Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
February 28, 2023
FILE NO.:
DM 183047
Assessed Person(s):
Ministry of Transportation
Appellant(s):
HK Travel Centres; Host International of Canada Ltd.
Respondent(s):
Municipal Property Assessment Corporation Regions 02, 06, 13, 14, 16, 22 and 23
Respondent(s):
Township of Front of Yonge; Municipality of Port Hope; Municipality of Clarington; City of Vaughan; Town of Innisfil; Township of Puslinch; Township of South-West Oxford and Municipality of Dutton-Dunwich
Property Location(s):
See Schedule A
Municipality(ies):
Township of Front of Yonge; Municipality of Port Hope; Municipality of Clarington; City of Vaughan; Town of Innisfil; Township of Puslinch; Township of South-West Oxford and Municipality of Dutton-Dunwich
Roll Number(s):
See Schedule A
Appeal Number(s):
See Schedule A
Taxation Year(s):
2019, 2020, 2021 and 2022
Hearing Event No.:
778009
Legislative Authority:
Sections 33, 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Counsel*/Representative
Ministry of Transportation
Submissions not received
HK Travel Centres; Host International of Canada Ltd.
Kenneth R. West*
Municipal Property Assessment Corporation
Melissa Van Berkum*
Township of Puslinch and Municipality of Dutton-Dunwich
Cynthia Kuehl*
APPEARANCES - Continued
Parties
Counsel*/Representative
Township of Front of Yonge
Submissions not received
Township of South-West Oxford
Submissions not received
Town of Innisfil
Submissions not received
Municipality of Port Hope
Submissions not received
City of Vaughan
Submissions not received
Municipality of Clarington
Submissions not received
REQUEST FOR:
An Order for Disclosure
HEARD:
January 16, 2023 in writing
ADJUDICATOR(S):
Carly Stringer, Member
MOTION DECISION
OVERVIEW
1The Municipal Property Assessment Corporation (“MPAC”) has brought this motion seeking disclosure of the information listed in Attachment 1 (“Disclosure Requests”).
2MPAC is responding to appeals relating to 11 ONroute Service Centres located across the 400-series highways throughout the province of Ontario. MPAC is asking that the Assessment Review Board (the “Board”) order HK Travel Centers LP to disclose the Disclosure Requests on the basis that the information is relevant to the issues in dispute, and ordering disclosure is proportionate to the issues in dispute. MPAC also seeks amendments to the Schedules of Events (“SOE” or “SOEs”) to accommodate this motion.
3HK Travel Centers LP, HKSC Developments GP Inc., HKSC Opco GP Inc., and HKSC Opco LP (together, “HK Travel”) oppose the motion.
4The Municipality of Clarington, the Municipality of Dutton-Dunwich, the Township of Front of Yonge, the Town of Innisfil, the Township of Puslinch, the Municipality of Port Hope, the Township of South-West Oxford, and the City of Vaughan are statutory parties to these appeals. The Municipality of Dutton-Dunwich and the Township of Puslinch support MPAC’s motion. The Board has not received materials from the other municipalities.
Result
5For the reasons that follow, the Board denies MPAC’s request for disclosure.
PRELIMINARY MATTERS
Disclosure Request No. 1 - Proof that Host International and/or HK Travel served notice of its appeals on the Crown in right of Ontario
6Regarding Disclosure Request No. 1, HK Travel provided affidavit evidence that it sent letters with its Notices of Appeal to the Ministry of Transportation Operations Office in St. Catharines, Ontario. Therefore, the Board will make no order in respect of Disclosure Request No. 1.
ISSUES
7There are two general issues to be decided on this motion.
8The first relates to the timing of the motion and has two parts:
(a) Is MPAC outside of the timelines prescribed in the SOE for bringing this motion?
(b) If MPAC is outside of the timelines prescribed, are there exceptional circumstances that warrant the Board altering the SOE to permit this motion?
9If the Board is satisfied that MPAC is within the timelines prescribed in the SOE, or if the Board alters the timeline prescribed in the SOE to permit this motion, then the second issue is whether the Board should order disclosure. This second issue also has two parts:
(a) Is the information sought relevant to the issues in dispute?
(b) If the information sought is relevant, is its disclosure proportionate to the importance and complexity of the issues in dispute with a view to resolving appeals within the four-year cycle?
ANALYSIS
Issue 1 - Timing of the Motion
a) Is MPAC outside of the timelines prescribed in the SOE for bringing this motion?
Submissions of the Parties
10HK Travel submits that MPAC’s motion is far too late in the proceedings. HK Travel submits that MPAC was, or ought to have been, aware from the outset of the appeals that disclosure may be required. HK Travel submits that instead of actively seeking disclosure, MPAC’s request was brought after expert reports had been filed, some properties had already been settled, and others have been set for hearing or settlement conferences. HK Travel submits that the Board has held that disclosure requests must be brought in a timely manner.
11MPAC submits that there is an ongoing obligation to disclose, and that both MPAC and the participating municipalities have made numerous requests for disclosure from HK Travel. MPAC provided the following chart outlining the history of requests for disclosure:
Document Requested
Date Requested
Requesting Party
All leases, including the Head Lease, and agreements, including all schedules, between HK Travel Centers LP and its successors and assignees and the province that exist in connection with the ONroute locations
March 1, 2021
Puslinch
May 3, 2021
MPAC
May 21, 2021
MPAC
August 30, 2021
Puslinch
October 6, 2021
Dutton-Dunwich
October 25, 2021
MPAC
June 1, 2022
South-West Oxford
June 8, 2022
MPAC
June 16, 2022
South-West Oxford
June 20, 2022
MPAC
June 28, 2022
South-West Oxford
June 29, 2022
MPAC
July 13, 2022
MPAC
August 16, 2022
South-West Oxford
September 26, 2022
South-West Oxford
October 14, 2022
MPAC
A copy of the lease referenced in the Short Form of Lease
April 19, 2021
South-West Oxford
October 25, 2021
MPAC
June 20, 2022
MPAC
June 1, 2022
South-West Oxford
June 20, 2022
MPAC
June 28, 2022
South-West Oxford
June 29, 2022
MPAC
July 13, 2022
MPAC
August 16, 2022
South-West Oxford
September 26, 2022
South-West Oxford
October 14, 2022
MPAC
The Concession Agreement referenced in sections 5 and 7 of the OHSCPA
June 20, 2022
MPAC
June 29, 2022
MPAC
July 13, 2022
South-West Oxford
September 26, 2022
South-West Oxford
October 14, 2022
MPAC
Income information related to the tenancies at the ONroute locations, including rent rolls, leases, rent payments (including Capital and Concessions Rent, Percentage Rent, concession payments and Innovative Use Ground Rent), audited financial statements, and any other information related to the income received from the tenancies, and HK Travel’s expenses, from January 1, 2016, to present
March 1, 2021
Puslinch
April 19, 2021
South-West Oxford
October 25, 2021
MPAC
June 1, 2022
South-West Oxford
June 8, 2022
MPAC
June 16, 2022
South-West Oxford
June 20, 2022
MPAC
September 26, 2022
South-West Oxford
October 14, 2022
MPAC
12MPAC submits that HK Travel has not produced any of the documents or information requested.
13MPAC further submits that the deadline to bring this motion is not engaged as HK Travel’s expert raises the income approach in his reports delivered after the SOE deadline to bring a motion for disclosure.
14The Municipality of Dutton-Dunwich and the Township of Puslinch adopt and rely on MPAC’s submissions.
Findings on Issue 1(a)
15There are 11 SOEs the Board must consider - one for each of the 11 ONroute properties.
16The Board has reviewed each SOE and finds that the latest deadline for “[a]ny objection regarding a request for an inspection or a request for additional disclosure… to be resolved by motion” is contained in SOE No. 44855 relating to 6400 Highway 400. That deadline was October 4, 2021. The SOEs applicable to the other ten properties had earlier deadlines, on various dates between December 2020 and August 2021.
17MPAC filed an Expedited Board Direction form on November 14, 2022 to bring this motion for disclosure, with a Notice of Motion dated November 30, 2022.
18The Board does not accept MPAC’s submission that the deadline to bring a motion for disclosure is not engaged because HK Travel’s expert raised the income approach as an issue after the SOE deadlines for disclosure. The Board finds that while this may be a factor the Board considers as an exceptional circumstance that could warrant an amendment to the SOE, it does not change the clearly stated deadline contained in each SOE applicable to the subject properties.
19Further, this submission belies MPAC’s evidence that it made numerous requests for production well before it received HK Travel’s expert reports. MPAC’s materials state that HK Travel’s expert reports were delivered on various dates between February 14, 2022 and September 13, 2022. MPAC provided a detailed chart outlining repeated demands for production starting as early as April 19, 2021 (see paragraph 11 above).
20Given that the latest SOE deadline to bring a motion for disclosure from the Appellant was October 4, 2021, and MPAC brought this motion for disclosure on November 14, 2022, the Board finds that MPAC is outside the timelines prescribed in the SOEs for resolving this request for additional disclosure.
21Therefore, in order to proceed, the Board would have to alter the SOEs.
b) Are there exceptional circumstances that warrant the Board altering the Schedule of Events?
Applicable Rules and Law
22Rule 40 of the Board’s Rules of Practice and Procedure (the “Rules”) states that once a SOE has begun, “… the Board will not alter any due date set out in the Schedule of Events other than in exceptional circumstances.”
23In IG Investment Management Ltd. v Municipal Property Assessment Corporation, Region 32, 2020 CanLII 83829 (ON ARB) at paragraph 10, the Board confirmed that “[e]xceptional means, among other things, something that does not occur regularly, something unusual, or something atypical…”
24Therefore, MPAC must satisfy the Board that there are exceptional circumstances warranting an extension to the SOE to permit this late request for additional disclosure.
25Several other Rules are relevant. Rule 3 provides that the Rules “shall be liberally interpreted to ensure the just, most expeditious and least expensive determination of every proceeding.”
26Rule 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.”
27Rule 7 provides that “[t]he Board will determine the appropriate consequences of non-compliance with these Rules.”
Submissions of the Parties
28HK Travel submits that MPAC has not established exceptional circumstances to warrant amending the SOE to allow for its late motion for disclosure.
29MPAC did not explicitly address exceptional circumstances in its initial submissions. However, MPAC did reference an ongoing obligation to disclose relevant documents. MPAC submits that the ongoing obligation to disclosure is engaged because the income approach was raised for the first time by HK Travel’s expert in his valuation reports for eight of the ONroute properties (delivered between February 14, 2022 and June 14, 2022).
30In Reply, MPAC submits that the timing of its motion should be considered against HK Travel’s conduct. MPAC submits that 42 demands were made by it and various municipalities for the Disclosure Requests, and on more than one occasion HK Travel’s representatives indicated the information would be provided. MPAC submits this prolonged resistance followed by an eventual refusal to produce constitutes exceptional circumstances. MPAC submits that HK Travel should not be able to rely on complaints of delay by MPAC in these circumstances.
31The Municipality of Dutton-Dunwich and the Township of Puslinch adopt and rely on MPAC’s submissions. The Township of Puslinch further submits that although this motion has been brought later than contemplated in the SOE, matters of scheduling ought not to trump the importance of ensuring that the Board is able to complete its substantive obligation to determine the correct current value assessment. The Township submits that HK Travel has a positive obligation, regardless of the timing, to produce the information requested.
Findings on Issue 1(b)
32The Board finds there are no exceptional circumstances warranting an amendment to the SOE to allow this request for additional disclosure at this late stage in the proceedings, for the following reasons:
(a) While MPAC submits that the income approach was not raised until HK Travel’s expert reports, MPAC’s own evidence is that it requested lease information as early as May 2021 and income information as early as October 2021, while at least two municipalities began requesting both lease and income information in March and April of 2021. The evidence is clear that the responding parties identified a need for the Disclosure Requests far in advance of HK Travel’s expert reports, and could have brought a motion at that time.
(b) Even if the income approach was not raised until HK Travel served its expert reports, the Board finds that MPAC ought to have identified any additional disclosure required from HK Travel in order for MPAC to prepare and serve its responding expert report. While MPAC states that its expert requires that information to perform their own income approach and respond to HK Travel’s expert, MPAC nevertheless delivered its responding expert reports on various dates between March 3 and October 4, 2022 for all but one of the ONroute properties. Inexplicably, this motion was not brought until November 14, 2022. The Board finds that if MPAC’s expert required the information contained in the Disclosure Requests to provide their expert opinion, and that information was not forthcoming before MPAC’s expert prepared their responding report, MPAC ought to have brought its request for additional disclosure prior to preparing and serving its responding expert reports. MPAC has not explained why it waited until November 14, 2022 to bring a motion, months past the applicable deadlines for serving expert reports and, in some appeals, after settlement conferences and even hearings were scheduled.
(c) The Board does not accept MPAC’s submission that HK Travel’s conduct is an exceptional circumstance warranting an extension to the SOE. MPAC provided evidence that both it and several municipalities commenced requesting disclosure as early as March 1, 2021. It is the obligation of each party to ensure they get the information they require within the appropriate timeframe. A refusal or delay relating to disclosure can occur as a matter of course, which is why the SOE contemplates the timing of disclosure and motions related thereto: see for instance Greater Sudbury (City) v Municipal Property Assessment Corporation, Region 30, 2021 CanLII 19610 (ON ARB) at paragraph 26. This is not an exceptional circumstance.
(d) The Board finds that MPAC has not satisfactorily explained its failure to bring a timely motion in the face of HK Travel’s unwillingness to disclose the documents that it and several municipalities were requesting. If the information in the Disclosure Requests is required for MPAC and its expert to respond to HK Travel’s appeals, MPAC ought to have taken steps much earlier to bring this motion. MPAC is a sophisticated party that appears before this Board on a regular basis, and should be very familiar with the Board’s Rules, the timelines prescribed in the SOEs, and the Board’s expectations that motions for disclosure must be brought in a timely way. There is nothing exceptional that explains why MPAC waited to submit its request to the Board until over 40 requests for disclosure were made between March 1, 2021 and October 14, 2022, almost all of its responding expert reports were already prepared and served, and hearing events were scheduled.
33The Board requires strict compliance with its Rules, unless there is good reason to depart from them. Parties are expected to complete their pre-hearing exchange of disclosure, and motions related thereto, in a timely way to properly complete their pleadings and expert reports. It is important to note that settlement conferences have already been held for eight of these ONRoute properties, with hearings now scheduled for March, April and May for five (5) of the 11 properties. The delay that would be caused in this case is significant, given the stage of these proceedings. The Board finds there are no exceptional circumstances warranting an amendment to the SOE to permit MPAC’s motion for disclosure at this late stage.
c) Conclusion on Timing of the Motion
34The Board finds that MPAC is outside of the timeline contemplated in the SOE for resolving motions for disclosure. The Board finds there are no exceptional circumstances warranting an amendment to the SOEs to allow the motion at this stage in the proceedings. Accordingly, MPAC’s motion is denied.
ORDER
35The Board orders that this motion is denied.
36A hearing was scheduled to begin on January 11, 2023 for appeals relating to 290 Highway 401 West (appeal numbers 3381565, 3409484, 3447935 and 3490069). This hearing was adjourned pending resolution of this motion. Therefore, the Board will reschedule the hearing adjourned from January 11, 2023. Neither party provided the Board with return dates in the event this disclosure motion were denied, and therefore the parties are directed to confer with one another and, within seven days of this decision being issued, provide the Case Coordinator with three potential hearing dates in April 2023. The Case Coordinator will provide the parties with Notice of Hearing.
37The Parties have not advised of the impact, if any, of this motion on the timing applicable to the remaining appeals. Accordingly, the Board will make no order in relation to the SOEs or scheduled hearing events for the remaining ONroute properties.
"Carly Stringer"
CARLY STRINGER
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
SCHEDULE A
No
Roll Number
Address
Region
Assessed Person
Year
3389297
0806 000 010 15901 0000
678 to 0 HIGHWAY 401 WES
02
TRANSPORTATION MINISTRY
2019
3395877
0806 000 010 15901 0000
678 to 0 HIGHWAY 401 WES
02
TRANSPORTATION MINISTRY
2020
3438907
0806 000 010 15901 0000
678 to 0 HIGHWAY 401 WES
02
TRANSPORTATION MINISTRY
2021
3486183
0806 000 010 15901 0000
678 to 0 HIGHWAY 401 WES
02
TRANSPORTATION MINISTRY
2022
3492655
0806 000 010 15901 0000
678 to 0 HIGHWAY 401 WES
02
TRANSPORTATION MINISTRY
2021
3492656
0806 000 010 15901 0000
678 to 0 HIGHWAY 401 WES
02
TRANSPORTATION MINISTRY
2022
3381562
1423 223 040 48300 0000
845 to 0 HIGHWAY 401
06
TRANSPORTATION MINISTRY
2019
3398029
1423 223 040 48300 0000
845 to 0 HIGHWAY 401
06
TRANSPORTATION MINISTRY
2020
3440226
1423 223 040 48300 0000
845 to 0 HIGHWAY 401
06
TRANSPORTATION MINISTRY
2021
3468155
1423 223 040 48300 0000
845 to 0 HIGHWAY 401
06
TRANSPORTATION MINISTRY
2021
3486768
1423 223 040 48300 0000
845 to 0 HIGHWAY 401
06
TRANSPORTATION MINISTRY
2022
3486777
1423 223 040 48300 0000
845 to 0 HIGHWAY 401
06
TRANSPORTATION MINISTRY
2022
3392320
1817 030 020 06400 0000
3962 to 0 VIVIAN DR
13
TRANSPORTATION MINISTRY
2019
3402842
1817 030 020 06400 0000
3962 to 0 VIVIAN DR
13
TRANSPORTATION MINISTRY
2020
3443153
1817 030 020 06400 0000
3962 to 0 VIVIAN DR
13
TRANSPORTATION MINISTRY
2021
3488022
1817 030 020 06400 0000
3962 to 0 VIVIAN DR
13
TRANSPORTATION MINISTRY
2022
3381566
1928 000 272 65000 0000
11200 to 0 HIGHWAY 400
14
TRANSPORTATION MINISTRY
2019
3403902
1928 000 272 65000 0000
11200 to 0 HIGHWAY 400
14
TRANSPORTATION MINISTRY
2020
3444325
1928 000 272 65000 0000
11200 to 0 HIGHWAY 400
14
TRANSPORTATION MINISTRY
2021
3488233
1928 000 272 65000 0000
11200 to 0 HIGHWAY 400
14
TRANSPORTATION MINISTRY
2022
3381564
2301 000 003 23300 0000
289 to 0 HIGHWAY 401 E
22
TRANSPORTATION MINISTRY
2019
3409641
2301 000 003 23300 0000
289 to 0 HIGHWAY 401 E
22
TRANSPORTATION MINISTRY
2020
3448021
2301 000 003 23300 0000
289 to 0 HIGHWAY 401 E
22
TRANSPORTATION MINISTRY
2021
3490036
2301 000 003 23300 0000
289 to 0 HIGHWAY 401 E
22
TRANSPORTATION MINISTRY
2022
3392322
3211 011 010 23800 0000
0 to 0 SERVICE CENTRE
23
TRANSPORTATION MINISTRY
2019
3409753
3211 011 010 23800 0000
0 to 0 SERVICE CENTRE
23
TRANSPORTATION MINISTRY
2020
3448328
3211 011 010 23800 0000
0 to 0 SERVICE CENTRE
23
TRANSPORTATION MINISTRY
2021
3490270
3211 011 010 23800 0000
0 to 0 SERVICE CENTRE
23
TRANSPORTATION MINISTRY
2022
3471555
3211 011 010 25200 0000
0 to 0 HIGHWAY 401
23
TRANSPORTATION MINISTRY
2021
3490166
3211 011 010 25200 0000
0 to 0 HIGHWAY 401
23
TRANSPORTATION MINISTRY
2022
3392321
3211 011 010 25300 0000
0 to 0 SERVICE CENTRE
23
TRANSPORTATION MINISTRY
2019
3409898
3211 011 010 25300 0000
0 to 0 SERVICE CENTRE
23
TRANSPORTATION MINISTRY
2020
3381563
3429 000 003 05800 0000
0 to 0
23
TRANSPORTATION MINISTRY
2019
3410002
3429 000 003 05800 0000
0 to 0
23
TRANSPORTATION MINISTRY
2020
3448390
3429 000 003 05800 0000
0 to 0
23
TRANSPORTATION MINISTRY
2021
3490322
3429 000 003 05800 0000
0 to 0
23
TRANSPORTATION MINISTRY
2022
3394963
3429 000 003 06100 0000
0 to 0
23
TRANSPORTATION MINISTRY
2019
3409862
3429 000 003 06100 0000
0 to 0
23
TRANSPORTATION MINISTRY
2020
3448151
3429 000 003 06100 0000
0 to 0
23
TRANSPORTATION MINISTRY
2021
3490266
3429 000 003 06100 0000
0 to 0
23
TRANSPORTATION MINISTRY
2022
3386859
4316 010 001 12400 0000
6400 to 0 HIGHWAY 400
16
TRANSPORTATION MINISTRY
2019
3407345
4316 010 001 12400 0000
6400 to 0 HIGHWAY 400
16
TRANSPORTATION MINISTRY
2020
3446358
4316 010 001 12400 0000
6400 to 0 HIGHWAY 400
16
TRANSPORTATION MINISTRY
2021
3489311
4316 010 001 12400 0000
6400 to 0 HIGHWAY 400
16
TRANSPORTATION MINISTRY
2022
Attachment 1: Disclosure Requests
Request
Description
1
Proof that Host International and/or HK Travel served notice of its appeals on the Crown in right of Ontario
2
Copies of all leases, licenses, agreements, assignments, subleases and any other related documentation of every tenant, subtenant and/or entity in occupation and possession of any part of the appealed premises, or those described in such agreements, for the years 2013 up to the date of hearing of all of the service centres below in the care and control of the Respondents and their subsidiaries and assignees and including, but not limited to:
a. A copy of the Lease Agreement referenced in the Short Form of Lease between the Crown and HKSC Developments (Instruments LE39216, LE39377, WC382887, WC382890, CO80172, CT72537, CT99033, ND65626, and SC1199616);
b. A copy of the Lease between the Crown in right of Ontario, Ministry of Transportation (Crown), Infrastructure Ontario and Imperial Oil/ McColl-Frontenac Petroleum Inc (Instruments LT1472005, 439253, LT952953);
c. A copy of all leases or subleases involving the Crown, HKSC Developments, HKSC OPCO, CTC KDL Fuelco, and/or HK Travel Centers;
d. Any leases or subleases HK Travel Centers has entered into with other subtenants, such as the food vendors at these locations;
e. The Concession Agreement referenced in sections 5 and 7 of the Ontario Highway Service Centers Project Agreement (“OHSCPA”); and
f. Any of the agreements referenced in sections 5 and 7 of the OHSCPA or that arise as a consequence of the execution of OHSCPA
3
Income information related to the tenancies at the ONroute locations, including rent rolls, leases, rent payments (including capital and Concessions Rent, Percentage Rent, Concession Payments, and Innovative Use Ground Rent), audited financial statements, vacancy and expense allowance analysis and any other information related to the income received from the tenancies, and HK Travel’s expenses, from January 1, 2013, to present.
4
All information related to the development of the Innisfil ONroute service center, including development pro-formas, any planning or zoning reviews, and any other reports, analysis or opinions, studies, source data, and/or information related to the development of the property in anticipation of the 2013 sale and thereafter
5
Copies of any appraisals of any type or opinions of value for any of the ONroute Service Centres since the head lease entered into between Crown in right of Ontario and any related corporation to HK Travel.
6
Copies of any term sheets prepared in advance of the OHSCPA and the transfer to HK Travel Centers LP, and its related companies, and the Final Statement of Adjustments referred to at para. 5.11(iv) of the OHSCPA.