value” is based on a combination of facts and opinions, stating, however, that the distinction between “fact” and “opinion” is often unclear. The City notes that the Appellant asserts that a non-expert can be called to provide factual evidence, but any attempt to analyze or opine on those facts can only be done by an expert. The City respectfully disagrees and submits that adopting such a strict approach to the admissibility of evidence would produce absurd consequences which cannot be understated. The City states that the most obvious consequence is that this would require an expert witness to be retained for every assessment appeal given that every assessment appeal requires a party to put forward its “opinion of value” before the Board.

MPAC's Submissions

34MPAC relies on Rule 37, and the decision of the Board in Municipal Property Assessment Corporation, Region 9 v Toronto (City), 2019 CanLII 32438 (ON ARB) (“Canadian Tire”), which applied this Rule, in support of its position that a party cannot call a witness to testify at a hearing if a witness statement has not been served on the other parties by the required due date set out in the Schedule of Events. MPAC further submits that Rule 82 provides that the City can only obtain an extension of the due date for serving a witness statement if the City demonstrates that there are exceptional circumstances, arguing that there are no exceptional circumstances in this case.

Appellant’s Submissions

35The Appellant similarly relies on Canadian Tire. Regarding exceptional circumstances, the Appellant further relies on Kitchener (City) v Municipal Property Assessment Corporation, Region 21, 2019 CanLII 91491 (ON ARB) where the Board stated, at paragraph 25:

The circumstances that are exceptional in this case were entirely caused by the City’s failure to monitor the timelines that were assigned to the appeals. A party should not be successful in arguing that there are exceptional circumstances pursuant to Rule 33 when those circumstances were caused by their own carelessness.

Findings on Issue 2

36The Board begins its analysis by considering the City’s disagreement with the Appellants’ assertion that opinion evidence can only be provided by an expert witness in an assessment appeal before the Board.

37In addressing this submission, the Board re-iterates its earlier analysis in its findings in Issue 1 regarding the rules for admitting opinion evidence. For this reason, the Board observes that the Appellant’s statement is correct.

38In making the above observation, the Board acknowledges that it may exercise its discretion to waive the requirement that a witness, who does not have the training, education or experience to opine on a specific matter, (often described as a “lay witness”) cannot give opinion evidence. In such cases, the Board allows the lay witness to state his or her views, which includes the expression of an opinion. This often occurs in Board appeals heard by way of summary proceeding where an appellant is self-represented. However, it is an exception that is not permitted in appeals being heard by way of general proceeding, as stipulated in the Board’s Rules, Rule 50 in particular, which is discussed in greater detail below.

39The City has also submitted that it is questionable whether the Board will require expert opinion evidence in the subject appeals pertaining to the correct land value of the subject properties. The City maintains that there is nothing special or unique about the subject lands and the Board possesses the requisite knowledge and specific expertise in utilizing the direct comparison approach to determine the correct land value of the subject properties. The City asserts that the Board is proficient and experienced in determining the comparability of similar properties and drawing the appropriate conclusions to establish a correct land value of a property.

40In addressing this submission, the Board observes that it is, in effect, simply a different way of saying the Board should exercise its discretion to allow Mr. Zamler to provide opinion evidence as a “lay witness.” Again, the Board’s Rules make it clear that the Board, in controlling its process, has implemented the practice where, in an appeal heard by way of general proceeding, it requires that a witness must be qualified to give opinion evidence on property valuation issues.

41Turning now to the circumstances of this case, the Board confirms that the City’s Statement of Response and a proposed witness statement for Mr. Zamler were submitted as evidence in support of this Motion. The City, itself, has characterized the evidence to be given by Mr. Zamler as a “comparable sales analysis’ which is a property valuation methodology. A review of the detailed information provided in the City’s Statement of Response, clearly confirms that (i) this evidence contains opinion evidence; and (ii) as the evidence constitutes a comparable sales analysis, the opinion qualifies as expert opinion to which Rule 50 applies. Consequently, if City intended to call Mr. Zamler to give expert opinion evidence at the hearing, it was required to serve an expert report in compliance with Rule 50. The City has not done so.

42In reaching this conclusion, the Board does not accept that the City’s submission characterizing Mr. Zamler’s evidence as a “witness statement”, in some way indicates that Rule 50 does not apply. In this regard, the Board notes that an expert’s report qualifies as a “witness statement” as defined in Rule 1. Rule 50 imposes additional requirements in cases where the witness will provide opinion evidence.

43Regarding the City’s reliance that the “evidence” was included in its Statement of Response, the Board observes that a Statement of Response is not evidence. Instead, it is a statement of a party’s’ position on the issues to be addressed in an appeal proceeding. Furthermore, the information provided in the Statement of Response does not satisfy most of the requirements set out in Rule 50. Therefore, simply stating the information in its Statement of Response is not sufficient.

44The Board observes that the City has obviously failed to produce a report that is compliant with Rule 50, let alone to file such a report by the required due date under the Schedule of Events. Furthermore, the City has failed to establish any exceptional circumstances which would justify extending any of the due dates in the Schedule of Events to allow the City to prepare and serve an expert report.

45Regarding the Practice Direction, the Board first observes that a practice direction cannot be interpreted to contradict the provisions of the Board’s Rules. There may be circumstances in which the late exchange of an additional witness statement would be required, but that is not the case here, where the witness would be giving opinion evidence requiring expertise in property valuation.

46In summary, the City was required to serve an expert report that complied with Rule 50, which also serves as Mr. Zamler’s witness statement. The City has not done so. Furthermore, the City has not provided any grounds on which the Board can find that there are exceptional circumstances to warrant extending the relevant due dates to allow the City to serve an expert report. Consequently, pursuant to Rule 82, the City is prohibited from calling Mr. Zamler as a witness at the hearing.

Issue 3: Should the City’s Statement of Response be excluded from the Board’s records?

Findings on Issue 3

47It is not disputed that the City served its Statement of Response on April 9, 2019, whereas the applicable due date in the Schedule of Events was March 5, 2019. Similarly, under the Schedule of Events, all documents to be relied on at the hearing were to be filed by the Board by August 11, 2020, but the City did not file them until October 8, 2020, just one week prior to the Settlement Conference scheduled and conducted on October 19, 2020.

48MPAC’s adopts the position that the balance of prejudice favors allowing the Statement of Response even though it was filed late, because the Statement of Response was properly served on MPAC and the Appellant within a month of the service deadline in mid-2019. MPAC states that the prejudice to MPAC and the Appellant is small as they were aware of the arguments and evidence tendered in the Statement of Response and have prepared their cases accordingly. MPAC cites, for example, that the Appellant filed its Reply to the City’s Statement of Response as part of the materials before the Board. MPAC submits that, on the other hand, prejudice to the City would be large, as excluding the Statement of Response could essentially hamstring the City’s participation in these appeals.

49The Appellant’s submission focusses on the City’s failure to serve any expert reports or witness statements by the filing due date. Although the Appellant states that the City did not serve its Statement of Response by the applicable due date, the Appellant did not provide any specific submissions on this issue.

50In light of the response submissions, the Board concludes that the City’s delay in filing the Statement of Response is not a disputed issue which the Board must address in this Motion.

51While the City failed to file its documents to be relied on at the hearing by the required due date, the City did file them before the Settlement Conference, and, as noted in its submissions, the other parties were aware of the City’s Statement of Response, and the Appellant had responded to it in the Appellant’s reply, so the late filing with the Board did not delay or interfere with the conduct of the settlement conference.

52For these reasons, the Board accepts the filing of the Statement of Response. However, for the sake of clarity, the effect of accepting the Statement of Response is only to allow the City to raise the issues in its Statement of Response at the hearing. The Board re-iterates that the contents of the Statement of Response are not evidence.

ORDER

53The City may not call its witness, Mr. Zamler, to give evidence at the hearing.

54The Board will accept the late filing of the City’s Statement of Response.