Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: July 14, 2023 FILE NO.: RD 22-039CA AMENDED DECISION ISSUED: August 23, 2023

Assessed Person(s): 388210 Ontario Limited Appellant(s): 388210 Ontario Limited Respondent(s): Municipal Property Assessment Corporation Region 15 Respondent(s): City of Brampton Property Location(s): 0 Centre Street Municipality(ies): City of Brampton Roll Number(s): 2110-090-039-10115-0000 Taxation Year(s): 2005 to 2016 Legislative Authority: Rules 101-103 of the Assessment Review Board’s Rules of Practice and Procedure

Parties	Counsel/Representative*
388210 Ontario Limited	Bob Gardiner
Municipal Property Assessment Corporation	Matthew Kanter; Tim Harrison*
City of Brampton	John L O’Kane

REQUEST FOR: A review of the Board’s Decision DM 2020M04 issued on January 22, 2020 HEARD: In writing ADJUDICATOR(S): Dirk VanderBent, Vice-Chair

AMENDED DECISION

AMENDED DECISION

In accordance with Rule 99 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1 2021, related to the correction of minor errors and in accordance with section 21.1 of the Statutory Powers and Procedure Act regarding the correction of errors, this Amended Decision is issued to correct error(s) in the Decision regarding the correct spelling of the first name for counsel for MPAC on page 1. The amendments have been underlined for ease of reference. There are no other changes in this Amended Decision.

OVERVIEW

1On June 1, 2020, the Municipality, the City of Brampton (the “City”) filed a written Request for Review with the Assessment Review Board (the “Board”) respecting Municipal Property Assessment Corporation v 388210 Ontario Limited, 2020 CanLII 5708 (ON ARB) DM 2020M04, a decision issued on January 22, 2020 (the “Decision”).

The Decision

2The Decision addresses an application made by the Municipal Property Assessment Corporation (“MPAC”), pursuant to s. 40.1(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), to correct errors in the assessment roll for the 2005 to 2016 taxation years. Section 40.1 states:

Correction of errors

40.1 If it appears that there are palpable errors in the assessment roll,

a) if no alteration of assessed values or classification of land is involved, the Board may correct the roll; and

b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing appeals and direct the assessment corporation to be the appellant.

The City and the Property Owner both supported MPAC's application.

3The application is in respect of a property, known municipally as 0 Centre Street, Brampton (the “Subject Property”), which is improved by a recreation centre that serves the residents of three adjacent not-for-profit residential condominiums. The Subject Property is owned by a corporation whose shareholders are the three condominiums.

4The palpable errors alleged relate to the fact that MPAC separately assessed the Subject Property because it is owned by a separate corporation. The parties all agree it should have been assessed as a common element of the three condominiums.

5The Municipality first became aware of the errors in 2009, and it appeared that the Property Owner became aware in 2011.

6There is some complexity to the nature of the corrections to be made to the assessment roll for the taxation years in question. In overview, the parties agree that the corrections would involve alterations to both current value of the Subject Property and its property classification.

7In the Decision, the Hearing Member appears to have accepted that there were errors in the assessment roll for the taxation years in question. However, he relied on the finding in Municipal Property Assessment Corporation, Region No. 03 v Ottawa (City), 2019 CanLII 101175 (ON ARB) that s. 40.1 is the only part of the Act that does not have a limitation period, and, consequently, it is an extraordinary remedy to be used sparingly, or the balance of the Act will be undermined. He then found that the errors were not “palpable” errors because:

1. A palpable error must be inadvertent and unintentional:

i. The Hearing Member accepted that the errors were inadvertent and unintentional at the outset, but that this ceased to be the case by 2011 when the errors came to the Property Owner’s attention. He found that the errors were known at that time and could have been addressed through the timely filing of an appeal pursuant to s. 40 of the Act: see paragraphs 22 and 23.

ii. He relied on the finding in two Board decisions, Jolis and Kinglip (citations below), that a palpable error must be more than just an error in judgment which would be the subject of an appeal, stating that this further suggests that an error is not palpable when a party becomes aware of an error, yet fails to file an appeal: see paragraph 24.

2. A palpable error must be plain, obvious, easily perceived, conspicuous in magnitude and easy to understand:

i. He found that the errors in this case were not plain, obvious, and easily perceived because a detailed investigation was required to identify them: see paragraph 26.

8The Hearing Member then identified that, if he had found that the errors were palpable, the next step would be to determine if he would exercise his discretion to correct the errors. He stated that it was unnecessary to address this issue, as he had found that there were no palpable errors. However, he alternatively proceeded to provide analysis in support of his conclusion that, even if there were palpable errors, he would not exercise his discretion to correct them. His reasons were as follows:

1. He relied on the finding in a Board Review decision, Piggott - Review (citation below), that the Board should only exercise its discretion to correct palpable errors if it would be unreasonable, unfair, and highly prejudicial to enforce the statutory filing deadlines under the s. 40 appeal section of the Act in light of the palpable error: see paragraph 30.

2. In applying the above test in the specific circumstances of this case:

i. He found that a delay of a decade to submit a request is unreasonable, stating that the parties had acknowledged the very lengthy delay was due to their mismanagement: see paragraph 33.

ii. He relied on the finding in Wellington (citation below) that “it is not unfair to decline to correct an error when a party fails to file s. 40 appeals in a timely way due to their own negligence”: see paragraph 36.

iii. He relied on the finding in CNR (citation below) that there must be more than simple inadvertence or carelessness in order for the Board to exercise the extraordinary remedy of correcting a palpable error.

Parties’ Position on this Request for Review

9The parties agree that the Decision should be varied to indicate that there are palpable errors in the assessment roll for each of the taxation years in question and that the Board should exercise its discretion to correct these palpable errors. Neither the City nor the Property Owner claimed that they would be prejudiced: (i) if the errors were corrected or (ii) if the errors were not corrected.

10In the City’s submissions filed in support of this Request for Review, the City indicates that correcting the errors will require corrections to both assessed values and property classification, and, therefore, pursuant to s. 40.1(b), the Board should extend the time for bringing appeals for each of the taxation years in question. The City further states that, once the appeals are created, the parties will file Minutes of Settlement to effect the corrections to the assessment rolls for these taxation years.

RELEVANT RULES

11In considering whether to grant a request for review submitted pursuant to Rule 101 of the Board’s Rules of Practice and Procedure (the “Rules”), the test to be applied is whether the requester has established any of the grounds set out in Rule 102 which states:

Grounds for Review

102. 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;

(c) the Board heard false or misleading evidence from a party or witness, which was discovered only after the hearing and would have affected the result; or

(d) there is new evidence that could not have reasonably been obtained earlier and have affected the result.

12The Board’s powers in considering a request for review are set out in Rule 103 which states:

Review Order

103. Upon considering a request for review, or on its own initiative, the Board may:

(a) dismiss the request; or

(b) after providing all parties an opportunity to make submissions:

i. confirm, vary, or cancel the decision; or

ii. order a rehearing on all or part of the matter.

ISSUES

13In its Request for Review, the City challenges each of the findings made by the Hearing Member, as described above. Based on the City’s submissions summarized below, there are three questions the Board must address:

1. Did the Hearing Member make a significant error of law or fact such that the Board would likely have reached a different decision?

2. Did the Hearing Member act outside his jurisdiction or violate the rules of natural justice or procedural fairness?

3. If the answer to either question 1 or 2 is yes, should the Board vary the Decision or order a new hearing?

SUBMISSIONS

14The Board requested submissions from the parties. The Property Owner supports the submissions made by the City. MPAC requests that the Board correct the palpable error for all taxation years, but makes no other submissions.

15The Board does not find it necessary to recite the City’s submissions in detail. In overview, regarding the first ground, the City asserts that the Hearing Member adopted a test that is not set out in s. 40.1 of the Act; created a test that renders the Legislature’s intention in s. 40.1 all but meaningless; and misapprehended or failed to account for the evidence before the Board.

16Regarding the second ground, the City asserts that the Hearing Member failed to correctly interpret s. 40.1 in the context of the legislative scheme for property assessment and taxation; misapprehended the legal standard of proof on a palpable error motion; misapprehended or ignored the purposes of the s. 40.1; ignored the sole and uncontroverted evidence; and issued reasons that fail to provide a rational and logical analysis supporting the conclusions. On a separate point, the City also argues that the Hearing Member breached procedural fairness by not inviting the parties to make submissions about jurisprudence that he researched and incorporated into his reasons for decision.

RESULT

17The Hearing Member has made significant errors of law such that the Board would likely have reached a different decision. The Decision is varied to grant the parties’ request to extend the time for filing appeals for the purpose of correcting the errors for each of the 2005 to 2016 taxation years. The Hearing Member was not required to invite the parties to make additional submissions, and, therefore, there is no breach of procedural fairness.

ANALYSIS

Introduction

18The Board begins by observing the findings in the decisions cited by the Hearing Member in the Decision are based on findings made in a longer line of previous Board and Superior Court jurisprudence. In challenging the Hearing Member’s findings, the City’s submissions raise broad fundamental questions regarding the interpretation and application of s. 40.1. For this reason, the Board has undertaken a comprehensive review of the statutory interpretation of s. 40.1 and relevant jurisprudence, in which the Board makes findings respecting the purpose of s. 40.1 and how it is to be interpreted and applied. In doing so, the Board has made specific findings which are relevant to the issues to be addressed in this Review. Therefore, the Board begins with its review of s. 40.1, followed by its analysis of the two issues to be addressed in this Review proceeding.

Review of the requirements of s. 40.1 of the Act

Additional Relevant Statutory Provisions

19For purposes of the Board’s analysis, the Board also refers to two other provisions of the Act which refer to correction of errors and omissions:

Correction of errors, etc., in assessment roll

32 (1) Despite the delivery of any notice provided for under this Act, the assessment corporation at any time before the time fixed for the return of the assessment roll may correct any defect, error, omission or misstatement in any assessment and alter the roll accordingly. . . .

Same, factual error only

(1.1) Despite the delivery of any notice provided for under this Act, for 2009 and subsequent taxation years, the assessment corporation may, at any time during the taxation year, correct any error in the assessment or classification of a property that has resulted from incorrect factual information about the property, and not from a change in opinion as to current value, . . . [Emphasis added.]

Change re land omitted from tax roll

33 (1) The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

1. The assessment corporation shall make any assessment necessary to correct the omission.

Section 40.1 Criteria

20For ease of reference, the Board re-iterates that s. 40.1 states:

Correction of errors

40.1 If it appears that there are palpable errors in the assessment roll,

a) if no alteration of assessed values or classification of land is involved, the Board may correct the roll; and

b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing appeals and direct the assessment corporation to be the appellant.

21The criteria imposed by s. 40.1 must be established in the following order:

1. there must appear to be an error in the assessment roll;

2. the error must be “palpable”;

3. if there is a “palpable error” it must be determined whether the error will require alteration of assessed value or classification, as this will determine whether the Board may itself correct the roll, or whether the Board may extend time for bringing the appeals and direct that MPAC be the appellant; and

4. if there is a “palpable error”, the Board must decide if it will exercise its discretion to correct the error.

22Section 40.1 does not prescribe a limitation period for when a request to correct can be made. In comparison, s. 32 only allows MPAC to make a correction during a calendar year prior to the return of the assessment roll and for a current taxation year. When correcting an omission, s. 33 only allows for a correction in the current and two preceding taxation years. Under the s. 40 appeal process, the Board may only correct an error or omission for the taxation year in which an appeal is filed. Therefore, but for s. 40.1, uncorrected errors or omissions that occur prior to these specified taxation years could not be corrected.

23On a separate point, the Board observes that s. 40.1 does not state who may apply under s. 40.1 or who the parties may be. As this section imposes no restrictions, it appears that any person can apply. Obviously, the Property Owner, MPAC and the Municipality are all affected by an order made under s. 40.1, so the Board considers them to be parties to a s. 40.1 application.

Case Citations of Relevant Jurisprudence

24Sections 40.1, 32 and 33 are longstanding statutory provisions in the Act. They have been the subject of a number of Board appeals and court proceedings over the years, as either initial applications to the Board or the Superior Court or appeal/review proceedings before the Divisional Court. As the Board will reference several of these Board and court decisions, the citations for these cases are provided in the following Table. This Table indicates the issuance date for each decision because the chronology of the issuance dates for some of these decisions is of considerable importance in the Board’s analysis, as is discussed later in this Review Decision.

ISSUE DATE	DECISION
June 15, 2007	Norjohn Transfer Systems Inc. v. Municipal Property Assessment Corp., Region No 15 [2007] O.A.R.B.D. No. 464 (“Norjohn”) Note: leave to appeal subsequently denied.
June 8, 2010	East of Bay (2003) Development Corp. v MPAC, 2010 ONSC 3337 (“East of Bay – S.C.”)
January 13, 2011	East of Bay v. MPAC, 2011 ONSC 242 (“East of Bay - Div. Ct.”)
March 11, 2011	Jolis Investments Ontario Ltd. v. Municipal Property Assessment Corp. Region No. 14, [2011] O.A.R.B.D. No. 143
March 16, 2011	Municipal Property Assessment Corp., v. Marcoccia, et al [2011] OARBD No 142, 68 OMBR 253 (“Marcoccia”)
November 10, 2011	Sarnia (City) v. Municipal Property Assessment Corp., Region No 26, [2011] O.A.R.B.D. No 392 (“Sarnia”)
December 18, 2013	The Kensington Foundation v. Municipal Property Assessment Corporation et al., 2013 ONSC 7694 (“Kensington - Div. Ct.”)
January 30, 2015	Kinglip Holdings Inc. v. Municipal Property Assessment Corp. Region No. 9, 2015 CarswellOnt 1733 (“Kinglip”)
February 12, 2015	Scott v. Municipal Property Assessment Corp., Region No. 15, [2015] O.A.R.B.D. No. 64 (“Scott”)
June 10, 2015	Brockville (City) v Municipal Property Assessment Corporation Region 02, 2015 CanLII 154806 (ON ARB) (“Brockville”)
November 26, 2015	Municipal Property Assessment Corporation Region 09 v Chew, 2015 CanLII 78969 (ON ARB) (“Chew”)
March 16, 2016	Bona Building & Management Company Limited v Municipal Property Assessment Corporation, 2015 ONSC 7824 (“Bona – S.C.”)
April 22, 2016	Hopper v Municipal Property Assessment Corporation, Region 15, 2016 CanLII 24421 (ON ARB) (“Hopper – Review”)
September 12, 2016	Brockville (City) v Municipal Property Assessment Corporation, 2016 ONSC 5752; (“Brockville – Div. Ct.”) Note: Although leave to appeal was granted, no appeal decision was subsequently issued.
January 04, 2018	Municipal Property Assessment Corporation v Guelph Eramosa Township, 2018 CanLII 263 (ON ARB) (“Grand River”)
April 09, 2018	Wellington (County) v Municipal Property Assessment Corporation, Region 22, 2018 CanLII 32198 (ON ARB) (“Wellington”)
November 14, 2018	Municipal Property Assessment Corporation, Region 28 v Callander (Municipality), 2018 CanLII 110104 (ON ARB) (“Piggott”) Note: Although has styled MPAC as the Moving Party, Piggott is, in fact, the Moving Party.
February 14, 2019	Bleau v. Municipal Property Assessment Corp., Region 1, [2019] O.A.R.B.D. No. 58 (“Bleau”)
November 15, 2019	Piggott v Municipal Property Assessment Corporation, Region 28, 2019 CanLII 109527 (ON ARB) (“Piggott - Review ”)
May 02, 2019	York Condominium Corporation No. 60 v Municipal Property Assessment Corporation, Region 09, 2019 CanLII 39632 (ON ARB) (“York Condominium”)
November 27, 2019	Canadian National Railway v Municipal Property Assessment Corporation, Region 19, 2019 CanLII 114732 (ON ARB) (“CNR”)
March 23, 2020	Janovjak v Municipal Property Assessment Corporation, Region15, 2020 CanLII 24884 (ON ARB) (“Janovjak”)
April 22, 2020	Municipal Property Assessment Corporation, Region 15 v. Peel Condominium Corporation No. 408 and Golf Links Canada Inc., 2020 CanLII 30605 (ON ARB) (“Peel ”)

Purpose of s. 40.1

Statutory Interpretation

25Principles of statutory interpretation require that the Board must consider the legislative intent expressed in the text, context, and purpose of s. 40.1, interpreting this section harmoniously with other sections of the Act in a manner consistent with the overarching purpose of the Act.

26The Board begins by noting that s. 40.1 does not impose a limitation period for submitting an application to correct a palpable error, whereas the appeal provision in s. 40 of the Act does, and sections 32 and 33 provide limited timeframes in which corrections can be made. In enacting s. 40.1 without imposing a limitation period, the Legislature was obviously aware of the timeframes prescribed in other sections of the Act. Consequently, it is clear that the purpose of s. 40.1 is remedial, in that the Legislature has enacted a separate section to correct certain errors which have not been corrected under other sections of the Act. Therefore, the purpose of s. 40.1 is to provide for a process to amend the assessment roll that is supplementary to the other provisions of the Act. Accordingly, s. 40.1 is not an exception to the s. 40 appeal process, nor is it contrary to the other provisions of the Act. As stated by the Divisional Court in 1609830 Ontario Limited v. Municipal Property Assessment Corporation, Region No. 9, 2008 CanLII 47726 (ON SCDC) at paragraph 14:

The individual sections of the Assessment Act are inter-dependant [sic], and must be read in context and purpose of entire Act, which is to regulate the orderly and fair collection of public taxes based upon an accurate assessment roll. [Emphasis added.]

27In arriving at this conclusion, the Board has also considered the following points. First, the Board notes that, had the Legislature intended to limit the application of s. 40.1 to matters that could not be addressed by MPAC under s. 32 and s. 33, or by the Board in a s. 40 appeal proceeding, it could have included such a prerequisite condition in s. 40.1. The Legislature has chosen not to do so.

28Second, the Board rejects the proposition that s. 40.1 is designed to address a “sub-class” of errors which could not be addressed through the s. 40 appeal process. The Hearing Member in Chew generically describes these errors as “factual errors, which are not the subject of serious debate”. The Board observes that such factual errors can be addressed in a s. 40 appeal, and, therefore, this “sub-class” distinction is meaningless.

29Third, the remedy provided in s. 40.1 is significantly narrower in scope than the remedy provided by the s. 40 appeal process. In this regard, the Board notes the Legislature imposed restrictive conditions in s. 40.1, namely: (i) the requirement that there must be an error; (ii) that error must be palpable; and (iii) that correcting a palpable error is not “as of right”, because the Legislature has given the Board discretion to decide whether a palpable error should be corrected. In comparison, a party in a s. 40 appeal can challenge any aspect of MPAC's assessment - including MPAC’s opinion as to current value - “as of right” without first having to establish that there is a factual error in the assessment roll. Therefore, the Board does not accept that s. 40.1 can be characterized as an alternate remedy that could be misused for the purpose of avoiding the requirement to file appeals under s. 40. Any person who chooses not to file an appeal under s. 40, and, instead, applies under s. 40.1, significantly narrows both the grounds which the person can advance, and the degree of certainty that the relief requested will be granted, since correction of an error is discretionary rather than “as of right”.

Balance between integrity and finality in the assessment roll

Presumed Conflict between s. 40 and s. 40.1

30In reaching the above conclusions respecting the purpose of s. 40.1, the Board recognizes that, in Piggott – Review, the Board endorsed the finding in Grand River (citing Chew) that s. 40.1 is a residual measure to be employed only if it would be unreasonable, unfair, and highly prejudicial to enforce statutory deadlines set out in other sections of the Act. In addressing this characterization of s. 40.1, the Board observes that it is not so much a statement of the purpose of s. 40.1 as it is a statement of an assumption that s. 40.1 undermines other sections of the Act because it does not impose any timeframe within which a palpable error may be corrected. Consequently, the conclusion is that the Board must constrain the exercise of its discretion under s. 40.1 in order to minimize this conflict.

31This concern raises the question: why did the Legislature consider it necessary to include s. 40.1 in the Act? The Legislature could have implemented a regime under s. 32, 33 and 40 of the Act which provided for a complete regime for correction of errors, i.e. for the purpose of finality of assessment, errors that have not been identified and corrected within the time frames prescribed in these sections need not be addressed. While this is a policy decision the Legislature could have made, it clearly has not done so. By including s. 40.1 in the Act, it is clear that the Legislature has made the policy decision that certain errors which have not been corrected within the timeframes prescribed in s. 32, 33, and 40 of the Act can be corrected outside these time frames.

Meaning of Finality

32‘Finality’ is a reference to the finality of the assessment roll. While finality is referenced in prior decisions the exact meaning of finality of the assessment roll is not described, so this requires some explanation. It also requires consideration of the overall taxation regime under the provisions of the Act, the Municipal Act, 2001, S.O. 2001, c. 25 (“Municipal Act”) and the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A (“COTA”) (the Municipal Act and COTA referred to collectively as “Municipal Legislation”).

33Section 36 of the Act requires that MPAC prepare the assessment roll on an annual basis. MPAC must provide a final version of the assessment roll to the clerk of the municipality in the calendar year preceding the taxation year. This is called “return” of the roll. MPAC may return the roll anytime between January 1 and the second Tuesday in December: see s. 36(1) and (2) of the Act. During this calendar year, s. 32(1) of the Act allows MPAC to make revisions at any time prior to the time fixed for the return of the assessment roll. So, in effect, the assessment roll is “locked down” as of the second Tuesday of December. Section 41 reinforces this observation, as it provides that the assessment roll is to be final “notwithstanding errors in it”. This ‘finality’ has been judicially recognized (see Williams v. Regimbal, 1935 CanLII 91 (ON CA), 1935 CarswellOnt 13, [1935] 2 D.L.R. 283, [1935] O.R. 199 (Ont. C.A.)).

34The question arises: why the need for such finality? The answer is found, in large part, in Municipal Legislation, which statutorily requires that a municipality must prepare an annual budget. This, of course, requires that the municipality consider its revenues from municipal taxation. The quantum of a property owner’s municipal taxes are calculated based on the value of the property (as assessed by MPAC) multiplied by a tax rate set by the municipality. For this reason, a municipality requires a final assessment roll to prepare its annual budget. This is the annual assessment roll returned by MPAC, notwithstanding that errors and omissions in the annual assessment roll may subsequently be corrected.

Correction of errors as an exception to finality

35Notwithstanding the requirement for finality, the Act provides for correction of errors. Section 32(1.1) (correction of errors), s. 33 (omitted lands), s. 34 (supplementary assessments), s. 39.1 (reconsideration of assessment), s. 40 (appeals to the Board), and s. 40.1 (correction of palpable errors), all allow for changes to the assessment roll to make corrections. The important corollary of this observation is that s. 40.1 does not disturb the finality of the assessment roll more so than any other of the above referenced sections. When considered in this context, the Board does not accept that s. 40.1 can be interpreted as being an exceptional remedy to be employed only if it would be unreasonable, unfair, and highly prejudicial to enforce statutory time frames prescribed in other sections of the Act, s. 40 in particular. In reaching this conclusion, the Board further observes that there is nothing in the plain wording of s. 40.1 to suggest that the Board must consider the enforcement of these statutory timelines. As previously noted, in enacting s. 40.1 the Legislature was clearly aware of these statutory timelines. Had the Legislature intended that enforcement of these timelines should be considered, this could have been included as a statutory requirement. However, the Legislature has chosen not to do so.

Enforcement of s. 40 limitation periods versus prejudice caused by delay in correcting a palpable error

36In addition to the above statutory interpretation, the Board has also adopted the purposive analysis of this section.

37The Board begins by observing that if the Board finds that an error is not a palpable error, then the fact that an appeal was not filed is irrelevant. Conversely, if the Board finds that an error is a palpable error, it can be assumed that the error would have been corrected had a party filed a s. 40 appeal. Consequently, assuming the Board exercises its discretion to correct the palpable error, the error would be corrected irrespective of the procedural mechanism used to correct it. In other words, whether by s. 40 or s. 40.1, the error would be corrected.

38When viewed in this context, the only operative difference between proceeding by a s. 40 appeal versus a s. 40.1 application with respect to a palpable error is the temporal delay in correcting the error. In other words, the issue is not whether the parties failed to file an appeal on time, the issue is whether the consequent delay in applying to correct a palpable error creates prejudice to one or more of the parties. From a purposive perspective, this explains why the Legislature has provided that the Board may exercise its discretion deciding whether to correct a palpable error.

39In support of the above conclusion, the Board relies on Kensington – Div. Ct., where the Divisional Court found that relevant jurisprudence has recognized the need to balance questions of timing and fairness with the need for correction and the integrity of the assessment roll, further indicating that timing and finality must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the legislation: see paragraph 18. Although the Court did not adopt a purposive analysis, it held that in achieving this balance the Board must consider prejudice to the parties resulting from the delay in correcting the error.

Is s. 40.1 an extraordinary remedy to be used only sparingly?

40In Scott, at paragraph 35, the Hearing Member found that the correction of a palpable error is an extraordinary remedy to be applied sparingly and only in the clearest of circumstances. The Hearing Member did not provide any analysis to support this conclusory finding. This observation is reinforced by the finding in a later Board decision (Chew), which was subsequently summarized in Piggott – Review at paragraph 31, where the Reviewer stated that the “discretion to grant a palpable error motion should only be exercised when it is clear that it would be unreasonable, unfair and highly prejudicial to enforce the statutory filing deadlines in light of the palpable error.”

41As the Board has already found that the enforcement of limitation periods is not a determinative consideration, it follows that there is no basis for characterizing s. 40.1 as an extraordinary remedy to be applied sparingly and only in the clearest of circumstances.

Summary

42Considering the need to balance the objectives of correctness in the assessment roll, timing, and finality, the Board concludes that s. 40.1 is a remedial section that provides discretion to the Board to correct errors in the assessment roll, which, for whatever reason, have not been corrected under other sections of the Act, but only if the error is “palpable”.

Scope of the term “error”

“Error” is a factual error

43An “error” is a matter of fact, and like any other fact, can be proved based on circumstantial evidence: see Brockville – Div. Ct., at paragraph 16.

44In further support of this finding, the Board observes that a party may disagree with MPAC's opinion as to current value, but that does not establish that there is an error. It only indicates a disagreement. This view is reinforced by s. 40.1(b) “if alteration of assessed values or classification of land is involved”. There has to be a factual error respecting a property which indicates that the opinion as to current value or classification may require alteration. This is why s. 40.1(b) requires that there be an appeal, so an enquiry can be made as to what the alteration should be.

Does an “error” include an omission?

45As the Act refers to both errors and omissions (s. 32 and s. 33 of the Act), the question arises whether “error” as this term is used in s. 40.1 includes an omission. In Norjohn, the Board confirmed that it does. In Chew, the Hearing Member cited Norjohn indicating that the Divisional Court denied a request for leave to appeal the decision in Norjohn. Therefore, the Board relies on the Divisional Court decision in accepting that the term “error” can include an omission.

Must an error be inadvertent and unintentional?

46The Board begins its analysis with the first in a line of Board decisions respecting s. 40.1. In Marcoccia, MPAC corrected an omission from the assessment roll pursuant to s. 33 of the Act, but in doing so made an error in reporting the effective date of the correction. MPAC then applied under s. 40.1 to correct this error. At paragraph 23 of this decision, the Hearing Members found that the Board’s jurisdiction under s. 40.1 is limited to determining whether an error is palpable, not to determine the reasons for the error, further stating that “[w]hy MPAC made the error is irrelevant for the purposes of section 40.1 of the Act.”

47In a subsequent decision, Chew, the Hearing Member stated that “[t]here is a line of cases, including a Superior Court decision, that suggest that the how and why a purported error comes about may be very relevant”: see paragraph 18. The Hearing Member relied on Sarnia, in which the Hearing Member referenced the Superior Court’s reasoning in East of Bay – S.C. that “the distinction between an inadvertent or unintentional wrong and a deliberate judgment to be wrong goes to the very heart of whether the wrong can be characterized as a manifest error, an omission or a palpable error” and found that “an intentional judgment to return the roll incorrectly is more in the nature of a falsehood, than it is a true error” (see Sarnia at paragraph 31). For this reason, the Hearing Member in Chew found that “…the enquiry into palpable error required consideration first of whether it is a true inadvertent and unintentional error, and second whether that error is palpable”: see paragraph 19.

48Given the influence of East of Bay – S.C. on the Board’s decision in Chew, some discussion of that case is warranted. In East of Bay – S.C., MPAC had corrected an omission from the assessment roll pursuant to s. 33 of the Act by intentionally reporting an incorrect “place holder” value current value, with the intent to issue a second s. 33 correction to provide the correct value. The owner challenged the second s. 33 correction by way of an application to the Superior Court.

49The Court granted the owner’s application, finding at paragraph 19:

Section 33(1) provides MPAC with the ability to “rectify” or correct an assessment notice if “land liable to assessment has been in whole or in part omitted from the tax roll...” The use of the words “rectify the omission” rather than simply “include the omission” suggests that the concern is with correcting or making right an omission that was inadvertently excluded through oversight or negligence. Here neither situation applies. MPAC’s decision not to include the completed building in the original assessment was intentional not inadvertent. In my view, there is nothing to rectify and correct. [Emphasis added.]

50At the time of this decision, the wording of s. 33 used the phrase “rectify the omission” whereas the current version of s. 33 now uses the wording “correct the omission”. For the purposes of this Review Decision, nothing appears to turn on this point.

51The Hearing Member’s finding in Chew that the error must be “a true inadvertent and unintentional error” is based on the language in East of Bay – S.C. However, the Hearing Member appears not to have been aware that leave to appeal was sought and granted by the Divisional Court in East of Bay – Div. Ct., as he makes no reference to it in Chew.

52In East of Bay – Div. Ct., the Divisional Court found that that MPAC could not issue the second s. 33 correction because there was no longer an omission on the assessment roll to correct. For this reason, the Divisional Court found that it was unnecessary to address the broader issue of whether deliberate omissions are captured under s. 33 of the Act. At paragraphs 5 and 6, the Divisional Court stated:

In our view, it is not necessary to address the broader issue of whether deliberate omissions are captured under s. 33(1) on the particular facts of this case. Simply put, no land “liable to assessment … in whole or in part”, has been omitted in the 293 separate Notices of Assessment sent out on or about October 31, 2006.

Those Notices did not properly assess the current value of the individual apartment units. However, those Notices did identify every part of the land “liable to assessment”. Separate roll numbers were assigned to each dwelling unit in the building, rather than continuing the prior assessment roll number and legal description for the entirety of the land.

[Emphasis added.]

Although leave to appeal was granted, no appeal decision was subsequently issued. This suggests the matter resolved before a hearing.

53The decision of the Divisional Court confirms that it was unnecessary for the Superior Court Justice to address the issue whether s. 33 of the Act is restricted to an omission that is unintentional. As such, the finding of the Superior Court Justice is obiter dicta. In other words, it remained an open question whether a s. 33 omission must be unintentional.

54Consequently, the Board observes that the decisions in Sarnia and Chew rejected the finding in Marcoccia based on an incorrect assumption that the Superior Court in East of Bay – S.C. had made a binding determination that a s. 33 omission must be unintentional.

55The Board also notes that the decisions in Sarnia, Chew, Bleau, Peel, and the decision under review in this Review Proceeding were all issued after the release of East of Bay – Div. Ct., but none of them refer to this decision.

56Furthermore, the Board notes that, subsequent to East of Bay – Div. Ct., the Superior Court has addressed the question of whether deliberate omissions are captured under s. 33(1) of the Act. In Bona – S.C., MPAC issued a s. 33 omitted assessment to increase the assessed value of a property to include the value of a hotel. However, unlike the circumstances in East of Bay, MPAC had not issued a prior s. 33 assessment where it included a “placeholder” value for the hotel. The property owner filed an application with the Superior Court for a declaration that MPAC's s. 33 notice is invalid and of no force and effect, citing East of Bay – S.C. At paragraph 31, the Court held:

31The conclusions of the court in East of Bay are specific to the facts of that case. I do not accept that East of Bay does or intends to impose an obligation upon MPAC to explain how or why a property was omitted from the tax rolls.

In Bona - S.C., the Court did not refer to East of Bay – Div. Ct. The Board also observes that the Decision which is under review was issued after Bona – S.C., but the Hearing Member did not consider Bona - S.C. in his analysis.

57In light of the above analysis, the Board concludes that, based on the Superior Court decisions, the question of whether a s. 33 omission must be unintentional remains unsettled. Furthermore, as the above cited Board decisions issued after Marcoccia failed to recognize this, the Board does not rely on these decisions. The Board also observes that there is divided opinion in prior Board decisions whether a palpable error under s. 40.1 must be an unintentional error.

58Accordingly, the Board concludes that a question remains whether s. 40.1 requires that an error be “unintentional and inadvertent”. In addressing this question, the Board first observes that there is no probative distinction between the meaning of “unintentional” and “inadvertent”. An action which is unintentional is inadvertent. Therefore, the requirement that an error be both unintentional and inadvertent is, at best, unclear. More importantly, there is nothing in the plain wording of s. 40.1 to even remotely suggest that “error” includes consideration of the reason why the error was made.

59Furthermore, the Board emphasizes that this requirement, as enunciated in Chew, makes no reference to whose intention is required. Presumably it is MPAC as it is MPAC that prepares the assessment roll. However, MPAC’s intention is not necessarily relevant to the other parties’ interest in correcting the error. For example, if only unintentional errors could be corrected and MPAC intentionally overstated the value of a property, then the owner would have no recourse to have the error corrected. This would be an unfair result.

60In addition, the Board questions why a finding that is based on the rather unique wording of s. 33, should dictate how the scope of the term “error” under s. 40.1 should be interpreted. Clearly, the errors to be addressed under s. 40.1 include a much broader range of errors than the narrow circumstance addressed in the East of Bay case.

61Based on the above analysis and findings, the Board finds that an error does not have to be unintentional or inadvertent in order to qualify as “error” within the meaning of s. 40.1. The Board’s jurisdiction is limited to determining whether there is an error, and, if so, whether it is palpable. The Board is not required to determine the reasons for the error. Consequently, the reason why MPAC made the error is irrelevant for the purposes of s. 40.1 of the Act.

Scope of the term “palpable”

General Definition

62A palpable error is a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand (see Brockville – Div. Ct. at paragraph 14, quoting Scott at paragraph 34; and at paragraph 16).

Must the error be on the face of the assessment roll in order to qualify as a palpable error?

63Under s. 40.1, an “error in the assessment roll”, may not be apparent from the factual information presented in the assessment roll.

64In Brockville – Div. Ct., the Divisional Court addressed this question, stating at paragraph 14:

. . .In addition, upon a reading of the reasons of the Member as a whole, it appears that he would readily have characterized a valuation error occasioned by MPAC treating a 12-foot building as if it was a 923-foot building as a palpable error. Frankly, I do not understand how it could be otherwise. Once it is accepted that an error need not be on the face of the roll to be palpable, then an error of this magnitude resulting from a simple, straightforward and significant data-entry error falls within the ordinary meaning of the word palpable which has been adopted by the Board in other cases: “an error of conspicuous magnitude; plain, evident, obvious, and easy to understand.” [Emphasis added.]

65In Hopper – Review, at paragraph 14, the Reviewer found that the Board may “consider evidence behind the face of the roll, as to do otherwise would ignore evidence that indicates whether or not the errors are palpable.”

66In Wellington, at paragraph 30, the Hearing Member stated that: “Palpable errors are those that are plain and obvious on a cursory review of the properties.” However, the Hearing Member provided no analysis in support of this conclusion.

67In addressing this point, the Board observes that the purpose of reviewing evidence is to determine whether there is a factual error in the assessment roll. Determining whether there is an error is the first step. This is a separate and distinct function from the second step where, if there is an error, the Board must determine whether the identified error is palpable. While the definition of “palpable” is that the error is plain, evident, obvious, and easy to understand, this does not mean that the investigation to identify whether there is an error must be cursory. As the primary purpose of s. 40.1 is the correction of errors, this requires that the parties complete whatever review and investigation which is necessary to determine whether an error exists. The fact that the investigation may be described as a complex review is not relevant to a finding of whether the identified error is palpable.

68The decision in Wellington is a case in point. The alleged error was that four properties used for sand and gravel extraction were misclassified. The Hearing Member reviewed detailed evidence respecting the use of each property - much more than a “cursory review” - and made a finding that there were errors. The Hearing Member then made a separate determination that the errors were palpable.

69Accordingly, the Board finds that the nature of the investigation and review to identify an error in the assessment is not a relevant consideration in determining whether the error is palpable. The error, once identified, must be judged on its face as to whether it can be characterized as being plain, evident, obvious, and easy to understand.

Standard of Proof

70In Brockville – Div. Ct., the Court addressed the Hearing Member’s finding in Brockville that the standard of proof to establish a palpable error is that there must be “clear and cogent evidence”. The Court did not accept this standard stating at paragraph 18:

18I note as well, as I stated above, that the Member said that at a minimum, there must be “clear and cogent evidence” of a palpable error before an extension of time can be granted. Since he was of the view that there was an absence of evidence of a palpable error, he never turned his mind to the sufficiency of the evidence. Nevertheless it is worth noting that a requirement of clear and cogent evidence appears to be a novel formulation of the standard of proof on a motion for an extension of time, intended by the Member to narrow the availability of an extension of time. Before me the parties agreed that the onus of proof on the applicant was the civil standard: proof on a balance of probabilities. [Emphasis added.]

71The Board observes that, in Brockville, the underlying rationale for the Hearing Member’s stated requirement that there must “clear and cogent evidence” of a palpable error, is that s. 40.1 should not be interpreted in a manner which would permit a person to by-pass the s. 40 appeal regime, thereby undermining the balance of the Act. Clearly the Divisional Court did not accept this requirement. The Board also observes that it has already rejected the above-stated rationale for this requirement. For these reasons, the Board adopts the above finding in Brockville – Div. Ct. that the standard of proof is on a balance of probabilities.

Can a palpable error be a valuation issue which can be addressed in a s. 40 appeal?

72In Scott at paragraph 41, the Hearing Member held that factual errors in lot and building size were not palpable errors, finding instead that they were valuation issues to be dealt with by appeals to the Board. This characterization was subsequently echoed in Chew, where the Hearing Member stated at paragraph 21 that: “Property owners are expected to monitor their annual assessments for anything they disagree with and those disagreements or differences of opinion are not in the same category with the kind of factual errors, which are not subject to serious debate, that s. 40.1 was created to deal with.”

73Subsequent to Chew, in Brockville, the Hearing Member disagreed with the finding in Scott, stating at paragraph 14:

14While I agree with MPAC that s. 40.1 should be narrowly construed, I do not agree that it should not be exercised when the error in question is a valuation error. The legislature specifically contemplated valuation errors when it outlined different remedies depending on if the error impacts “assessed values or classification of land,” as those will primarily be valuation issues. A proper narrowing of the broad discretion in s. 40.1 is to require clear evidence and carefully consider the prejudice of any error correction.

74The decision in Brockville was appealed. In the leave to appeal decision in Brockville – Div. Ct., the Court did not question the Hearing Member’s finding, stating at paragraph 14:

14I have noted that the Member accepted that a valuation error can be a palpable error within the meaning of s. 40.1 of the Act. . . .

Although leave to appeal was granted, it appears that the parties did not proceed with the appeal, as no Divisional Court appeal decision was issued.

75Consequently, the Board accepts that a valuation error can be a palpable error within the meaning of s. 40.1 of the Act. However, the Board re-iterates that the error must be a factual error.

Must a palpable error mischaracterize the fundamental nature or legal character of the property?

76Hopper – Review was a review of a Board decision where there were errors similar to those in Scott and Brockville. More specifically, MPAC over-estimated the lot size and square footage of the basement by assigning the square footage for the entire house to the basement alone. The Hearing Member found that there was a palpable error. MPAC requested a review of this decision, and the Review Member overturned the finding that the error was a palpable error. In support of this conclusion, the Review Member stated at paragraph 13 that “[t]he Board consistently held that the relief in s. 40.1 is an extraordinary remedy to be used sparingly, or the balance of the Act will be undermined.” At paragraph 15, the Review Member stated:

15As can be seen from the Board’s decisions on this issue, a palpable [error] must be an error that mischaracterizes the fundamental nature or legal character of the property. An error that is simply an error in judgment can – and should – be properly addressed through an appeal to the Board.

The Board observes that the Review Member’s definition of palpable error was premised on the view that palpable errors do not include what the Board describes as valuation issues as opposed to errors regarding the “legal character of the property”. This is expressly identified at paragraph 18, where the Review Member stated:

18The error in this case was an over-inclusive assumption about the square footage of the basement. While the error did reflect an unlikely assumption, i.e. that the square footage of the basement of a two-storey house would equal that of the rest of the house, this is precisely the type of error that should properly be dealt with by an appeal. It is not an error that mischaracterizes the very nature in legal character of the property in question in the property roll. [Emphasis added.]

77In support of his finding, the Review Member cited both Scott and Brockville at paragraph 13. However, as noted above, the Hearing Member in Brockville rejected the finding in Scott that a palpable error could not include valuation issues. In addition, Hopper - Review was issued before the decision of the Divisional Court in Brockville – Div. Ct. Therefore, the Review Member did not have the benefit of the Divisional Court’s acceptance of the finding in Brockville that a valuation error can be a palpable error. Furthermore, Hopper - Review was issued after Kensington – Div. Ct., in which the Court enunciated the test for the exercise of discretion under s. 40.1 - namely, that the Board must balance the questions of time and fairness with the need for correction and the integrity of the assessment roll. Yet, the Review Member in Hopper – Review made no reference to Kensington – Div. Ct.

78For the above reasons, in this Review proceeding, the Board does not rely on the definition that a palpable must be an error that “mischaracterizes the fundamental nature or legal character of the property”. In reaching this conclusion, the Board further observes that it is unclear what the scope of the term “fundamental nature” of a property would be. The Board also observes that this additional definition of palpable error is unnecessary. As described above, the long-standing accepted definition for a palpable error is “a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand.” The Board finds that this definition is both comprehensive and consistent with the purpose of s. 40.1 as described above. Consequently, this definition does not require further elaboration.

Can a palpable error include an “error in judgement’?

79In the Decision under review, the Hearing Member cites the Board decision in Kinglip, which, in turn, relies on the Board decision in Jolis as authority for the proposition that a palpable error "is not caused by an ‘error in judgment’, which can only be rectified by an appeal to the Board”: Kinglip, at paragraph 15. For the following reasons, the Board does not accept this proposition.

80First, the Board observes that this proposition is, again, predicated on the view that enforcement of the limitation periods in other sections of the Act is a relevant consideration when interpreting s. 40.1. The Board has already rejected this premise.

81Second, the Board observes that neither Hearing Member in Jolis or Kinglip provided any analysis to support their conclusion that a palpable error excludes an ‘error in judgement’. In Jolis, the Hearing Member simply stated “[t]his is not a scenario where one party alleges an error in judgment on the part of another party, which by definition could not constitute a palpable error” (emphasis added). Kinglip simply cites Jolis. Consequently, these are conclusory findings that are not supported by any analysis.

82The Board also observes that both Kinglip and Jolis were decided before Brockville – Div. Ct., so these decisions did not consider the specific findings of the Divisional Court regarding the scope of what constitutes a palpable error. The Board further observes that, in the Decision under review, the Hearing Member failed to make reference to Brockville – Div. Ct.

83In further support of the conclusion that the Board need not consider whether the error at issue is an “error in judgment”, the Board observes that the Hearing Member in the Decision under review cited Wellington (albeit respecting a different issue), without noting that in Wellington at paragraph 31, the Hearing Member expressly rejected that an ‘error in judgement’ is a valid consideration. The Hearing Member stated:

31The Taxpayers argue that these are errors in judgment, and that an error in judgment cannot be a palpable error, relying on decisions such as Kinglip Holdings Inc. v Municipal Property Assessment Corp., Region No 9, [2015] O.A.R.B.D. No 42. I do not find that distinction helpful. There is nothing in section 40.1 that makes that distinction, and it is “a distinction that may be difficult to make,” Burnac at paragraph 36. I do not find that “error in judgment” is a valid consideration in a motion pursuant to section 40.1.

84Based on the above analysis, the Board finds that an ‘error in judgement’, however this term may be defined, is not a relevant consideration when determining whether an error in the assessment roll is palpable.

Can a palpable error be a disputed error?

85In Chew, at paragraph 21, the Hearing Member found that ‘… anything that is subject to disagreement and requires evidence to prove it, cannot be said to be plain and obvious.” In other words, where there is a dispute regarding whether information about a property is incorrect, this would automatically disqualify the information as a palpable error. The Board observes that this statement was made in the context of the Hearing Member’s statement that “[a]ny alleged ‘errors’ in classification or assessment are properly contested and challenged through the s. 40 appeal process since they are the resultant product of an assessor’s subjective opinion or judgment.”

86In addressing this finding, the Board observes that there is nothing in the wording of s. 40.1 to suggest that the Legislature intended that this section would not apply in circumstances where there is a dispute regarding whether an error exists. Furthermore, this view is clearly not supported by the Court’s finding in Brockville – Div. Ct. where there was a dispute as to whether there was a palpable error. The Court’s findings regarding the standard of proof clearly confirm that one of the Board’s functions in making a determination under s. 40.1 is to make evidentiary findings when there are disputes as to whether an error exists, or whether an error qualifies as a palpable error. The Board decision in Wellington is an example where the Board adjudicated such disputes, ultimately finding that there were palpable errors.

87Based on the above analysis, the Board rejects the conclusion in Chew. Simply stated, the Board may find that there is a palpable error even though one or more of the parties may argue that there is no palpable error.

Scope of a s. 40.1(b) appeal

88Section 40.1(b) addresses the circumstance where it appears that the correction of a palpable error could result in a change of current value or classification. Determining what this change should be would typically require further appraisal of the property to arrive at an altered opinion of current value or classification. The parties may disagree on what the alteration should be. This explains why the Legislature created a specific and separate requirement that the process for correcting palpable errors involving alteration of current value or classification should be an appeal process.

89Under s. 40.1(b), the sole purpose of the appeal process is to determine whether correcting a palpable error requires an alteration to the subject property’s current value or classification, and if so, what that alteration should be. Therefore, it is clear that the Legislature did not intend that the parties may raise other appeal grounds or issues. The Board’s authority to limit the issues that can be raised in an appeal filed pursuant to an order made s. 40.1(b) has been confirmed by the Divisional Court in Municipal Property Assessment Corporation v. Montevallo Developments Limited, 2008 CanLII 69580 (ON SCDC) (“Montevallo – Div. Ct.”), at paragraphs 31 and 36.

90In summary, based on the above analysis the Board finds that the only issues that may be addressed in an appeal proceeding directed by the Board under s. 40.1(b) is the alteration of a property’s current value or classification that may be required to correct a palpable error.

Should s. 40.1(b) be characterized as a request to file a late appeal?

91In some of the cited decisions, s. 40.1 (b) has been described as an application for permission to file a late s. 40 appeal. For the following reasons, the Board finds this description to be inaccurate and, therefore, misleading.

92The Board observes that, in a s. 40 appeal proceeding, pursuant to s. 44(1) of the Act, the Board “may reopen the whole question of the assessment so that omission from, or errors in the assessment roll may be corrected, …”. Furthermore, as previously noted, in a s. 40 appeal proceeding, the Board can consider a disagreement regarding an opinion as to current value or classification where there has been no error in the factual information about the property. Provided that it is filed on time, a person may file an appeal ‘as of right’ and may raise any of the enumerated grounds under s. 40(1). The appellant is not required to first establish that there is an error in the subject property’s information on the assessment roll, nor that the error is palpable.

93The Board further observes that Rule 26 of the Board’s Rules of Practice of Procedure allows for a ‘late appeal proceeding’. This Rule provides that the Board can approve a person’s request to file a late s. 40 appeal, where a notice of assessment was not received.

94Finally, the Board notes that s. 40.1(b) does not make reference to a “late appeal”. The wording of s. 40.1(b) states that the Board “may extend the time for bringing appeals”. First, while it may be a fine distinction, ‘extending the time for bringing an appeal’ is not synonymous with ‘allowing late filing of an appeal by a person who has missed the applicable s. 40 limitation period’. As stated above, an appeal permitted by s. 40.1 is restricted to any alteration required to correct a palpable error, whereas late filing of a s. 40 appeal does not restrict the grounds or issues that the appellant may raise in the appeal proceeding. Second, the Board also observes that s. 40.1(b) does not make reference to a “late appeal”. As discussed earlier, the purpose of s. 40.1 is to correct an error that was not corrected under other provisions of the Act. The reason why the error was not corrected, (one such reason being the failure to file an appeal) is not a relevant consideration in determining whether there is a palpable error. Therefore, had the Legislature intended to characterize s. 40.1 as “late appeal process”, this section would have said so, using language such as ‘the Board may permit late filing of an appeal”.

95For these reasons, the Board finds that the exercise of discretion in s. 40.1(b) to extend the filing of an appeal should not be characterized as an order permitting late filing of an appeal.

Exercise of Discretion under s. 40.1

Introduction - Restrictive Approach versus Balanced Approach

96Under both s. 40.1 (a) and (b), this section provides that the Board may correct the error. Therefore, once the Board has determined that there appears to be a palpable error, the Board has jurisdiction to exercise its discretion as to whether or not to correct the error. This raises the question of how the Board should exercise this discretion.

97As noted above, previous Board decisions have found that the enforcement of time frames in other sections of the Act is a paramount and decisive consideration when adjudicating an application under s. 40.1 of the Act. This has led to a conclusion that s. 40.1 is an extraordinary remedy to be used only sparingly, which is, effectively, a constraint on the exercise of the Board’s discretion to correct an error. As discussed earlier in this Review Decision, this approach was first articulated in Scott and Chew. Subsequently, in Piggott - Review, the Reviewer stated that the Board’s discretion to grant a palpable error motion should only be exercised when it would be unreasonable, unfair and highly prejudicial to enforce the statutory filing deadlines in light of the palpable error. For ease of reference, the Board describes this as the “Restrictive Approach” to the exercise of discretion under s. 40.1.

98The Restrictive Approach is not consistent with the approach articulated by the Divisional Court in Kensington – Div. Ct, nor is it consistent with the wording of s. 40.1 which does not impose any limits on the exercise of discretion. The Board reiterates this test: the need to balance questions of timing and fairness with the need for correction and the integrity of the assessment roll; timing and finality must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the legislation. For ease of reference, the Board describes this as the “Balanced Approach” to the exercise of discretion under s. 40.1.

Analysis of which Approach should be applied

99Based on the following analysis, the Board finds that the correct test to be applied is the test enunciated by the Divisional Court in Kensington – Div. Ct.

Restrictive Approach not consistent with the purpose of s. 40.1

100In its analysis of the purpose of s. 40.1 above, the Board has already found that enforcement of the s. 40 limitation periods, in and of itself, is not a determinative consideration. The Board has also rejected that s. 40.1 is an extraordinary remedy to be used only sparingly. Consequently, the Board’s discretion is not restricted to circumstances where it would be unreasonable, unfair and highly prejudicial to enforce the statutory filing deadlines in light of the palpable error.

101Clearly, such restriction does not serve to achieve a balanced approach under the legislation. Furthermore, it is so restrictive that it borders on being characterized as a rebuttable presumption that the Board should not exercise its discretion to correct a palpable error. As such, it constitutes an undue fettering of the discretion granted under s. 40.1. In support of this conclusion, the Board re-iterates that there is nothing in the plain wording of s. 40.1 to suggest such a limitation on the exercise of discretion. The Board also observes that this restriction places undue emphasis and priority on finality over the objective of correctness of the assessment roll, which does not serve to achieve a balanced approach under the legislation.

Inconsistent Application of the Restrictive Approach in prior Board decisions

102As discussed in greater detail below, in previous Board decisions there appears to be some inconsistency in applying the Restrictive Approach. Most decisions appear to apply the Restrictive Approach, where the Board will not exercise its discretion to correct a palpable error unless the parties can provide a very convincing reason for not filing a s. 40 appeal. However, in Piggott, and Piggott - Review, it appears that the Balanced Approach was applied. In Piggott - Review, at paragraph 37, the Reviewer stated:

37When examining the test with respect to the exercise of the Board’s discretion, the Board agrees with the MPAC submissions that the “reasonableness” and “fairness” relates to conduct of the parties with respect to whether they acted appropriately or reasonably to correct the error. The consideration of what is reasonable and fair must always be considered in the context of the facts of the case, including the size or seriousness of the error, the actions or inactions of the assessed throughout the process of identifying the palpable error and the conduct of the other parties.

Restrictive Approach results in inconsistent results

103The Board also finds the wording of the Restrictive Approach is too broad to be a meaningful metric. It is unclear what circumstances would make it unreasonable, unfair and highly prejudicial to enforce the statutory filing deadlines. This has led to inconsistency in the exercise of discretion. For example, in Chew, the palpable error was a clerical error in the assessment roll number, resulting in Mr. and Mrs. Chew being shown on the assessment roll as the owners of a property that they did not, in fact, own. They paid municipal taxes for the 2009 to 2014 taxation years. As they had not appealed the assessments, they applied for a correction under s. 40.1. Regarding the requirement that the Chews should have been vigilant to file an appeal, the Hearing Member found at paragraph 22:

Part of the answer may be the complexity of the property tax system, with the capping and claw back regimes, musical chair roll numbers, complicated formulas and just a lot of numbers, that can be confusing to anyone. I consider it unreasonable to expect the Chews to police their assessment to the extent of catching this highly unusual scenario of being placed on someone else’s roll number, without any notice or consultation that these changes were taking place. It would be unreasonable, unfair and highly prejudicial to penalize them for not acting quickly enough in this matter. I conclude that s. 40.1 was enacted to give the Board the discretion to cure just such an inequity, where in fact the error is palpable, even though the limitation period for another available remedy has run out.

104In Janovjak, the palpable error was an error in the description of the subject property which incorrectly indicated that it had an in-ground swimming pool. The property owner who purchased the subject property in 1996 applied to correct the errors for the 1996 to 2016 taxation years. The Hearing Panel accepted that the property owner did not became aware of the palpable error until 2019, when he was advised of the error in a discussion with MPAC staff. However, the Hearing Panel still declined to exercise its discretion to correct the error, because the Hearing Panel found that the property owner did not sufficiently explain why he had not taken steps to review his assessment between 1996 and 2016, further noting that, since 2006, the property owner could have accessed MPAC's AboutMyProperty website which provided access to the property description details. At paragraph 26, the Hearing Panel applied the Restrictive Approach, citing York Condominium as authority, which, in turn, relied on prior decisions which adopted the finding in Chew.

105The Board observes that, in both cases, there clearly were palpable errors, errors that were particularly conspicuous in magnitude. In both cases, the reason given by the property owners for not filing appeals for the taxation years in question was that they were unaware of the palpable errors. The Chews would be equally responsible for monitoring their assessments as Mr. Janovjak, and they also had access to AboutMyProperty for the 2009 to 2014 taxation years in question in their case. Yet, in Chew, the Board exercised its discretion to correct the palpable error, whereas, in Janovjak, it did not. The Board can discern no relevant circumstance to explain the inconsistent exercise of discretion in these two cases.

106The same can be said when comparing the decisions in Hopper and Piggott. The Hopper – Review decision confirms that the palpable error was an error in property description where MPAC overestimated the square footage of the subject property’s basement by assigning it the same square footage (2,638 square feet) as the entire two-storey building. This is obviously an error of conspicuous magnitude. The Hearing Member exercised her discretion to correct the error for the 2004 to 2011 taxation years. However, the Review Member overturned the Hearing Member’s decision. While the Review Member characterized the issue as whether the error was palpable, the Review Member relied on the rationale in Scott which applied the Restrictive Approach. This can be contrasted with Piggott, where the subject property’s description incorrectly indicated that it had road access. The Hearing Member’s decision corrected the error for the 2006 to 2016 taxation years, and the Review Member in Piggott - Review, who was also the Review Member in Hopper – Review upheld this finding. Again, the Board can discern no relevant circumstance to explain the inconsistent exercise of discretion in these two cases.

107Clearly, the exercise of discretion using the overly generalized Restrictive Approach has resulted in an inconsistent exercise of discretion, which creates unfairness. This has occurred because the Restrictive Approach does not provide a clear metric to determine when the Board should exercise its discretion to correct a palpable error and when it should not.

Description of the Balanced Approach

The decision in Kensington – Div. Ct.

108As noted above, the Board finds that the leading Divisional Court decision on the exercise of discretion to correct an error is Kensington – Div. Ct. The circumstances of this case were unusual in that the Board, in an appeal proceeding, had made a determination that the current value of the subject property was $7,790,000 for the 2001 and 2002 taxation years but, in reporting the decision to the municipality, the Board “dropped a zero” and reported a value of $779,000. Notwithstanding this error, the municipality imposed taxes based on the correct current value of $7,790,000 for 2003 and subsequent years. It wasn’t until 2008 that the Board was asked to issue amending decisions to correct the error for the 2001 and 2002 taxation years. The net result of the amending decisions was that the property owner was required to pay $515,954.66 in additional taxes.

109The property owner requested that the Board review the amending decisions. The Reviewer in Kensington found that he did not have jurisdiction to overturn the amending decisions, and, even if he did, there was insufficient prejudice to justify the exercise of discretion to overturn the amending decisions. In this regard, he found that the impact to the taxpayer could not outweigh the need for correction.

110The Review Decision was appealed to the Divisional Court, who overturned the Review Decision. The Divisional Court, at paragraph 18, first found that the financial consequences to the taxpayer should be taken into account. In addressing the effect of prejudice and delay, the Divisional Court held at paragraph 17:

17 In our view, the Board erred in not considering the implications of a correction in the assessment; it failed to take into account the important objectives of ensuring the correctness of the assessment upon which the tax is payable while considering the relevant factors of timing, finality and possible prejudice. It failed to engage in a balancing exercise when it held that correctness of the assessment was the only consideration when it conducted the review under Rule 149. As such, the Board committed an error in law; its decision was both incorrect and unreasonable.

In making this finding, the Court relied on previous Divisional Court decisions, including Montevallo – Div. Ct. which addressed an appeal of a s.40.1 decision.

111Although the circumstances in Kensington did not frame the matter as a palpable error application under s. 40.1 of the Act, the error in question clearly qualified as a palpable error, and this decision expressly addressed the approach the Board must apply in determining whether an error on the assessment roll should be corrected. Therefore, the findings in Kensington - Div. Ct. clearly apply to the exercise of discretion in s. 40.1 of the Act.

Absence of consideration of Kensington - Div. Ct. in prior Board Decisions

112The Board notes that Kensington – Div. Ct. was issued on December 18, 2013. Chew was issued after Kensington – Div. Ct., yet made no reference to the Divisional Court’s decision.

113In fact, most of the Board decisions issued after Kensington - Div. Ct. did not refer to it: see Scott, Brockville, Hopper – Review, Grand River, Piggott – Review, York, Janovjak, and Peel, as well as the Decision under review in this Review Decision. One exception is Piggott, but in Piggott the Hearing Member only made a narrow reference to the finding that the financial consequences to the taxpayer must be considered: see paragraph 22. The other exception is Wellington in which the Hearing Member accepted that “the assessment roll has integrity when the competing interests of correctness and finality are balanced”: see paragraph 40.

114For this reason, the Board concludes that these prior cited decisions have not given due consideration to the application of the Balanced Approach as directed by the Divisional Court in Kensington Div. Ct. Consequently, the Board does not rely on the findings in these prior decisions.

Conclusion on correct Approach to be applied

115Based on the above analysis, and giving due consideration to the purpose of s. 40.1, the Board finds the Balanced Approach is the correct approach to be applied. In deciding whether to exercise the discretion to correct a palpable error, the operative consideration is not whether the parties failed to file a s. 40 appeal on time, it is whether any of the parties have been prejudiced by the delay in correcting the palpable error.

Application of the Balanced Approach

116In applying the Balanced Approach, the Board must consider all relevant factors which include the following.

Finality

117Regarding finality, the Board has earlier observed that the Legislature would have been aware that the correcting provisions in the Act will disturb the finality of the assessment roll. However, finality also more generally refers to the parties’ expectation that they can rely on the finality of the assessment process when managing their financial affairs. The same can be said for the integrity of the assessment roll where the parties can presume that the assessment roll returned by MPAC is correct. It is the prejudicial consequences for the parties, if an error in the assessment roll is, or is not corrected, which the Board must consider when deciding whether to exercise its discretion to correct a palpable error.

Timing

118Timing refers to delay between the time when the error was made and the time when a s. 40.1 application is filed with the Board. The gravamen of a lengthy delay is not the delay, in and of itself, but the prejudice such delay may cause, which can include factors such as the inability to obtain relevant evidence that has been lost or discarded over time.

Financial Consequences

119As stated in Kensington – Div. Ct., the Board must consider the financial consequences to the parties.

120Regarding financial consequences, the obligation for an owner to pay, or the municipality to receive, the correct amount of tax, in and of itself, is fair. However, if a delay in correcting an error will result in a significant quantum of accumulated arrears owing, payment of such a lump sum debt may result in significant prejudicial financial consequences for the property owner, consequences which would not have occurred had the property owner annually paid the correct amount of tax. For example, the accumulated arrears may include late payment charges, which the property owner would not have incurred if the palpable error had been corrected on a timely basis.

Conduct of the Parties

Carelessness

121Regarding conduct, a party who claims prejudice cannot rely on its own carelessness: see the decision of the Divisional Court in 217-225 Richmond Street West Ltd. v. Ontario (Assessment Review Board), 1997 CanLII 26465 (ON CTGD), [1998] O.J. No. 35, 105 O.A.C. 231, [1998] 2 C.T.C. 304), at paragraph 1 (“217-225 Richmond”). In this case a property owner did not file an appeal on time, and appealed a decision of the Board denying his request to file a late appeal because the property owner did not file its request within 30 days of first becoming aware of the assessment, as required under the Board’s Rules. The issue was whether the property owner became aware when it received its tax notice. The property owner argued that it did not become aware at that time because it did not review the notice. On appeal, the Court rejected this argument, finding that the owner could not rely on its own carelessness.

122The Board observes that, in 217-225 Richmond, the property owner’s conduct was directly related to the issue to be determined in the proceeding, i.e. when the property owner first became aware of the assessment. Hence, the careless conduct must be relevant to the issue to be adjudicated. In an application under s. 40.1, the relevant issue is whether there is a palpable error on the assessment roll. Therefore, the property owner’s conduct must be directly related to this issue, i.e. it must be conduct that causally contributed to the error being made. In this regard, the Board observes that the failure to file a s. 40 appeal does not create a palpable error, it simply results in a palpable error not being corrected.

Failure to file an appeal

123In the Decision under review, the Hearing Member cites two prior Board decisions in which he was also the Hearing Member, namely CNR, which, in turn, cites York. In York, at paragraph 23, the Hearing Member held that, where a party fails to file a s. 40 appeal due to simple inadvertence, such simple inadvertence:

… cannot be enough to justify the exercise of discretion if such discretion is only to be exercised in a sparing way and only in exceptional circumstances. It would render the time limit for filing an appeal meaningless and it would create a precedent that could be cited by anyone who had simply neglected to file their appeals within the statutory timelines. None of this could have been the legislature’s intent in enacting section 40.1 of the Act, and the Board has been clear in its decisions that this relief is to be granted only rarely and extraordinarily.

124The Board observes that if simple inadvertence is a sufficient reason to decline to correct a palpable error, then an intentional decision not to file a s. 40 would be a sufficient reason as well. Therefore, in effect, the Board would decline to correct a palpable error whenever an appeal has not been filed. Obviously, this would exclude consideration of most, if not all errors, thereby rendering s. 40.1 redundant.

125The Board also finds that this approach results in undue fettering of the Board’s discretion under s. 40.1. In this regard, the Board observes that the Hearing Member’s finding is predicated on the application of the Restrictive Approach. The Board has already found that this does not give due consideration to the application of the Balanced Approach as directed by the Divisional Court in Kensington – Div. Ct. The Board further observes that, although both CNR and York were decided after the issuance of Kensington – Div. Ct., neither decision refers to this Divisional Court decision.

126In addition, the Board finds that the Hearing Member’s statements in the Decision under Review that exercising discretion “would render the time limit for filing an appeal meaningless” and “would create a precedent that could be cited by anyone who had simply neglected to file their appeals within the statutory timelines” are conclusory statements which are not supported by analysis. In this Review Decision, the Board has already discussed that the correction of errors under s. 40.1 provides only for the correction of palpable errors, and, therefore, does not provide the parties with an opportunity to appeal on any of the grounds listed in s. 40(1) of the Act. The Hearing Member’s further statement that “none of this could have been the legislature’s intent in enacting section 40.1 of the Act” is, again, conclusory. He has provided no statutory interpretation to support this conclusion. The Board has already addressed the purpose of s. 40.1 in detail, concluding that s. 40.1 is a remedial section that provides for an alternate process to correct palpable errors in the assessment roll, which, for whatever reason, have not been corrected under other sections of the Act.

127For these reasons, the Board does not adopt the analysis in CNR and York. To be clear, the Board is rejecting the view that enforcement of s. 40 limitation periods must be a consideration when exercising discretion under s. 40.1. Where it is claimed that there has been delay in making a request to correct a palpable error, and that the delay causes prejudice to another party, the fact that a s. 40 appeal was not filed may be relevant conduct. Nevertheless, in and of itself, the failure to file an appeal is not determinative. As stated in Piggott - Review, a party’s conduct must be considered in its entirety - the Board must consider the actions or inactions of a party throughout the process of identifying the palpable error as well as the conduct of the other parties. To this, the Board adds that a party’s reasons for its actions or inactions, as well as the party’s efforts to identify and pursue correction of the palpable error, are also relevant considerations.

Parties must establish prejudice

128The Board cannot presume that prejudice will result if a palpable error is corrected. Each party must confirm if it is claiming prejudice and, if so, adduce evidence to support the claim.

Relevance of the parties’ claims of prejudice in exercising discretion to correct a palpable error.

129Absent any indication of resulting prejudice to any of the parties, the objective of correctness would require that the Board exercise its discretion to make the correction, because the primary purpose of s. 40.1 is to allow for correction of palpable errors. Consequently, if none of the parties claim that they would be prejudiced if a palpable error is corrected, and there is no evidence of systemic prejudice to the administration of the municipal taxation system, then these circumstances would favour exercising the discretion to correct the palpable error.

130Similarly, if one or more parties claim prejudice if a palpable error is not corrected, and the other parties do not claim prejudice, then these circumstances would also favour exercising the discretion to correct the palpable error, more so if all parties agree that the palpable error should be corrected.

Summary - Achieving Balance by weighing prejudice to the parties

131The above discussion demonstrates that, when exercising discretion, the Board will achieve the required balance if the Board carefully weighs any form of resulting prejudice to each of the parties, or systemic prejudice to the administration of the municipal taxation system. The exercise of such discretion is case specific. It must be considered in the context of the relevant circumstances, including both the nature of the consequences if the palpable error is, or is not corrected, and the conduct of the parties.

Summary of relevant criteria and considerations relevant to s. 40.1

132Section 40.1 is a remedial section that provides for an alternate process to correct palpable errors in the assessment roll, which, for whatever reason, have not been corrected under other sections of the Act. When determining whether to correct a palpable error pursuant to s. 40.1, the applicable criteria and considerations are as follows:

1. There must appear to be an error in the assessment roll:

(i) an error can include an omission;

(ii) an “error” is a matter of fact, and like any other fact, can be proved based on circumstantial evidence; and

(iii) there is no requirement that an error be unintentional. The Board is not required to determine the reasons for the error.

2. The error must be “palpable”:

(i) in determining whether an error is palpable error, the sole test is whether it is a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand;

(ii) when determining whether the error is palpable, the Board may consider evidence behind the face of the roll;

(iii) the standard of proof to establish a palpable error is on a balance of probabilities; and

(iv) the Board may find that there is a palpable error even though one or more of the parties may argue that there is no palpable error.

3. If there is a “palpable error”, the Board must then ask whether the error will require alteration of assessed value or classification of the subject property, as this will determine whether the Board may itself correct the roll [s. 40.1(a)], or whether the Board may extend time for bringing the appeals and direct that MPAC be the appellant [s. 40.1(b)]. Where s. 40.1(b) applies:

(i) an application under s. 40.1(b) is not a request to file a late appeal – it is an extension of time for bringing appeals;

(ii) s. 40.1(b) requires that MPAC must be the appellant in the extended appeal proceeding;

(iii) the Board has the authority to limit the scope of an extended appeal proceeding; and

(iv) the only issue which may be addressed in the extended appeal proceeding is the alteration of a property’s current value or classification that is required to correct the palpable error.

4. If there is a “palpable error”, the Board must decide if it will exercise its discretion to correct the error. In making this decision the Board must consider the following:

(i) In exercising discretion, there is no requirement that the Board should only exercise its discretion if it would be unreasonable, unfair, and highly prejudicial to enforce the statutory filing due dates under s. 39.1 or s. 40 of the Act. Section 40.1 is not an extraordinary remedy to be exercised sparingly.

(ii) Timing, finality, and fairness must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the legislation.

(iii) The Board will achieve the required balance if the Board carefully weighs any form of resulting prejudice to each of the parties, and systemic prejudice to the administration of the municipal taxation system. The exercise of such discretion is case specific. It must be considered in the context of the relevant circumstances, including both the nature of the consequences if the palpable error is, or is not corrected, and the conduct of the parties. In this regard, specific relevant considerations are:

i. the parties must adduce evidence of prejudice;

ii. regarding finality, the Legislature would have been aware that correcting an error will disturb the finality of the assessment roll. As such, finality more generally refers to the parties’ expectation that they can rely on the finality of the assessment process when managing their financial affairs. Therefore, the Board must consider the prejudicial consequences for the parties, if an error in the assessment roll is, or is not, corrected;

iii. regarding any delay in applying to correct a palpable error, the relevant consideration is not whether the parties failed to file a s. 40 appeal on time. It is whether any of the parties have been prejudiced by the delay in correcting the palpable error;

iv. The Board must consider the financial consequences to the parties.

v. The Board must also consider the conduct of the parties - a party who claims prejudice cannot rely on its own carelessness, but such conduct must causally contribute to the palpable error being made. A party’s conduct must be considered in its entirety - the Board must consider the actions or inactions of a party throughout the process of identifying the palpable error as well as the conduct of the other parties. A party’s reasons for its actions or inactions, as well as the party’s efforts to identify and pursue correction of the palpable error, are also relevant considerations.

vi. If no party claims prejudice, and there is no evidence of systemic prejudice to the administration of the municipal taxation system, then these circumstances would favour exercising the discretion to correct the palpable error, as correcting errors is the primary purpose of s. 40.1; and

vii. Similarly, if one or more parties claim they will be prejudiced if a palpable error is not corrected, and the other parties do not claim prejudice, then these circumstances would also favour exercising the discretion to correct the palpable error, more so if all parties agree that the palpable error should be corrected.

Issue 1: Did the Hearing Member make a significant error of law or fact such that the Board would likely have reached a different decision?

133As previously noted, the City’s submissions respecting errors of law raise broad fundamental questions regarding the interpretation and application of s. 40.1. In its review of s. 40.1, the Board has already provided its substantive analysis relating to the Hearing Member’s findings, which the City has submitted constitute errors in law. For this reason, the Board’s analysis in adjudicating Issue 1 can be brief.

Hearing Member’s findings that (i) a palpable error must be unintentional; and (ii) ceases to be unintentional when a party becomes aware of the error but fails to file a s. 40 appeal.

134The Board first addresses the Hearing Member’s finding that: (i) a palpable error must be unintentional and inadvertent; and (ii) that a palpable error can cease to be a palpable error when a party becomes aware of the error yet fails to file a s. 40 appeal.

135The Board has already found that s. 40.1 does not include a requirement that a palpable error must only be inadvertent and unintentional. Therefore, the Board concludes that in applying this requirement, the Hearing Member made an error of law.

136Regarding the finding that a palpable error can cease to be inadvertent and unintentional once it became known, the Hearing Member’s reason for making this finding is that, once the error became known, the error “could have been addressed through timely appeals in the normal process”: see paragraph 23. While a party’s actions in not filing an appeal may be relevant at the discretionary stage, they have no impact on whether there is a “palpable error”. Therefore, the Board concludes that, in making this finding, the Hearing Member made an error of law.

137Furthermore, the Hearing Member accepted that, in the circumstances of this case, there was palpable error, but provided no probative reason to explain how a palpable error can cease to exist when owner does not file a s. 40 appeal. The error clearly remained on the assessment roll for all taxation years in question. Therefore, the Board concludes that, in making this finding, the Hearing Member made an error of law.

Hearing Member’s finding that a palpable error must be more than an ‘error in judgement’.

138To further buttress his analysis, the Hearing Member found that a palpable error must be more than an error in judgment which would be the subject of an appeal, citing Kinglip and Jolis. The Board has already considered these decisions and found that whether or not an error is an “error in judgment” is not a relevant consideration under s. 40.1. Therefore, the Board concludes that, in applying this requirement, the Hearing Member made an error of law. Even if this definition were applied, it clearly refers to an error in judgement which results in a palpable error on the assessment roll, not an error in judgement in failing to file an appeal, which is how the Hearing Member applied it in this case. For this reason, the Board again concludes that mis-applying this definition also constitutes an error of law.

Hearing Member’s finding that an error is not palpable if a detailed investigation is required to identify the error.

139The Board now turns to the Hearing Member’s finding that the error did not meet the definition of ‘palpable’ in that the error was not plain and obvious and easily perceived because a detailed investigation was required to identify it. As discussed earlier in this Review Decision, the nature of the investigation conducted to identify whether there is a factual error in the assessment is not relevant in determining whether the error is palpable. For this reason, the Board, concludes that the Hearing Member made an error of law.

Considerations respecting the exercise of discretion

140As noted above, the Hearing Member identified that, if he had found that the error was palpable, he would not exercise his discretion to correct the error. The Board concludes that there are three grounds on which the Board finds that the Hearing Member made an error of law. The Board will address each ground in turn.

Ground 1: Application of the Restrictive Approach

141The Hearing Member applied the Restrictive Approach, more specifically, that the Board should only exercise its discretion to correct palpable errors if it would be unreasonable, unfair, and highly prejudicial to enforce the statutory filing deadlines in s. 40 of the Act. In this context, he also found that s. 40.1 is a rare and extraordinary remedy to be exercised sparingly.

142In its earlier analysis of s. 40.1, the Board has rejected the view that enforcement of s. 40 limitation periods must be a consideration when exercising discretion under s. 40.1. The Board has also found that s. 40.1 is a remedial section that provides for an alternate process to correct palpable errors in the assessment roll, which, for whatever reason, have not been corrected under other sections of the Act. As such, the Board has rejected the interpretation that s. 40.1 is a rare and extraordinary remedy to be exercised sparingly.

143Instead, the Board has found that the Balanced Approach is the correct approach to be applied. In deciding whether to exercise the discretion to correct a palpable error, the operative consideration is whether any of the parties have been prejudiced by the delay in correcting the palpable error. For this reason, the Board concludes that the Hearing Member has made an error of law in restricting his discretion to cases where it would be “unreasonable, unfair and highly prejudicial to enforce the statutory filing deadlines in light of the palpable error.

Ground 2: Failure to file a s. 40 appeal due to careless or simple inadvertence

144The Hearing Member found that, where a party fails to file a s. 40 appeal due to simple inadvertence, such simple inadvertence cannot be enough to justify the exercise of discretion if such discretion is only to be exercised in a sparing way and only in exceptional circumstances.

145The Board first notes that the finding in earlier Board decisions that an error must be unintentional and inadvertent applies to the determination as to whether there is an error, not the exercise of discretion once it has been determined that there is a palpable error. In any event, the Board has found that there is no requirement that an error be unintentional. Furthermore, the Board has found that the failure to file an appeal, in and of itself, is not a determinative consideration. A party’s conduct must be considered in its entirety - the Board must consider the actions or inactions of a party throughout the process of identifying the palpable error as well as the conduct of the other parties. For these reasons, the Board concludes that, in requiring that an error be unintentional, the Hearing Member has made an error of law.

Ground 3: Failure to consider that none of the parties claimed prejudice if the palpable error were corrected

146In reaching his conclusion that he would not exercise discretion to correct the palpable error, the Hearing Member did not consider that, as discussed in greater detail below, none of the parties claimed that they would be prejudiced if the error were corrected, and the City and the Property Owner claimed that they would be prejudiced if the error was not corrected. The Board finds that, in failing to do so, the Hearing Member has made an error of law.

Conclusion on Issue 1

147In summary, the Board has found that the Hearing Member has made several errors of law respecting both the requirements of a “palpable error” and the exercise of discretion. These errors directly influenced the Hearing Member’s decision resulting in his denial of the palpable error application. For this reason, the Board finds that they are significant errors of law such that such that the Board would likely have reached a different decision.

Issue 2: Did the Hearing Member act outside his jurisdiction or violate the rules of natural justice or procedural fairness?

148In light of the Board’s findings in its review of s. 40.1, and its specific findings respecting errors of law made by the Hearing Member, the Board finds that it is unnecessary to address the City’s submissions that the Hearing Member acted outside his jurisdiction or violated the rules of natural justice as it relates to the Hearing Member’s findings respecting s. 40.1.

149However, there remains the City’s submission that the Hearing Member breached procedural fairness by not inviting the parties to make submissions about the jurisprudence which he researched and incorporated into his Decision. More specifically, the City argues that when a decision maker intends to rely on jurisprudence that has not been submitted by the parties, the procedurally fair approach is to identify the issue, cite the authority considered, and invite submissions from the parties. The City maintains that all of these steps are required before the decision maker renders a decision. The City submits that failing to follow this procedure violates the audi alterem partem (right to be heard) principle that is a fundamental tenet of procedural fairness. The City has not provided any legal authorities in support of its submission.

150In Sara Blake, Administrative Law in Canada, 7th Ed., Chapter 12, Tribunal Procedure, the author addresses this issue stating:

In addition to the facts and evidence, the essential issues to be decided should be identified.³¹⁸ A party should not discover, upon receipt of the tribunal’s decision, that it turned on an issue on which the party had not made representations because the party was not aware it was in dispute.³¹⁹ Nor is it fair to have an important issue sprung on a party during a hearing without prior notice or an adjournment.³²⁰ This does not require explicit disclosure of applicable statutory provisions or case law, unless the decision may turn on a new issue not previously disclosed to the parties.³²¹ [Emphasis added.]

151In Macaulay, Sprague and Sossin, Practice and Procedure before Administrative Tribunals, at § 16:29 - How Much Information Need Be Given, the authors state:

Equally, there is no obligation on an agency to advise a party of new case law it becomes aware of which was not raised at the hearing,³⁰ or of the internal policy discussions it might have,³¹ provided that no new issues are raised by this case law³² or policy discussion that were not already canvassed at the hearing. The obligation is simply that a party be aware of the issues and the essence of the argument it must meet. [Emphasis added.]

In summary, therefore, the question is whether a decision raises an issue that was not addressed by the parties in the hearing.

152When deciding an issue, a decision maker is required to apply the law, which includes any relevant statutory provisions and jurisprudence. In this regard, the Board observes that a decision maker’s legal analysis of an issue that has been raised in the proceeding may not be what a party anticipated it would be. In adjudicating an issue raised by the parties, a decision maker is not restricted to choosing between the analyses advanced by opposing parties. Considering the relevant statutory provisions and jurisprudence may require that the decision maker reframe the analysis in order to correctly adjudicate an issue. However, this does not change the fact that the decision maker addressed the issue that was raised by the parties, and, consequently, no new issue has been raised. As has been stated by the legal authors cited above, before there is an obligation on the decision maker to seek additional submissions from the parties, a decision maker’s analysis must raise a new issue.

153In this case, the issues were clearly defined. Is there an error? If so, is it palpable, and, if so, should the Board exercise its discretion to correct the error? In reaching his conclusions, the Hearing Member’s analysis interpreted and applied the correct statutory provision and relevant existing jurisprudence. The fact that the analysis was not what the parties may have expected does not indicate that his analysis raised a new issue. Furthermore, the Hearing Member fairly acknowledged that he alternatively ruled on the issue of the exercise of discretion.

154For these reasons, the Board finds that the Hearing Member did not breach procedural fairness by raising a new issue.

Issue 3: If the answer to either question 1 or 2 is yes, should the Board vary the Decision or order a new hearing?

The Decision should be varied

155As the Board has found that the Hearing Member made errors of law such that the Board would likely have reached a different decision, the Board must determine whether it should it vary the Decision or order a re-hearing. As the original proceeding proceeded by way of written hearing, and the City, in its submissions for this Review proceeding, has included the evidence submitted in the written hearing, the Board finds that it is unnecessary to order a re-hearing. The Board has sufficient information to determine how the Decision should be varied.

Is there a palpable error?

156As noted earlier in this Review Decision, the parties agree that there are palpable errors on the assessment roll for the taxation years in question, and that correction of these errors will require alteration to both the current value of the Subject Property and its property classification. While the background investigation required to identify the errors was somewhat complex, the evidence adduced by the parties clearly establishes, on a balance of probabilities, that there are errors on the assessment roll.

157Regarding the question of whether the errors are palpable, the description of the errors (as summarized above, and described in detail in the City’s original written submissions), clearly indicates that these errors are factual errors of conspicuous magnitude; plain, evident, obvious, and easy to understand. To paraphrase the language adopted by the Divisional Court Justice in Brockville – Div. Ct.: Frankly, the Board does not understand how it could be otherwise. The recreation centre has been assessed twice and the dog grooming service has been incorrectly classified as a commercial business.

Should the Board exercise its discretion to correct the palpable error?

158As stated earlier in this Review Decision, when determining whether to exercise its discretion to correct an error, the Board must weigh timing, finality, and fairness with the objective of correctness of the assessment roll in order to achieve a balanced approach under the legislation. This balance will be achieved if the Board carefully weighs any form of prejudice to each of the parties, and systemic prejudice to the administration of the municipal taxation system.

159There has been significant delay in applying under s. 40.1 to correct the errors. While it was open to the Hearing Member to consider this delay, which included the fact that City had set a policy not to routinely appeal assessment roll errors, this conduct must be considered in its entirety -- the City had made efforts over the years to correct errors, on the expectation that the errors would be corrected by MPAC. Similarly, the property owner’s conduct must be considered in the context that it had contacted both the City and MPAC and relied on their representations that the error would be corrected.

160In any event, this is not a case where one party opposes correction of the error, arguing that any resulting prejudice to another party is due to their own carelessness or inaction. In this proceeding, no party has claimed prejudice due to the careless conduct of another person, nor did any party claim prejudice resulting from the delay in submitting the s. 40.1 application to the Board. As such, whether the City was careless in its decision to negotiate with MPAC to obtain a correction of the error, or mismanaged this process, thereby, creating a delay in applying to the correct the error, is not a relevant consideration in this case.

161None of the parties have claimed that they would be prejudiced if the errors are corrected.

162If the errors are not corrected, the property owner claims prejudice if the error is not corrected, as it would be subjected to double taxation, and, because the property owner has not yet paid the duplicate taxes, the property owner would also be required to pay late penalties and interest on these unpaid taxes. The City claims prejudice as it is required to remit taxes to its upper-tier municipality based on the duplicate tax revenues, even though the duplicate tax has not been paid. MPAC does not claim that it would be prejudiced if the error is not corrected.

163Regarding systemic prejudice to the administration of the municipal taxation system, the Board has considered the issue of double taxation. This is not a situation where the alteration to the current value resulting from the error would simply increase or decrease the assessed value (which in turn ensures that the property owner would pay its fair share of municipal taxes in comparison to other property owners). In this case, it is not disputed that there is double taxation because the Subject Property has, in effect, been assessed twice. Double taxation is not consistent with a fair collection of public taxes based upon an accurate assessment roll. Therefore, on this ground there is systemic prejudice if the palpable error is not corrected. Conversely, there is no evidence of systemic prejudice if the error is corrected.

164In summary, therefore, there is evidence of prejudice if the error is not corrected, and there is no evidence of prejudice if it is corrected. Moreover, none of the parties oppose the correction. These circumstances favour exercising the discretion to correct the palpable errors. Therefore, the Board concludes that it will achieve a balanced approach under the Act if the palpable errors are corrected. For these reasons, the Board exercises its discretion to correct the palpable errors.

ORDER

165The Conclusion in the Decision is rescinded and replaced with the following disposition:

1. There are palpable errors in the assessment roll for each of the 2005 to 2016 taxation years, as described in this Review Decision.

2. The Board exercises its discretion to correct the palpable errors for each of the 2005 to 2016 taxation years.

3. As the alteration of assessed values and classification is involved, the Board extends the time for bringing appeals for these taxation years subject to the following conditions:

i. The appeals must be filed within 30 days of the issuance of this Review Decision.

ii. The Board directs MPAC to be the Appellant in the appeal proceedings for these taxation years.

iii. The appeals may only address valuation and classification issues resulting from the correction of the palpable errors.

iv. As the parties have indicated that they will be filing minutes of settlement for all taxation years, Rules 61 to 65 will apply and, for purposes of Rule 61, the date of notification to the Board that the appeals have been resolved will be the date the appeals are filed with the Board.