ARI STC GP Inc. v. Municipal Property Assessment Corporation Region 09, 2023 CanLII 116834

Tribunals Ontario - Assessment Review Board

Tribunaux décisionnels Ontario - Commission de révision de l’évaluation foncière

ISSUE DATE: December 12, 2023

FILE NO.: DM 185342

Assessed Person(s): OMERS Realty Holdings ARI STC GP Inc.

Appellant(s): ARI STC GP Inc.; Cineplex Entertainment LP

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 300 Borough Drive

Municipality(ies): City of Toronto

Roll Number(s): 1901-051-730-00200-0000

Appeal Number(s): 3436401, 3450163, 3486988, 3487554, 3512205, and 3512404

Taxation Year(s): 2021, 2022 and 2023

Hearing Event No.: 782064

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

Parties	Counsel
Cineplex Entertainment LP	Submissions not received
ARI STC GP Inc.	Tara Piurko and Jesse White
Municipal Property Assessment Corporation	Donald G. Mitchell
City of Toronto	Angus MacKay

REQUEST FOR: An order dismissing the appeals on the basis of issue estoppel or abuse of process

HEARD: October 19, 2023 in writing

ADJUDICATOR(S): Carly Stringer, Member; Christopher Voutsinas, Vice-Chair

MOTION DECISION

OVERVIEW

The Parties and the Appeals

1ARI STC GP Inc. (the “Appellant”) has appealed the assessments of 300 Borough Drive (the “Subject Property”) in the City of Toronto for the 2021, 2022 and 2023 taxation years to the Assessment Review Board (the “Board”) pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act” or the “Assessment Act”). The Subject Property is a shopping mall known as the Scarborough Town Centre.

2Cineplex Entertainment LP (“Cineplex”) is a tenant at the Scarborough Town Centre and has also appealed the assessments for the 2021 to 2023 taxation years (the Appellant and Cineplex appeals together, the “2021 to 2023 Appeals”).

3The Appellant argues, among other things, that the value stated on each assessment is too high as it does not reflect the negative impact of the Covid-19 pandemic on the value of the Subject Property.

4Cineplex has not provided a Statement of Issues outlining its position on the 2021 to 2023 Appeals, so its position remains unknown.

5The Municipal Property Assessment Corporation (“MPAC”) and the City of Toronto (the “City”) are responding to the 2021 to 2023 Appeals. They disagree that the impact of the Covid-19 pandemic should be considered in determining the value of the Subject Property.

6MPAC brought a motion asking the Board to dismiss the 2021 to 2023 Appeals based on issue estoppel. MPAC’s motion is the subject of this Motion Decision.

Result

7For the reasons that follow, the Board grants MPAC’s motion and dismisses the 2021 to 2023 Appeals.

BACKGROUND

8To provide context to this Motion Decision, the Board will first outline the legislative framework that governs assessment in Ontario. Then, the Board will provide a brief procedural history of the 2021 to 2023 Appeals.

Legislative Framework Governing Assessment

9Subject to specific exceptions outlined in ss. 32, 33 and 34 of the Assessment Act, assessments of land in Ontario must be made annually between January 1 and the second Tuesday following December 1: see s. 36(1) of the Assessment Act. MPAC, as the assessment corporation in Ontario, is tasked with preparing these annual assessments.

10Neither “assess” nor “assessment” are defined in the Act. Therefore, the meaning of “assessment” in s. 36(1) must be determined by considering the ordinary meaning of the word, read in its entire context within the scheme and object of the Act, considering the intention of the legislature: see Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 SCR at paragraph 21, citing Elmer Driedger, Construction of Statutes (2^nd ed. 1983) at page 87.

11In National Car Rental (Canada) Inc. v Municipal Property Assessment Corporation, Region 15, 2022 CanLII 53352 (ON ARB) (“National Car”) at paragraphs 75 to 96, the Board conducted a comprehensive statutory interpretation of s. 36(1) of the Assessment Act. The Board found at paragraph 79 that:

In the context of the provisions of the Act, ‘assess’ means the act of forming an opinion as to a property’s current value or classification, as well as the act of obtaining other relevant factual information which a municipality requires in order to levy taxes. An ‘assessment’ is the information obtained from the act of assessing.

12The Board considered the statute as a whole, including s. 14 of the Act which prescribes the information that MPAC must provide annually to municipalities in Ontario. The Board found that s. 14 “clearly indicates that an ‘assessment’ [under s. 36(1)] is a compilation of the necessary property information which a municipality requires in order to levy municipal property taxes”: National Car at paragraph 80.

13The information that is compiled for an assessment includes, among other things, the names of the persons who are liable to assessment; a description of each property that is assessed; and the current value of the land: see s. 14(1) of the Assessment Act.

14“Current value” is defined in s. 1 of the Assessment Act as “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”.

15The Assessment Act mandates that a property’s value be determined as of a single valuation day. Land is valued as of the statutory valuation date of January 1, 2016 for the 2017 to 2024 taxation years: see 19.2 of the Assessment Act and s. 48.6 of O. Reg 282/98. The Assessment Act defines “general reassessment” as “the updating of assessments as a result of the application of a new valuation day”: see s. 1(1) of the Assessment Act.

16Therefore, under the Assessment Act, there is i) the general reassessment which requires that the current value be determined as of a new valuation day; and ii) annual assessments pursuant to s. 36(1) which require that MPAC report the information required under s. 14(1) of the Act.

17This annual assessment includes, but – importantly - is not limited to, the current value of the Subject Property. The current value reflects the amount of money the Subject Property would have sold for on the open market as of the statutory valuation day of January 1, 2016.

18Finally, the Act includes two mechanisms for challenging an annual assessment of land:

1. A party may ask MPAC to reconsider the assessment before March 31 of the year for which the assessment is made: s. 39.1 of the Assessment Act. If the party is not satisfied with the result, it has 90 days following MPAC’s decision to appeal to the Board.

2. A party may appeal the annual assessment to the Board before March 31 of the year for which the assessment is made. The statute provides a list of the bases upon which a party may appeal to the Board, which includes “the current value of the person’s land or another person’s land is incorrect”: s. 40 of the Assessment Act.

19With this context in mind, the Board will now provide some procedural history to these appeals.

The Appellant Appeals the Property Assessment for 2017 to 2019

20Cineplex has not provided submissions or evidence on this motion, and therefore the Board will not refer to the Cineplex appeals or submissions for the remainder of this Motion Decision.

21The Appellant filed an appeal of the 2017 assessment of the Subject Property with the Board on the basis that the current value reflected on the assessment was too high pursuant to s. 40(1) of the Assessment Act. Pursuant to s. 40(26) of the Assessment Act, appeals were deemed for the 2018 and 2019 taxation years (together, the “2017 to 2019 Appeals”). MPAC and the City of Toronto were respondents to the 2017 to 2019 Appeals.

22The Appellant, MPAC and the City of Toronto settled the 2017 to 2019 Appeals and executed Minutes of Settlement in March 2020. The parties filed these Minutes of Settlement with the Board and requested that the Board issue decisions. On March 13, 2020, the Board issued decisions in relation to each of the 2017 to 2019 Appeals, reducing the total value reflected on the assessments in accordance with the amounts in the Minutes of Settlement (the “2017 to 2019 Decisions”).

The Appellant Appeals the Property Assessment for 2020

23The Appellant filed an appeal of the annual assessment of the Subject Property made for 2020 on the basis that the current value was too high.

24The Appellant eventually withdrew this appeal in February 2021.

The Appellant Appeals the Property Assessment for 2021 to 2023

25Pursuant to s. 36(1) of the Assessment Act, an annual assessment of the Subject Property was made for 2021. The current value on the 2021 assessment reflected the value from the 2019 Decision.

26The Appellant filed an appeal of this 2021 assessment. Pursuant to s. 40(26) of the Assessment Act, appeals were deemed for the 2022 and 2023 assessments. MPAC and the City of Toronto are respondents to these 2021 to 2023 Appeals.

MPAC Files a Motion for Issue Estoppel

27In July 2023, MPAC filed a request with the Board to schedule a motion seeking to dismiss the 2021 to 2023 Appeals based on issue estoppel and abuse of process. Namely, MPAC argued that the issue in dispute in the 2021 to 2023 Appeals is the current value of the Subject Property as of January 1, 2016, which was already decided in the 2017 to 2019 Decisions.

28The City supports MPAC’s request. The Appellant opposes it.

29The Board scheduled this motion to consider and decide MPAC’s request.

ISSUES

30The following issues will be addressed on this motion:

1. Are the preconditions to issue estoppel met in this case?

2. If the preconditions to issue estoppel are met, ought the Board apply issue estoppel, as a matter of discretion?

3. Does abuse of process apply and, if it does, ought the Board apply it?

ANALYSIS

Issue 1 - Are the preconditions to issue estoppel met in this case?

Applicable Law

31Issue estoppel prevents re-litigating issues that have already been judicially decided: see Smith v Municipal Property Assessment Corporation, Region No. 23, 2018 CanLII 35052 (ON ARB) at paragraph 16. In essence, issue estoppel “prevent[s] the waste of time and money and the frustration of having to re-litigate an issue which has already been decided by a court or tribunal of competent jurisdiction”: Hyde v. Municipal Property Assessment Corp., Region No. 7, [2013] O.A.R.B.D. No. 7 at paragraph 18.

32The three criteria that must be met for issue estoppel to apply are well-settled: see Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 SCR 460 (“Danyluk”) at paragraphs 54 to 59; First Capital Holdings (Ontario) Corporation v Municipal Property Assessment Corporation, Region 09, 2022 CanLII 58354 (ON ARB) at paragraph 27. The preconditions that must be satisfied are that:

i. the same question has been decided;

ii. the decision said to create the estoppel was final; and

iii. the parties to that decision were the same as the proceedings in which the estoppel is raised.

Submissions of the Parties

33The most significant area of dispute between the parties is the first precondition to issue estoppel.

34Before discussing the submissions in more depth, the Board notes that both MPAC and the Appellant ascribe to a “state and condition” paradigm in their understanding and application of the Assessment Act. To put it simply, the “state and condition” paradigm postulates that the value of land reflected in the annual assessment is based on the “state and condition” of that land as of the latest date for making the assessment for the taxation year. As noted above, s. 36 of the Act defines the latest date as the second Tuesday following December 1^st. This day is often referred to as the “state and condition day”.

35Applying the “state and condition” paradigm to the facts of this case would mean that the value of the Subject Property as reflected on the 2021 assessment would be based on what the property, in its “state and condition” as of the “state and condition day” of December 15, 2020, would sell for on January 1, 2016. In other words, the parties agree that the current value on each annual assessment should be an updated current value based on what the property would have sold for on the valuation day had it been in its current “state and condition”. Put another way, what this property would sell for on that valuation day.

36As will be discussed in more detail below, the Appellant argues in the 2021 to 2023 Appeals that the “state and condition” of the Subject Property on the 2021 “state and condition day” changed because of the negative impact of the Covid-19 pandemic, such that the current value decreased for the applicable taxation years. MPAC argues that the Covid-19 pandemic caused a change in the market, but market changes are not changes in the “state and condition” of the Subject Property that can affect the value reflected on the annual assessment. MPAC submits that the relevant market conditions are those that existed as of the statutory valuation day of January 1, 2016.

37The “state and condition” paradigm was generally considered, and rejected, by the Board in National Car. This will be discussed in more detail in the Board’s analysis below.

MPAC’s Submissions on the First Precondition to Issue Estoppel

38MPAC’s position is that the same issue has been decided and the first precondition to issue estoppel is met. MPAC submits that the Appellant raises the same issue in the 2021 to 2023 Appeals that was raised and determined in the 2017 to 2019 Appeals, namely: what is the current value of the Subject Property as of the January 1, 2016 valuation day?

39MPAC further submits that the “state and condition” of the Subject Property did not change for the 2021 to 2023 taxation years. MPAC submits that the Appellant seeks to change the value based on the Covid-19 pandemic, which is a market change and not a change to the “state and condition” of the Subject Property. In this regard, MPAC does not appear to dispute that the “state and condition” paradigm applies, but rather asserts that the “state and condition” of the Subject Property has not changed for the 2021 to 2023 taxation years and therefore there should be no change in the value of the Subject Property as of January 1, 2016.

City’s Submissions on the First Precondition to Issue Estoppel

40The City adopts MPAC’s submissions.

Appellant’s Submissions on the First Precondition to Issue Estoppel

41At its most basic, the Appellant’s position is that the first precondition to issue estoppel has not and cannot be met in this case.

42More specifically, the Appellant submits that:

1. A finding of issue estoppel is contrary to a taxpayer’s annual right to appeal the assessment of its property based on changes to the state and condition of the property, and contrary to the provisions of the Assessment Act.

2. The issues raised in the 2021 to 2023 Appeals are not the same as the issues raised and resolved between the parties in the 2017 to 2019 Appeals. The issues raised in the 2021 to 2023 Appeals are specific to the 2021 to 2023 taxation years due to a change in circumstances that occurred before the “state and condition days” for 2021, 2022 and 2023. Specifically, the Appellant argues that whether the 2021 to 2023 assessments are equitable with the assessments of similar property in the vicinity was not and could not have been adjudicated until MPAC returned the assessments for those years.

3. The Appellant submits that the Board should not adopt the reasoning in National Car that rejected the “state and condition” paradigm because it is contrary to the taxpayers’ annual right to challenge their annual assessment based on a change to a property's state and condition as of the return of the assessment roll.

4. The “question” must be decided by a competent tribunal, and it must be a decision on the merits which is not the case here because i) the Board has not heard or considered evidence for the 2017 to 2019 Appeals, or the 2021 to 2023 Appeals, and the Appellant has a right to a hearing on the merits; and ii) the settlement for the 2017 to 2019 Appeals was specific to those taxation years and not determinative of the issues and assessments arising later for the 2021 to 2023 assessments.

Findings on Issue 1

43The Appellant’s arguments presume that the Assessment Act requires that the current value on each annual assessment should reflect an updated current value based on the “state and condition” of the land for that taxation year. Therefore, the Appellant’s case on this motion turns on whether the “state and condition” paradigm applies. This requires the Board to first consider whether it should apply the reasoning in National Car, which explicitly rejects that the current value on the annual assessment should be based on the “state and condition” of the property as of the “state and condition day” for each assessment year under appeal.

44The Appellant submits that the reasoning in National Car should not be followed. Neither MPAC nor the City have provided submissions on the application of National Car.

Applying National Car

45The Board finds that National Car provides detailed, thorough, and well-articulated reasons for rejecting the “state and condition” paradigm, including a comprehensive interpretation of the relevant provisions of the Assessment Act and an extensive review of previous case law. This is consistent with the approach an administrative tribunal is expected to take when it departs from longstanding practice: see Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 SCR 653 at paragraph 131.

46The Board in National Car explicitly rejected an interpretation of the Assessment Act that requires the Board to evaluate whether and how the value of the Subject Property was impacted for each taxation year based on circumstances as of the “state and condition day”. Rather, after a thoughtful and exacting analysis, the Board concluded that the Act provides for only one valuation day – in this case, January 1, 2016 – that applies to the current value as reflected in the annual assessments under appeal unless another provision in the Act applies to require a redetermination of current value.

47The Appellant submits that National Car cannot be reconciled with the various rights and obligations set out in the Assessment Act, highlighting several provisions of the Assessment Act in support of its position. The Board has carefully considered the Appellant’s submissions and does not accept that the interpretation in National Car cannot be reconciled with the various rights and obligations set out in the Assessment Act, for the following reasons:

1. In general, the Appellant asserts that it has an annual right to challenge its annual assessment based on a change to the state and condition of the land as of the date the assessment roll is returned for that year. The Board rejects the Appellant’s interpretation of the Act. While the Act requires that MPAC make an annual assessment, and a party can appeal its annual assessment, there is no section in the statute that affords a party a right to challenge the current value on that annual assessment because of a change to the property’s state and condition as of return of the assessment roll. Analyzing the statute as a whole makes this clear, as was done in National Car.

2. The Appellant submits that s. 31(1) Notice of Assessment contemplates that there can be a change in the current value of the land between general reassessments, which the Appellant submits is contrary to National Car. The Board does not accept the Appellant’s argument that 31(1) cannot be reconciled with National Car. National Car does not suggest that there can be no change in the current value of land between general reassessments. National Car explicitly recognizes that the Assessment Act provides a comprehensive scheme for circumstances where there can be changes in the current value of land between general reassessments: see National Car at paragraph 124. National Car simply says that the Assessment Act does not allow for changes in current value based on a change in the “state and condition”. For this reason, the Board finds that the analysis in National Car is consistent with s. 31(1) of the Act.

3. The Appellant submits that s. 36(1) makes annual assessments a requirement, and that National Car would require misreading this subsection as requiring annual assessments only in the context of an assessment under ss. 32, 33 or 34. The Board does not accept this submission. The Appellant is conflating the s. 36 requirement to make an “annual assessment” with an annual determination of “current value”. These are two separate things. The Appellant’s argument was extensively considered and rejected in National Car: see National Car at paragraphs 75 to 96. The Board will not repeat that analysis here, but finds that it is a comprehensive response to the Appellant’s suggested interpretation that s. 36(1) of the Assessment Act requires an annual determination of current value. At its most basic, the Appellant’s proposed interpretation is inconsistent with the single prescribed valuation day. Further, the Appellant’s proposed interpretation of a fixed “state and condition day” on which a property’s “state and condition” is determined is inconsistent with the wording of s. 36(1) and (2). Section 36(1) provides that assessments of land “shall be made annually at any time between January 1 and the second Tuesday following December 1” (emphasis added). Section 36(2) provide that the assessment roll shall be returned “not later than the second Tuesday following December 1 in the year in which the assessment is made” (emphasis added). There is no fixed “state and condition day” in the Act, which is a necessary component of the Appellant’s proposed interpretation.

4. The Appellant submits that s. 19.2(1) sets out the date “as of which” land is to be valued, which is different than a date “on which” land is to be valued. The Appellant submits that this distinction requires MPAC to provide its opinion of value of this property (in its state and condition as of the roll return date) on that date (January 1, 2016). The Board does not accept the Appellant’s submission for two reasons: first, the plain and ordinary meaning of “as of which”, read in the context of the statute as a whole, reflects the reality that MPAC will have to conduct its annual assessments at some point after the valuation day. If the Act used the term “on which”, MPAC could only assess on January 1, 2016, which is not practical or consistent with the Act as a whole. Second, the Appellant has not provided a satisfactory statutory interpretation in support of its proposed interpretation that the Act requires MPAC to provide an opinion of value of this property on that date, in contrast to the careful review of the relevant provisions of the Assessment Act provided in National Car. The Board does not accept that it should disregard the systematic National Car analysis in favour of the Appellant’s unsupported interpretation.

5. The Appellant submits that ss. 48.3 to 48.5 of O. Reg 282/98 explicitly direct MPAC to make annual adjustments to the current value. The Board does not accept this submission because the Appellant has not accurately described how ss. 48.3 to 48.5 of the Regulation operate. These sections do not “direct” MPAC to make annual adjustments to current value when returning assessments. Rather, ss. 48.3 to 48.5 of O. Reg 282/98 must be understood in relation to Section 19.1 of the Act. Section 19.1 of the Act provides for reductions to current value for the sole purpose of “phasing in” an increase to the current value that happens because of a general reassessment. For instance, say a property was valued at $100,000 as of January 1, 2012. Then, there is a general reassessment on January 1, 2016 and the current value is increased to $200,000. Section 19.1 of the Act provides a mechanism to reduce the current value so that the increase is “phased-in” over time. Section 19.1 makes an adjustment to current value. It does not require a redetermination of current value.

6. The Appellant also submits that the definition of “eligible change” in Section 48.3 of O. Reg 282/98 (incorporated by reference into s. 48.5 of O. Reg 282/98) is directly at odds with the Board’s conclusion at paragraph 229 of National Car that section 36 does not allow for an annual reassessment of current value. Sections 48.3 to 48.5 of the General Regulation address how to calculate the quantum of the “eligible increase” to be applied to the current value where there has been “eligible change” .as this term is defined in s. 48.3(2)(c). Section 48.3(2) references a number of sections in the Act that require a redetermination of current value. More particularly, s. 48.3(2)(c) states that an “eligible change” means “a change to the state or condition of land that results in the assessment made under section 36 of the Act for the taxation year differing from the assessment made for the previous taxation year”. Therefore, the purpose of this subsection is to ensure that “eligible change” will include any sections of the Act that require a redetermination of current value that are not otherwise specifically referenced in the definition of “eligible change” in s. 48.3(2) of the General Regulation. In further support of this interpretation, although the definition of “eligible change” references “state or condition”, there is not a single other reference to “state and condition” or “state or condition” in the Act or O. Reg. 282/98. Therefore, there is no definition of “state or condition” that supports the Appellant’s interpretation.

7. Finally, the Appellant submits that the “deeming” provision at s. 40(26) of the Act references appeals in relation to taxation years, and not just taxation years to which a general reassessment applies. However, the Appellant has not explained why it believes this supports an interpretation of the Act that requires that current value be updated in every annual assessment based on the “state and condition” of land as of the “state and condition day". National Car does not suggest that a taxpayer cannot appeal its annual assessment. The Board finds that the “deeming” provisions are entirely consistent with the interpretation of s. 36 provided in National Car.

48For these reasons, the Board does not accept the Appellant’s submission that National Car cannot be reconciled with the various rights and obligations set out in the Assessment Act.

49The Appellant also argues that National Car departed from Divisional Court decisions that have recognized the “state and condition” paradigm, citing Municipal Property Assessment Corporation v. Claireville Holdings Limited, 2022 ONSC 3293, (“Claireville”) at paragraph 27 and Manulife v. Municipal Property Assessment Corporation et al, 2023 ONSC 4705 at paragraph 26 (“Manulife”). The Board does not accept this submission. National Car explicitly considered Claireville at paragraphs 195 to 210 and found that the Divisional Court’s reasons indicate that the parties did not ask it to decide whether the Act supports the “state and condition” paradigm. The Board agrees – this issue was not squarely before the Divisional Court, and the statement at paragraph 27 of the Divisional Court decision in Claireville is not determinative of the issue before the Board. With respect to Manulife, it is clear that this question was not squarely before the Divisional Court. Manulife was a leave to appeal decision and did not perform a substantive analysis of the same issues that are being decided here. The Board does not accept the Appellant’s submission in this regard.

50The analysis in National Car corrected much of the previous misinterpretation of the Assessment Act. It is possible that, but for the pandemic and the extension of the assessment cycle, assumptions regarding “state and condition” and the operation of the Assessment Act may never have had to be considered in such detail. The Appellant’s submission that the Act’s purpose of equity in taxation is achieved through annual assessments that reflect current “state and condition” and annual rights to appeal from those assessments is simply not supported by a comprehensive review of the statute. Rather, both equity in taxation and predictability is achieved through the Act by a base valuation day as of which current value is determined, subject to specific redeterminations of current value and adjustments prescribed explicitly in the legislation and regulations thereunder. It is not the Board’s place to “read in” a “state and condition” paradigm which is not supported by the provisions of the Act. This is particularly true given that “state and condition” does not appear anywhere in the Assessment Act; that there is only a single reference to “state or condition” that appears in the Regulation relating to phasing-in increases in value; and that the Act specifically provides for the date as of which land is to be valued. While the Board’s interpretation of the legislation may appear underinclusive to some, it is consistent with the purpose of the Act which includes prescribing when value is to be determined for the purpose of calculating and levying municipal property taxes. As noted by the Nova Scotia Court of Appeal in Nova Scotia (Director of Assessment) v. Wandlyn Inns Ltd., 1996 NSCA 80, issued on April 11, 1996 (cited extensively in National Car), a single valuation day may create a situation where a taxpayer is “stuck” with an assessment based on a past date. This can be either beneficial or disadvantageous, but at least it provides both taxpayers and municipalities with a degree of predictability in planning and managing their finances. This is the scheme of the Act. Ultimately, the task of making legislative policy decisions is properly left to legislators.

51After much deliberation, the Board finds the analysis contained in National Car represents a detailed and thoughtful analysis of the proper operation and application of the Act notwithstanding prior interpretations and practice. In this Motion Decision, the Board rejects the “state and condition” paradigm; finds that the Act specifically provides for the date as of which land is to be valued, which is not consistent with an annual redetermination of current value based on an annual “state and condition” of a property; and adopts and relies on the reasoning and findings in National Car, as applied in First Capital Holdings (Ontario) Corporation v Municipal Property Assessment Corporation, Region 09, 2022 CanLII 58354 (ON ARB) (“First Capital “) and Canadian Niagara Hotels Inc. v Municipal Property Assessment Corporation, Region 18, 2022 CanLII 54916 (ON ARB) (“Canadian Niagara”).

52The Board will now consider each precondition of issue estoppel.

The Same Question Has Been Decided

53The Board does not accept the Appellant’s submission that a finding of issue estoppel is contrary to a taxpayer’s annual right to appeal the assessment of its property based on changes to the state and condition of the property, and contrary to the provisions of the Assessment Act. In this regard, the Board states:

1. As noted above, the Board rejects the premise that the Act grants the taxpayer an annual right to appeal based on changes to the state and condition of the property.

2. Without repeating the comprehensive reasoning from National Car, First Capital and Canadian Niagara, the Board finds that s. 36(1) of the Act provides that assessments of land shall be made annually. However, “assessments of land” being made annually is not synonymous with “current value” being redetermined annually. The assessment of land includes more than just the current value of the Subject Property - the current value is but one piece of information reported in the annual assessment. The Board finds that, if issue estoppel applies, the Appellant would not be deprived of a right to appeal its annual assessment. The statutory right to file an appeal is not affected. The issue estoppel motion decides if the 2021 to 2023 Appeals raise a question that has already been decided. At most, applying issue estoppel in the circumstances of this case would deny the Appellant the ability to relitigate the current value of the Subject Property as of January 1, 2016, as it appears on the 2021, 2022 and 2023 assessments.

3. As noted above, the Board relies on and adopts the reasoning and findings in National Car. Put simply, there is no basis to argue that the current value that appears on the annual assessment is incorrect based on changes to the state and condition of the property for each assessment year. There is one valuation day that applies to the determination of current value as reflected on the assessment for each taxation year from 2017 to 2023 (subject to provisions in the Act that require a redetermination of current value in certain circumstances that do not apply in this case), and that valuation day is January 1, 2016. The Appellant’s basis for arguing that the issues in the 2021 to 2023 appeals are specific to those taxation years necessarily fails. The Board has considered and rejected this precise argument in National Car at paragraphs 41 to 62; First Capital and Canadian Niagara.

54With respect to the Appellant’s submission that the question must be decided in a decision following a full hearing on the merits, the Board finds that courts have been clear that issue estoppel can apply to proceedings that are resolved by the parties through consent judgments, and that it applies with “equal effect”: see R. v. Dieckmann, 2017 ONCA 575 at paragraph 35; Spadacini-Kelava v. Kelava, 2020 ONSC 7907 at paragraph 106. Therefore, the Board does not accept the submission that a full hearing on the merits is required.

55With respect to the Appellant’s submission that settlement of the 2017 to 2019 Appeals was specific to only those taxation years, the Board finds that the terms of settlement between the parties, and the private discussions between them that led to the Minutes of Settlement for the 2017 to 2019 Appeals, are not the basis for determining whether the same question was decided.

56The relevant question is not whether the parties intended their settlement to apply to subsequent taxation years, but rather whether the Board’s consent order determined the issue raised in the 2021 to 2023 Appeals. If the parties had intended to settle the appeals for the 2021 to 2023 taxation years, it would not be necessary to apply the doctrine of issue estoppel, as the appeals would be moot. Unlike mootness, which addresses whether there is a live issue in dispute, the doctrine of issue estoppel asks whether an issue has been decided in a previous proceeding, such that the issue should not be re-litigated in a new one.

57Therefore, the relevant question is, per Danyluk at paragraph 20, whether the settlement extends to the “constituent issues or material facts necessarily embraced therein” addressed by the 2017 to 2019 Decisions. The scope of the issues decided by the 2017 to 2019 Decisions requires the Board to look at the pleadings, the 2017 to 2019 Decisions, and the Assessment Act.

58In this regard, the Board turns to the Appellant’s submission that equitable adjustment pursuant to s. 44(3) of the Act was not determined by the 2017 to 2019 Decisions. In the 2017 to 2019 Appeals, the Appellant challenged the value at which its land was assessed. Section 44(3) of the Assessment Act directs that, to determine the value at which land shall be assessed, the Board is required to determine the current value of the land; and have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land (“equitable adjustment”). Section 19(2) of the Act states the day as of which land is valued for a taxation year, and confirms that land is valued as of January 1, 2016 for the 2017 to 2019 taxation years.

59Therefore, the question decided in 2017 to 2019 Decisions is the value at which the Subject Property shall be assessed as of the valuation day of January 1, 2016, per s. 44(3). Given the instruction in s. 44(3), answering this question necessarily requires i) a determination of the current value of the land [s. 44(3)(a)], and ii) whether an equitable adjustment is required [s. 44(3)(b)]. In this regard, Danyluk at paragraph 54 states that the estoppel “extends to the issues of fact, law, and mixed fact and law that are necessarily bound up with the determination of that ‘issue in the prior proceeding”. See also First Capital Holdings at paragraph 41; Canadian Niagara Hotels at paragraph 36.

60With respect to the question to be determined in the 2021 to 2023 Appeals, given that s. 48.6 of O. Reg. 282/98 provides that January 1, 2016 is the valuation day for 2021, 2022 and 2023, the question is identical to the 2017 to 2019 Decisions: namely, what is the value at which the Subject Property shall be assessed as of the valuation day of January 1, 2016? Section 44(3) of the Act provides that addressing this question necessarily requires a determination of the current value of the land, and whether an equitable adjustment is required.

61Therefore, the Board finds the same question has been decided and the first precondition to issue estoppel is satisfied.

The Decision Said to Create the Estoppel Was Final

62Neither party disputes that the 2017 to 2019 Decisions are final. Neither party provided evidence that the 2017 to 2019 Decisions were reviewed or appealed.

63The Board finds that the 2017 to 2019 Decisions are final.

64The Board finds that the second precondition to issue estoppel is satisfied.

The Parties Are the Same

65Neither party disputes that the parties are the same.

66The Board finds that the evidence supports that the parties to the 2017 to 2019 Appeals are the same as the parties to the 2021 to 2023 Appeals.

67The Board finds that the third precondition to issue estoppel is satisfied.

Issue 2 – Should the Board apply issue estoppel, as a matter of discretion?

Applicable Law

68The fact that the three preconditions to issue estoppel may be satisfied does not automatically give rise to its application: Danyluk at paragraph 63. The Supreme Court has confirmed “the objective is to ensure that the operation of issue estoppel promotes the orderly administration of justice but not at the cost of real injustice in the particular case”: Danyluk at paragraph 67.

69Therefore, now that the Board has determined that the preconditions to issue estoppel have been met, the Board must ask itself whether it should allow the Appellant to re-litigate the current value of the Subject Property as of January 1, 2016. In doing so, the Board “should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice”: Danyluk at paragraph 80.

Submissions of the Parties

MPAC’s Submissions

70MPAC submits that applying issue estoppel is just in the circumstances of this case. MPAC submits that there is no new evidence; no change in the law; no change in the Subject Property; and no other special circumstances that would override the public interest in the finality of litigation. MPAC further submits that the legislature applied a January 1, 2016 valuation to these taxation years to provide “much-needed stability and certainty” to municipalities, which is frustrated if the Appellant is allowed to relitigate the current value.

71Finally, MPAC submits that there is no evidence or suggestion of any impropriety, unfairness, or failure on natural justice in the 2017 to 2019 Appeals. The Appellant was represented by a qualified representative who agreed to and executed Minutes of Settlement which were confirmed by the Board.

City’s Submissions

72The City submits that it should be entitled to rely on the finality of the 2017 to 2019 Decisions regarding the current value of the Subject Property as of January 1, 2016. The City submits that it uses the assessment roll to create the tax roll to calculate and collect property taxes relied on by the City for its annual budgets and allowing the 2021 to 2023 Appeals creates a precedent for future current value appeals to reopen decisions that have already considered the conditions as of the statutory valuation date. The City submits that preventing this type of frivolous re-litigation was the reason the Board granted MPAC’s motion for issue estoppel in First Capital Holdings and Canadian Niagara; and being able to re-litigate decided values would undermine the assessment objectives of finality and certainty. This would prejudice the City in its ability to budget for the delivery of municipal services to all taxpayers.

Appellant’s Submissions

73The Appellant did not provide explicit submissions on the exercise of discretion. The Appellant’s submissions focused primarily on the preconditions to issue estoppel. That said, the Appellant generally submits that because the Board has a statutory duty to hear appeals and ensure that assessments are correct and equitable, it cannot be in the interest of justice to refuse to hear appeals raising issues never previously presented to the Board.

74The Appellant states that the “valuation date is not determinative of the whole question of the assessment for every year in the cycle” – the “current value” assessment for each annual assessment should reflect an updated “current value” of the property based on what it would have sold for on the valuation date had it been in its current state and condition at that time.

Findings on Issue 2

75For the reasons outlined above in relation to Issue 1, the Board does not accept the Appellant’s submission that a finding of issue estoppel is contrary to a taxpayer’s “annual right to appeal the assessment of its property” and contrary to the provisions of the Assessment Act.

76The Supreme Court has confirmed that discretion with respect to application of issue estoppel is “necessarily broader in relation to the prior decisions of administrative tribunals”: see Danyluk at paragraph 62. In the circumstances of this case, however, the Board finds that fairness and justice is achieved by applying issue estoppel. The Board finds that applying issue estoppel in this particular case would not work an injustice, for the following reasons:

1. There is no evidence of unfairness or a failure of natural justice in the 2017 to 2019 Appeals. The parties had legal representation and resolved the 2017 to 2019 Appeals amongst themselves. The parties sought Board decisions to give effect to their agreement on value as of January 1, 2016. While the parties may not have known at the time of settlement that the assessment cycle would be extended for additional years because of a pandemic, the purpose of the cycle extension was certainty and stability with respect to municipal taxation. The unforeseen circumstances of the pandemic do not outweigh the considerations of finality and certainty in these circumstances.

2. While a purpose of the Assessment Act is to achieve equity in taxation, it is also the intention of the statute to ensure a stable and reliable tax base which favours finality: see Toronto (City) v Municipal Property Assessment Corp, [2013] OJ No 4425, 2013 ONSC 6137, 315 OAC 279, 14 MPLR (5th) 183, 2013 CarswellOnt 13617, [2013] OJ No 4425 at paragraph 20. Given the Board’s conclusion that changes to the “state and condition” of the property are not a basis to change the value of the property as of the statutory valuation day, the impact of the pandemic on current value of the Subject Property as of January 1, 2016 would not be taken into account even if the Board declined to apply issue estoppel. In this way, the objective of equity in taxation does not weigh against applying issue estoppel in this case. Therefore, the Board finds that the objectives of the Act are best balanced and served by applying issue estoppel.

3. The circumstances of this case are nearly identical to the circumstances before the Board in First Capital Holdings and Canadian Niagara Hotels. The Board adopts and relies upon the analysis regarding the exercise of discretion that appears in those cases: see First Capital Holdings at paragraphs 42 to 43 and Canadian Niagara Hotels at paragraphs 37 to 38.

Issue 3 - Does abuse of process apply and, if it does, ought the Board to apply it?

77Since the Board has found that the three preconditions to the application of issue estoppel are satisfied, and that it ought to apply issue estoppel as a matter of discretion, the Board will not consider the arguments in relation to abuse of process.

CONCLUSION

78The Board finds that issue estoppel applies, and the Board is of the opinion that the proceeding is frivolous in accordance with Rule 24(b). For the reasons herein, the Board finds that dismissal of the 2021 to 2023 Appeals is appropriate.

ORDER

79The Board orders that the 2021 to 2023 Appeals are dismissed.