Pathak v. Municipal Property Assessment Corporation Region 15, 2022 CanLII 9920

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 10, 2022

FILE NO.: RD 20-37

Assessed Persons: Sathish Pathak, Damyanti Savita Pathak

Appellant: Sathish Pathak, Damyanti Savita Pathak

Respondent: Municipal Property Assessment Corporation Region 15

Respondent: City of Mississauga

Property Location: 5113 Montclair Drive

Municipality: City of Mississauga

Roll Number: 2105-040-159-14900-0000

Appeal Numbers: 3340584, 3358446 and 3406947

Taxation Years: 2018, 2019 and 2020

Legislative Authority: Rules 120 and 121 of the Assessment Review Board’s Rules of Practice and Procedure effective April 1, 2017 and amended May, 2019

Parties

Counsel/Representative*

Sathish Pathak, Damyanti Savita Pathak

Roman Andrzejewski

Municipal Property Assessment Corporation

Matthew Kanter* Brandy Pitz

City of Mississauga

Submissions not received

REQUEST FOR: A review of the Board’s Decision WR 163342A, issued as amended on April 24, 2020

HEARD: In writing

ADJUDICATOR: Jean-Paul Pilon, Member

DECISION

OVERVIEW

Background

1Sathish Pathak and Damyanti Savita Pathak (the “Requestors”) requested a review of the Assessment Review Board’s (the “Board”) Decision WR 163342A issued April 24, 2020 (the “Decision”).

2The Decision concerned the Requestors’ appeals relating to their property located at 5113 Montclair Drive in Mississauga (the “Subject Property”) for the 2018, 2019 and 2020 taxation years.

3In the Decision, the Board determined that the current value of the Subject Property exceeded both the value returned on the assessment roll and the value sought by the Municipal Property Assessment Corporation (“MPAC”) at the hearing. No notice was served prior to the hearing that any party was seeking a higher assessment than that returned on the assessment roll.

4In their overview in the request for review, the Requestors argued that the Decision contained significant errors of law, that the Board violated the rules of natural justice and fairness, and that the Board acted with bias.

5MPAC’s position in the request for review was that the Decision contained no significant errors of law or fact, that there were no procedural errors and that there was no evidence of any bias in the proceedings.

6The City of Mississauga made no submissions in the request for review.

Issues for the Review

7The Board’s Rules of Practice and Procedure effective April 1, 2017 and amended May, 2019 (the “Rules”) set out the grounds for review of Board decisions. The Rules were in force at the time that these appeals were heard and at the time that the request for review was filed.

8Those Rules were replaced with new Rules of Practice and Procedure as of April 1, 2021 that were in force when submissions were requested from the parties in this request for review. However, the salient rules pertaining to requests for review remained identical between both versions.

9Rule 121 of the Rules provided, in part, that:

121. A request for review will not be granted unless the Board is satisfied that:

(a) the Board acted outside its jurisdiction or violated the rules of natural justice or procedural fairness;

(b) the Board made a significant error of law or fact such that the Board would likely have reached a different decision.

10Therefore, the questions to be determined in this request for review are the following:

Issue 1 - Does the Decision contain any significant error of law or fact such that the Board would have reached a different decision? and

Issue 2 - Did the Board violate the rules of natural justice or procedural fairness?

Result

11For the reasons that follow, this request for review is denied.

ANALYSIS

The Decision

12MPAC returned an assessed value of $1,397,000 for the Subject Property. The Requestors appealed that assessment.

13No party disputed that the direct comparison approach was the best method to determine the correct current value of the Subject Property, and MPAC was the only party to present evidence of comparable properties using that approach. MPAC’s position at the hearing was that two of its four comparable properties were most similar to the Subject Property. Using time adjusted sales prices for those two properties, MPAC arrived at a median cost per square foot (“sq. ft.”) of $312.96. MPAC applied this rate to the square footage of the Subject Property, arriving at a current value of $1,569,000.

14The Board did not accept MPAC’s position. Instead, the Board determined that all four of MPAC’s comparable properties should be used to determine the correct current value of the Subject Property because all four were comparable. The Board determined the median value per sq. ft. for those four properties to be $322.53. The Board then applied this rate to the square footage of the Subject Property, resulting in a current value of $1,646,000 rounded.

15The parties then agreed that an equitable adjustment based on an assessment to sale ratio (“ASR”) of 0.921 was required, but they disagreed over what current value that ASR should be applied to.

16When applied to MPAC’s proposed current value of $1,569,000, the result was an adjusted value of $1,445,000. However, MPAC took the position that since it had not provided notice that it would be seeking a higher assessment than returned, the Board should confirm the returned value of $1,397,000 as being the current value of the Subject Property. The Requestors, on the other hand, argued that the 0.921 ASR should be applied to the returned assessment of $1,397,000, which would have resulted in an adjusted value of $1,286,637.

17Ultimately the Board disagreed with both parties. The Board applied the ASR of 0.921 to $1,646,000, the Board’s determination of current value, to arrive at an adjusted value of $1,516,000 rounded.

Issue 1 - Does the Decision contain any significant error of law or fact such that the Board would have reached a different decision?

18In their request for review, the Requestors submitted that the Decision contained errors of law in failing to consider Rule 40 and in its determination in para. 15 of the Decision that there was a difference between the assessed value returned on the roll and current value.

Rule 40

19Rule 40(b) provided that:

A party to a summary proceeding must give notice to the Board, and all other parties to a summary proceeding, within 30 days of (the commencement date), that the party intends to raise with the Board:

(b) A higher assessment than that returned by the (sic) MPAC.

20There was no Rule 40 notice served in this case, and the Requestors argued in the request for review that the Board could not have determined a higher current value in the absence of that notice.

21The Board does not accept this submission for two reasons.

22First, a plain reading of Rule 40 dictates that it would only have applied to a party intending to raise a higher assessment than that returned by MPAC. Here, MPAC was not seeking a higher assessment and it was the Board that determined a higher current value. In those circumstances, the Rule did not apply.

23Second, there is a limit on the Board’s authority to make its own rules. Section 25.1(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 provides that “a tribunal (of which the Board is one) may make rules governing the practice and procedure before it,” while subsection (3) provides that “the rules shall be consistent with this Act and with the other Acts to which they relate.”

24This means that Rule 40 could not have operated to limit the Board’s authority to determine the value of the land because that is the Board’s legislated obligation pursuant to section 44(3)(i)(a) of the Act which provides in part that “the Board shall determine the value of the land.” Further, section 44(1) provides that:

upon an appeal on any ground against an assessment, the Assessment Review Board…may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

25As was determined in the Board’s review decision Merivale-Gilmour Manor Ltd. v Municipal Property Assessment Corporation, Region 03, 2020 CanLII 28326 at para. 17, the purpose of Rule 40 was to provide an element of procedural fairness to a party that would be affected by such a request if the Board accepted that position of a higher value.

26In addition, in Newson v Municipal Property Assessment Corporation, Region 15, 2017 CanLII 27409 at para. 31, the Board determined that it “is not required to accept MPAC’s recommendation where there is clear evidence before the Board on the basis of which the Board could reach a different conclusion.” The Board went on to say that “it is within the authority of the Presiding Member to make such a finding.” A similar conclusion was set out in Merivale at para. 29, where it was determined that the Board “must also consider whether the current value is the same as MPAC’s assessed value or higher.”

27In short, Rule 40 did not and could not have affected the Board’s jurisdiction or its obligation to determine the current value of the Subject Property.

Paragraph 15 of the Decision

28In paragraph 15 of the Decision, the Board determined there was a “distinct difference between the assessed value returned on the roll and the current value.” It found that the term “assessed value” was the returned value on the assessment roll arising from the use of MPAC’s mass appraisal model. It found that the term “current value” was as defined in section 1(1) of the Act as meaning “in relation to land, 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 paragraph concluded that “the current value is determined by using the recent sales of comparable properties that tend to demonstrate the market value of the subject property in comparison to those comparable properties.”

29In one respect, the Board’s latter determination was incorrect because there are other ways in which current value can be determined beyond the direct comparison approach. However, in this instance, the appeals related to an urban, residential property and it was not contested that the direct comparison approach was the most appropriate method to use. The only error was that the Board did not limit its observation to the question before it. In any event, this error has no relevance to the issues raised in this request for review and it was not a significant error of law or fact such that the Board would likely have reached a different decision.

30In their request for review, the Requestors argued that the Decision was incorrect, citing section 14(1) of the Act which provides that MPAC “shall prepare an assessment roll...(which) shall contain the following information….the current value of the land.” The Requestors argued that “if the presiding Member would recognize the fact that roll return value, assessed value and current value has to be one and the same, no matter what method MPAC arrived at it, Member (sic) would have reached a different conclusion as to the outcome of the hearing.”

31The Board does not agree. As noted above, MPAC’s obligation is to prepare an assessment roll that reflects the current value of the land which it does using a system of mass appraisal. Once done, a party affected by that assessment can appeal on grounds that “the current value of the person’s land is incorrect” pursuant to section 40(1)(i) of the Act, as the Requestors did. The Board is not bound by the assessment returned on the roll and, as noted above, section 44(1) of the Act provides that the assessment is reopened on appeal. Further, section 45 of the Act gives the Board all of “the powers and functions of the assessment corporation in making an assessment.”

32In Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) at para. 21, the Board determined that “MPAC is not required to prove the correctness of its returned assessment.” The Board, referencing section 1(1) of the Act, confirmed that MPAC’s obligation at this point was “to prove the correctness of the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length from a willing seller to a willing buyer.” The Act is clear that the determination of current value is to be made by the Board and not necessarily with reference to MPAC’s assessment.

33As a result, the Board finds that paragraph 15 of the Decision contains no significant error of law or fact such that the Board would likely have reached a different decision.

Finding on Issue 1

34There was no significant error of law or fact such that the Board would likely have reached a different decision.

Issue 2 - Did the Board violate the rules of natural justice or procedural fairness?

35In their request for review, the Requestors submitted that the Board did not follow the doctrine of legitimate expectation, that it acted unfairly and that it was biased.

The Doctrine of Legitimate Expectation

36The doctrine of legitimate expectation is set out at para. 26 of Baker as follows: “if the clamant has a legitimate expectation that a certain procedure will be followed, this procedure will be required by the duty of fairness.” The doctrine is nevertheless subject to a limitation, for “in order for the doctrine of legitimate expectation to apply, there must also be no statutory bar” (Demirtas v Canada (Minister of Employment and Immigration), 1992 CanLII 2425 (FCA), at the fifth unnumbered paragraph from the end).

37This is the context in which the Requestors argued that the Board did not follow its precedents which, they said, was a significant error of law. The Requestors referred to six decisions by the Board involving the same legal representative as acted for the Requestors at the hearing. In five of those decisions, the Board declined to find that the properties at issue had a current value that exceeded the returned assessment because MPAC had not requested that higher current value. In one, Russell v Municipal Property Assessment Corporation, Region 09, 2018 CanLII 84477, the Board went so far as to determine at para. 32 that “where MPAC has not served a (notice) under s. 40 (sic) for an increase in the assessed value, the Board has no jurisdiction to increase the value.”

38The correctness of those decisions is not an issue in this request for review. However, as pointed out by MPAC in its written argument, any doubt as to the Board’s responsibilities pursuant to section 44(3) of the Act were resolved with the Divisional Court’s decision in Municipal Property Assessment Corporation v Zarichansky, 2020 ONSC 1124 (“Zarichansky”), which underlined the Board’s obligation to determine correct value pursuant to section 44(3) of the Act. Most notably, that decision stated at para. 43 that:

Ultimately, the Board has no authority to fix the value of a property at an amount that it knows does not represent the “current value.” The exception to this is section 44(3), which provides a specific mechanism for reducing the current value in circumstances where it is equitable to do so. However, the starting point for this exercise, as set out in section 44(3)(a), is determining the current value of the property.”

39Zarichansky is a binding decision released subsequent to all of the decisions cited by the Requestors in their request for review. It was an important decision because it clarified the Board’s statutory obligation to determine current value. The doctrine of reasonable expectation, on the other hand, only applies if there is no statutory bar to that expectation. What the Requestors expected in these appeals would not have been compliant with the statute.

40As a result, the Board finds the doctrine of legitimate expectation does not apply to the circumstances cited in this request for review.

Allowing for Submissions

41As noted earlier, MPAC’s position at the hearing was that the returned value should be confirmed, even if its opinion of current value was higher, because it did not serve a Rule 40 notice on the other parties. Instead, the Board determined that the evidence before it supported a current value that was higher than returned. The Requestor argued in the request for review that this was unfair.

42The Board’s determination would have been problematic from a procedural fairness standpoint if the parties had not been given an opportunity to make submissions on the possibility that the Board would find this higher current value. This is important because a party “whose interests were affected (must have) a meaningful opportunity to present their case fully and fairly” in accordance with the Supreme Court of Canada’s decision in Baker v Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC) at para. 30. However, it was not alleged in the request for review that the Requestors were not given the opportunity to make submissions on that possible outcome at the hearing. In fact, MPAC in its submission in the request for review stated that the Requestors were given the opportunity to make those submissions.

43The Board did not violate the rules of natural justice or procedural fairness as alleged in this part of the request for review.

Reasonable Apprehension of Bias

44Bias was mentioned in four places in the request for review: in an overview, in a statement that the Member “breeched (sic) procedural fairness and acted with bias” and in two more places where the Requestors said that the Board would have reached a different decision had there not been bias. Nowhere in the request for review the allegation explained further.

45MPAC’s written argument correctly noted that “the onus of demonstrating bias lies with the person alleging its existence” and that a “mere suspicion” of bias is insufficient (R. v S. (R.D.), 1997 CanLII 324 (SCC) at paras. 112 and 114). It also cited the seminal test in Committee for Justice and Liberty et al v. National Energy Board et al., 1976 CanLII 2 (SCC) at page 394 as:

what would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude. Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously would decide fairly.

46The Requestors did not discharge their burden of proving any reasonable apprehension of bias, let alone actual bias in this instance. It is possible that the Requestors’ allegation was related to the fact that the Hearing Member made previous decisions that appear inconsistent with the Decision in declining to find current values to be greater than those values returned by MPAC. However, the request for review did not articulate that position. In any event and as indicated above, the Decision issued after Zachiaransky which clarified the Board’s obligation pursuant to section 44(3) of the Act.

47The Board finds that the Decision contains no indication of actual bias nor reasonable apprehension of bias.

Finding on Issue 2

48The Board Did not violate the rules of natural justice or procedural fairness.

CONCLUSIONS

49The Board finds that the Decision contains no serious error of law, fact or procedure. It therefore denies the request for review.

50In summary, section 44(1)(a) of the Act requires the Board to determine the current value of the land. This means that it is not open to the Board to determine a current value of the land that does not meet the definition of “current value” set out in section 1(1) of the Act: “the amount of money in fee simple, if unencumbered, (land) would realize if sold at arm’s length by a willing seller to a willing buyer.”

51The Board was entitled to determine that the current value of the Subject Property exceeded the returned assessment based on the evidence even if no party was requesting a higher assessment than that returned by MPAC.

ORDER

52The Board orders that this request for review is denied.