2272872 Ontario Inc. v. Municipal Property Assessment Corporation Region 18, 2022 CanLII 48462

Tribunals Ontario

Assessment Review Board

ISSUE DATE: June 02, 2022

FILE NO.: DM 178542

Assessed Person(s): 2272872 Ontario Inc.

Appellant(s): 2272872 Ontario Inc.

Respondent(s): Municipal Property Assessment Corporation Region 18

Respondent(s): City of St. Catharines

Property Location(s): 26 30 Ontario Street

Municipality(ies): City of St. Catharines

Roll Number(s): 2629-040-002-00600-0000

Appeal Number(s): 3309561, 3363120, 3408000, 3446814 and 3489537

Taxation Year(s): 2018, 2019, 2020, 2021 and 2022

Hearing Event No.: 766464

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

Parties	Representative
2272872 Ontario Inc.	James Brook
Municipal Property Assessment Corporation	Michael Radan
City of St. Catharines	Submissions not received

REQUEST FOR: An order amending the Schedule of Events

HEARD: May 4, 2022 in writing

ADJUDICATOR(S): Carly Stringer, Member

MOTION DECISION

OVERVIEW

12272872 Ontario Inc (the “Appellant”) asks the Assessment Review Board (the “Board”) to amend the Schedule of Events (“SOE”) to allow it one month to serve an expert report.

2The Municipal Property Assessment Corporation (“MPAC”) opposes this request.

3The City of St. Catharines has not made submissions on this motion.

Result

4For the reasons that follow, the Board grants the Appellant’s motion.

BACKGROUND

The Subject Property and Assessment

5The Appellant’s appeals relate to 26-30 Ontario Street in the City of St. Catharines (the “Subject Property”). The Subject Property is a five-storey multi-residential apartment building with retail on the first floor.

6MPAC returned a current value assessment of $7,932,000 for the Subject Property. The Appellant filed an appeal of this assessment with the Board for the 2017 taxation year, and appeals were deemed for the 2018 to 2022 taxation years pursuant to s. 40(26) of the Assessment Act, R.S.O. 1990, c. A.31.

Issues at the Subject Property

7On or about December 26, 2017, pipes burst on the 4th floor of the Subject Property, causing a flood. Subsequently, it was discovered that the Subject Property had asbestos and structural issues. The Subject Property became completely vacant on or about April 30, 2018, and remained vacant until July 12, 2021 when it was raised by fire.

8The Appellant had legal representation for the appeals. The Appellant provided its representative with information relating to the flood, asbestos, structural issues, and vacancy on February 13, 2020.

The Schedule of Events

9The appeals were assigned a Commencement Day of September 16, 2019. That day set all of the procedural due dates in these proceedings, as outlined in the SOE.

10The SOE required the Appellant to serve any expert reports on which the Appellant intends to rely at the hearing by June 14, 2021.

The Expert Report

11On June 24, 2021 – ten days after the SOE due date for the Appellant to serve its expert report – the Appellant’s representative communicated with MPAC asking for an extension to July 9, 2021.

12On June 28, 2021 – two weeks after the SOE due date for the Appellant to serve its expert report – the Appellant’s representative advised the Appellant that it would be required to obtain an expert report. On June 29, 2021, the Appellant’s representative sent the Appellant an engagement letter to procure an expert report, along with an invoice for a $7,500 expert fee requiring a 50% deposit.

13The Appellant paid the deposit to its representative on July 9, 2021.

14On July 15, 2021, the Appellant’s representative advised the Appellant that the expert “has essentially finalized her report” and presented the Appellant with a settlement offer from MPAC. The Appellant’s representative advised the Appellant that the expert and MPAC had a “miniscule difference” in position on value.

15The Appellant did not agree with MPAC’s offer due to the Appellant’s view of the condition of the Subject Property. The Appellant assumed the expert had not been aware of the flood, asbestos, structural issues, and vacancy. So, on or about July 26, 2021, the Appellant re-sent its representative information regarding the condition of the Subject Property so this could be used to finalize the report.

16There is no evidence regarding what transpired between late July 2021 and early February 2022. On February 3, 2022, the Appellant received communication from its representative regarding another settlement offer from MPAC.

17Again, the Appellant did not agree with MPAC’s offer. The Appellant elected to seek a second opinion.

18On March 9, 2022, the Appellant requested a copy of the expert report from its representative.

19In response, the Appellant was advised that the expert report – that was supposed to have been “essentially finalized” on July 15, 2021 – may not have been produced. The Appellant learned that its former representative did not procure, serve or file an expert report.

20The Appellant terminated its service agreement with its legal representative and hired a new representative.

21The hearing of these appeals was scheduled for March 28, 2022. The Appellant brought a motion asking the Board to amend the Schedule of Events to provide it with one month to produce and serve an expert report and, if necessary, amend its Statement of Issues (“SOI”). The Appellant also asked the Board to give MPAC additional time to respond.

ANALYSIS

Applicable Rules and Law

22The Appellant has brought this motion pursuant to Rule 40 of the Board’s Rules of Practice and Procedure (the “Rules”). Rule 40 provides that after the Commencement Day, the Board will not alter any due date set out in the SOE other than in exceptional circumstances.

23In relation to exceptional circumstances, “exceptional means, among other things, something that does not occur regularly, something unusual, or something atypical”: see Mississauga (City) v Michalakos, 2018 CanLII 126632 (ON ARB) (“Michalakos, supra”) at paragraph 10.

24Rule 3 confirms that the Rules “shall be liberally interpreted to ensure the just, most expeditious and least expensive determination of every proceeding.” Rule 4 provides that the Rules “shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding and with a view to resolving appeals within the assessment cycle.”

Issue 1 – Are there exceptional circumstances?

Submissions on Exceptional Circumstances

25The Appellant submits that its previous representative was negligent, which constitutes exceptional circumstances. The Appellant points to the fact that the previous representative did not address the flood or vacancy in the original SOI; and that the previous representative had a contract with the Appellant to provide an expert report which was not produced, served or filed in the proceeding.

26MPAC submits that the Appellant has not proven a breach of the standard of care, which is the legal standard that applies to prove that the Appellant’s former representatives were negligent. MPAC submits that while the Appellant may not have been happy with its former lawyer’s litigation strategy of negotiating a resolution of the appeals instead of serving an expert report, that does not amount to negligence and therefore there are no exceptional circumstances.

Findings on Exceptional Circumstances

27The Board finds that the circumstances in this case are exceptional, in the sense of being unusual or atypical. While it is not unusual for a party to seek alternate counsel mid-litigation, the current situation is more complex than that. In this instance, the Appellant has provided evidence that it provided its previous representative with information regarding the condition of the Subject Property; that it signed a contract with its previous representative to obtain an expert report; that it paid the requested amounts for its previous representative to obtain an expert report; that its previous representative said the expert’s report was “essentially finalized”; and that the Appellant discovered on March 9, 2022 – less than 20 days before the hearing of the subject appeals – that its previous representative had not obtained nor filed an expert report.

28The Board finds these circumstances, taken together, are unusual and atypical in the sense of being exceptional. While MPAC devoted most of its submissions to the fact that the Appellant has not proven that its former representative was negligent, the Board finds that the Appellant is not required to prove negligence, nor is the Board tasked with making a finding regarding professional negligence. The Appellant is required to satisfy the Board that there are exceptional circumstances. The Board is satisfied that there are.

Issue 2 – Should the Board amend the SOE?

29After the Board has found exceptional circumstances, it will consider the balance of prejudice to the parties in determining whether to amend the SOE: Michalakos, supra.

Submissions on Prejudice and Whether to Amend the SOE

30In this instance, the Appellant has provided evidence that its previous representative did not produce and file an expert report on its behalf and that without an amendment to the SOE, the Appellant will not have expert evidence before the Board in support of its case.

31MPAC has not provided affidavit evidence on this motion, therefore there is no evidence of prejudice to MPAC. That said, MPAC submits that it would be prejudiced by an amendment to the SOE as such an amendment would prolong the appeals. MPAC also submits that there is no evidence that the Appellant would be prejudiced.

Findings on Prejudice and Whether to Amend the SOE

32The Board finds there is clear prejudice to the Appellant if it were required to proceed to a hearing without expert evidence in support of its appeal.

33MPAC has not provided affidavit evidence supporting its claim of prejudice. The Board is prepared to accept that amending the SOE will delay the hearing of the subject appeals, however the Board finds there is no evidence of any further or specific prejudice to MPAC.

34Therefore, the Board has considered the balance of prejudice, and finds that it weighs in favour of granting the Appellant’s request to amend the SOE. MPAC will be provided additional time to respond to the expert report, which will mitigate any procedural fairness concerns. While there will be delay, this does not outweigh the prejudice to the Appellant of not being permitted time to obtain and serve an expert report, particularly given that the Appellant is not at fault for the circumstances. Moreover, the Appellant is seeking only one month from the date of this decision – this is an entirely reasonable timeframe and does not represent significant delay.

CONCLUSION

35The Board grants the Appellant’s motion to alter the deadlines in the SOE.

ORDER

36The Board orders that the SOE is amended as follows:

a. The Appellant is granted one (1) month from the issuance of this decision to serve on all other parties any expert reports on which the Appellant intends to rely at the hearing, as well as any amendment to the Appellant’s Statement of Issues to address any additional evidence or issues raised in an expert’s report.

b. All other subsequent due dates, including the timelines for the responding parties to serve expert reports, are to be adjusted accordingly.

c. The Board’s Case Coordinator will advise the parties of the specific due dates.