Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière
ISSUE DATE: August 02, 2022 FILE NO.: WR 180348 Assessed Person(s): A.R.Q.; N.P. Applicant(s): N.P. Respondent(s): City of Hamilton Property Location(s): Address withheld Municipality(ies): City of Hamilton Roll Number(s): Roll number withheld Appeal Number(s): 3491956 Taxation Year(s): 2021 Hearing Event No.: 768064
Legislative Authority: Section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25
APPEARANCES:
Parties / Representative N. P. / A. R. Q. (Self-represented) City of Hamilton / Linda Nimako
HEARD: July 6, 2022 by telephone conference call
ADJUDICATOR(S): Pierre R. Lavigne, Member
DECISION
OVERVIEW
1N.P. (“the Applicant”) filed an application to the City of Hamilton (“City”) to have 2021 property taxes cancelled, reduced, or refunded because she and A.R.Q. (the “co-owner”) were unable to pay, due either to sickness or extreme poverty. This application was made under s. 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Act”).
2The City has passed a by-law delegating its authority to determine such applications to the Assessment Review Board (the “Board”).
Issues for the Hearing
3The main issue before the Board is whether the Applicant and the co-owner’s 2021 property taxes should be cancelled, reduced or refunded due to their inability to pay because of sickness or extreme poverty. This requires the Board to determine:
- if the Applicant and her co-owner were unable to pay their 2021 property taxes; and
- if the Board determines they were unable to pay their property taxes, the Board must then determine if the reason they were unable to pay was either sickness or extreme poverty.
- Finally, if the Board determines that they were unable to pay because of sickness or extreme poverty, the Board must then decide on the amount of the property taxes levied in 2021 to be cancelled, reduced or refunded.
Result
4The Board finds that the Applicant and A.R.Q., her co-owner at the time of the 2021 property tax assessment, did not establish that they were unable to pay the property taxes levied in 2021. The application is dismissed.
ANALYSIS
Issue 1 – Were the Applicant and her co-owner able to pay the property taxes levied in 2021?
5The Applicant N. P. is the spouse of A.R.Q. At the time the 2021 taxes were levied, they were co-owners of the property and were jointly assessed the property tax liability. In July of 2021, A.R.Q. transferred his interest in the family home to his spouse N.P. The Applicant did not appear at the hearing and A.R.Q. testified on behalf of the family. Further testimony was provided by his son, H.Q. a young adult in post-secondary studies, residing at the family home.
6A.R.Q. testified that the claimed inability to pay property taxes arises from debts incurred to satisfy a Judgement of the Superior Court of Ontario in the amount totaling $377,000, including interest and costs. More will be said about this judgement when dealing with liabilities.
2021 Property Taxes
7Property taxes levied in 2021 totaled $5,784.85. These were paid in full in 2021. Payment of taxes does not disqualify for relief under s. 357 of the Act as the section authorizes reduction and refund of taxes if the Applicant is able to establish inability to pay because of sickness or extreme poverty.
Household Income for 2021
8A.R.Q., the spouse of the Applicant, is presently 62 years old. He testified that he works seven days a week as a security guard, with an annual income of $48,707. The Applicant’s income for 2021 was $16,376. The total household income for 2021 was $65,083, on average $5,423 per month.
9The 2021 income of H.Q. was $21,639. This income is allocated to tuition, Ontario Student Assistance Plan loan repayments and employment search expenses as H.Q. is graduating shortly and incurring employment search expenses. Accordingly, the Board will not be considering this income as a contribution to the household income.
Household expenses for 2021
10The evidence disclosed total household expenses to average $3,470 per month, not including repayment of the debt incurred to satisfy the Ontario Superior Court judgement of $377,000. The surplus household income is an average of $1,953 per month.
Assets
11The principal asset of the Applicant and A.R.Q. is the mortgage-free family home, which was assessed at $523,000, the current value at January 1, 2016. There is no evidence of the value in 2021. A.R.Q.’s interest in the family home was transferred to his spouse N.P. in July 2021 for $0. There is a joint chequing account with an average balance of $6,000. Total assets are $529,000.
Liabilities
12A.R.Q. borrowed $5,000 from his daughter to maintain the chequing account above the minimum required to avoid monthly service fees. Other regular liabilities are a Home Depot credit card balance of $3,461 and a Fairstone Credit Card of $2,165. The family home is mortgage free.
The Ontario Superior Court Judgement
13In addition to the above liabilities, A.R.Q.’s financial difficulties arise from a 2019 judgement of the Ontario Superior Court of Justice against him personally in the amount of $210,000, plus interest and costs. The cost liability of A.R.Q. to the successful plaintiff was fixed at $133,500. The Court also ordered, pursuant to ss. 173(1) and 172(2) of the Bankruptcy and Insolvency Act, that the liability for the judgement and the cost order was to survive any bankruptcy of A.R.Q.
14A.R.Q. indicated that his total liability, including interest, as a result of this judgement amounted to $377,000. He states that he, with some contribution from a co-defendant, has satisfied this judgement liability in full. He did this by borrowing money from relatives to pay the judgement. As a result, he states he now owes $300,000 to Relative 1 and a balance of $24,000 to Relative 2. He originally borrowed $66,000 from Relative 2 and has paid back $42,000. He indicates that was repaying Relative 2 at the rate of $2,000 to $3,000 per month, but that is now reduced to between $500 and $1,000 per month.
Findings on Issue 1
15The Applicant and A.R.Q. were able to pay their property tax in full for 2021. While A.R.Q’s total remaining debt burden exceeds his annual income, this did not affect his ability to pay 2021 property taxes. After payment of property taxes and normal household expenses there was income available to service the loans incurred to satisfy the Judgement of the Superior Court.
16The municipality argued that it was not for other municipal taxpayers to subsidize the payment of the property owner’s debts or expenses beyond normal minimum household expenses. As property taxes are a charge against the property, they must be paid in priority to other debts other than normal minimum household expenses if the Applicant is to prevent sale of the property for unpaid taxes.
17The Board agrees with the municipality that so long as the total of currently available household assets and income exceed the total of normal minimum household expenses and property taxes, there is still ability to pay property taxes in full. A.R.Q.’s monthly debt repayment are not part of what would qualify as normal minimum household expenses and therefore there is the ability to pay property taxes in full.
Issue 2 - If the Board determines they were unable to pay their property taxes, the Board must then determine if the reason they were unable to pay was either sickness or extreme poverty.
18The Board has determined that the Applicant and her co-owner A.R.Q. at the time of the assessment for 2021 property taxes were able to pay the property taxes, there will be no determination of this issue
CONCLUSION
19The Board finds that the Applicant and her assessed co-owner were able to pay the 2021 property taxes.
ORDER
20The Board orders that the application is dismissed.
"Pierre R. Lavigne"
PIERRE R. LAVIGNE MEMBER Assessment Review Board Website: www.tribunalsontario.ca/arb