Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
September 29, 2023
FILE NO.:
DM 2023M02
Assessed Person(s):
Hensall District Co-Operative Incorporated
Appellant(s):
Hensall District Co-Operative Incorporated
Respondent(s):
Municipal Property Assessment Corporation Region 24
Respondent(s):
Municipality of Central Huron
Property Location(s):
60 Irwin Street
Municipality(ies):
Municipality of Central Huron
Roll Number(s):
4030-260-021-02900-0000
Taxation Year(s):
2016, 2017, 2018 and 2019
Hearing Event No.:
781279
Legislative Authority:
Section 40.1 of the Assessment Act, R.S.O. 1990, c. A.31
Parties
Counsel*/Representative
Hensall District Co-Operative Incorporated
David Fleet*
Municipal Property Assessment Corporation
Ashtyn Rank and Allyson Amster*
Municipality of Central Huron
Submissions not received
REQUEST FOR:
An order extending the time for bringing appeals and directing the assessment corporation to be the Appellant pursuant to s. 40.1(b) of the Assessment Act
HEARD:
July 24, 2023 with additional submissions on August 15, 2023, in writing
ADJUDICATOR(S):
Carly Stringer, Member
MOTION DECISION
OVERVIEW
1Hensall District Co-Operative Incorporated (the “Property Owner”) is asking the Assessment Review Board (the “Board”) for an extension of time to bring assessment appeals for the 2016 to 2019 taxation years for 60 Irwin Street in the Municipality of Central Huron, Ontario (the “Subject Property”) pursuant to s. 40.1(b) of the Assessment Act R.S.O. 1990, c.A.31 (the “Act”). The Property Owner argues that there are palpable errors in the assessment roll and the Board should extend the time for bringing these appeals.
2The Municipal Property Assessment Corporation (“MPAC”) opposes the request. MPAC argues there are no palpable errors in the assessment roll, and the Board should not extend time for bringing appeals.
3The Board has not received submissions from the Municipality of Central Huron.
Result
4For the reasons that follow, the Board grants the request; extends the time for bringing appeals relating to the assessment of the Subject Property for the 2016 to 2019 taxation years; and directs MPAC to be the Appellant.
BACKGROUND
The Subject Property
5The Subject Property consists of 5.43 acres of land improved by a feed mill and grain elevator operation, which includes numerous built structures, silos for storing grain, and yardworks.
6The Property Owner purchased the Subject Property on October 26, 2015.
2020 to 2022 Appeals
7The Property Owner appealed the assessment of the Subject Property for the 2020 taxation year pursuant to s. 40 of the Act, and appeals were deemed for the 2021 and 2022 taxation years pursuant to s. 40(26) of the Act (the “2020 to 2022 Appeals”).
8On September 15, 2021, MPAC inspected the Subject Property and determined that eight (8) concrete silos had been assessed twice, and that portions of the feed mill were unusable due to rust and other contaminants. MPAC’s review discovered that the eight (8) concrete silos were added to the assessment in error at the end of 2015 for the 2016 taxation year. MPAC removed the assessed value of the eight (8) concrete silos and the unusable portions of the feed mill from the assessment for the purpose of resolving the 2020 to 2022 Appeals.
Alleged Errors
9The Property Owner subsequently brought this request in relation to the 2016 to 2019 taxation years. The Property Owner asks the Board to find palpable errors in the assessment roll for the 2016 to 2019 taxation years based on the same errors that were identified in the 2020 to 2022 Appeals, namely:
a. that a portion of the feed mill was incorrectly assessed as fully operational and usable when it was unusable during the relevant timeframe; and
b. that the Subject Property was assessed as having 27 silos rather than 19 silos; or, put another way, eight silos were valued twice.
10MPAC admits that eight silos had been valued twice since the 2016 taxation year, but says this is not a palpable error in the assessment roll. Further, MPAC says there is no evidence to show that the feed mill was unusable from 2016 to 2019, and, even if there were such evidence, this is not a palpable error in the assessment roll.
ISSUES
11The Act has a framework that permits the Board to extend statutory deadlines for bringing assessment appeals where it appears there are palpable errors in the assessment roll. The applicable statutory framework is set out in s. 40.1 of the Act:
40.1 Correction of errors. – 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 the appeals and direct the assessment corporation to be the appellant.
12The errors alleged by the Property Owner engage s. 40(b) of the Act, as they would involve alteration of assessed values. Therefore, there are two issues the Board must determine:
Does it appear that there are palpable errors in the assessment roll for the applicable taxation years?
If the answer to Issue 1 is “yes”, should the Board extend time for bringing appeals for the applicable taxation years?
ANALYSIS
Application of 0 Centre Street
13The Board recently considered s. 40.1 of the Act in 388210 Ontario Limited v Municipal Property Assessment Corporation Region 15, 2023 CanLII 64028 (“0 Centre Street”). 0 Centre Street was a Review Decision written by a Vice-Chair of the Board (“Review Member”). In it, the Board conducted detailed statutory interpretation, provided an exhaustive overview of relevant jurisprudence, and reformulated the approach to applications brought under s. 40.1 of the Act.
14Neither the Property Owner nor MPAC addressed 0 Centre Street in their materials on this motion. This may be because this hearing in writing was scheduled for July 24, 2023 and 0 Centre Street was issued only ten days earlier on July 14, 2023.
15On August 1, 2023, the Board requested additional submissions from the parties regarding the application of 0 Centre Street.
16MPAC submits that the Board should not adopt the reasoning in 0 Centre Street. MPAC submits that 0 Centre Street greatly expanded the tests for i) determining whether an error is palpable and ii) whether the Board should exercise its discretion to extend time for bringing appeals pursuant to s. 40.1 of the Act. MPAC submits that the Board is not bound by 0 Centre Street.
17The Board does not accept MPAC’s argument that it should not adopt the framework developed in 0 Centre Street, for the following reasons:
a. While 0 Centre Street is not a binding authority, the Board strives for consistency in its decision-making. Without justification – such as a good reason to distinguish it on the facts, or a reason to believe that 0 Centre Street contained an error – good practice suggests that it be followed where applicable: see Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 SCR 653 at paragraphs 129 to 132.
b. The Board finds that MPAC has not provided it with sufficient reasons to believe that 0 Centre Street was wrongly decided or can be distinguished on the facts from the Property Owner’s case. MPAC mainly pointed to the fact that the Review Member did not follow previous Board decisions on palpable errors. The Board does not accept this submission. The Board finds that the Review Member in 0 Centre Street thoroughly explained the reason for distinguishing and departing from the jurisprudence.
c. The Board finds that 0 Centre Street provides a thoughtful and thorough analysis of the relevant legislative provisions and jurisprudence that has developed pursuant to s. 40.1 of the Act. While 0 Centre Street represents a departure from previous case law both in terms of its characterization of a “palpable error” and its rejection of the “Restrictive Approach” to the exercise of discretion, having reviewed the legislation and previous cases referenced in 0 Centre Street, the Board finds the Review Member’s departure is well-reasoned, sound and relevant to the current matter. For these reasons, the Board will apply the framework developed in 0 Centre Street to this case.
Issue 1 - Does it appear that there are palpable errors in the assessment roll for the applicable taxation years?
Applicable Law
18The first step of the analysis requires that there appear to be an error in the assessment roll, and the error must be “palpable”: see 0 Centre Street at paragraph 132.
19In determining whether there appears to be an error in the assessment roll, an “error” is a “matter of fact, and like any other fact, can be proved based on circumstantial evidence”: 0 Centre Street at paragraph 132.
20The following considerations apply in determining whether an error is a palpable error:
a. “the sole test is whether it is a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand”;
b. the Board may consider evidence behind the face of the assessment roll;
c. the standard of proof to establish a palpable error is a balance of probabilities; and
d. there may be a palpable error even where parties disagree over whether there is a palpable error.
See 0 Centre Street at paragraph 132.
Submissions
21The Property Owner submits that the errors are palpable, in the sense that it is plain, obvious, and easy to understand that: i) eight extra silos were assessed, and ii) portions of the feed mill that were never operational or used were assessed as if they were in operation.
22MPAC submits that neither alleged error is a palpable error, as follows:
a. MPAC submits that the Property Owner has not established there was an error in assessing the feed mill as fully operational for the 2016 to 2019 taxation years. MPAC says there is no evidence regarding the state of the feed mill during these years. MPAC submits that even if there were such evidence, this error is not palpable because it is a valuation question that depends on the assessor’s judgment; is not of conspicuous magnitude; and does not mischaracterize the fundamental nature or legal character of the property.
b. MPAC does not dispute that it assessed 27 silos when it should have assessed 19. However, MPAC says that adding eight silos to the assessment is not a palpable error because it is not of conspicuous magnitude and does not mischaracterize the fundamental nature or legal character of the property.
Findings on Issue 1
Feed Mill
23The Board does not accept MPAC’s submission that there is no evidence of an error regarding the feed mill for the 2016 to 2019 taxation years. The Property Owner provided affidavit evidence that the feed mill manager confirmed the feed mill was never fully operational since the Property Owner purchased the Subject Property in October 2015. The Board accepts and relies on this uncontested evidence and finds an error occurred in assessing the feed mill as fully operational when portions of it could not be used.
24The Board does not accept MPAC’s other submissions that this error is not palpable for the following reasons:
a. The Board does not accept MPAC’s submission that this is a valuation question based on the assessor’s judgment, and therefore cannot constitute a palpable error. First, the Board notes that valuation errors can be palpable errors within the meaning of s. 40.1 of the Act provided they are also factual errors: see 0 Centre Street at paragraph 75; see also Brockville (City) v Municipal Property Assessment Corporation Region 02, 2015 CanLII 154806 (ON ARB) at paragraph 14 and the leave to appeal decision in Brockville (City) v Municipal Property Assessment Corporation, 2016 ONSC 5752 at paragraph 14. The Board finds the error in this case is a factual one. Second, whether an error is an “error in judgment” is not a relevant consideration. There is nothing in s. 40.1 that makes that distinction, and, in any event, there is no clear definition of what constitutes an “error in judgment”: see 0 Centre Street at paragraphs 83-84 and Wellington (County) v Municipal Property Assessment Corporation, Region 22, 2018 CanLII 32198 (ON ARB) at paragraph 31.
b. There is no requirement that it be an error that “mischaracterizes the fundamental nature or legal character of the property.” As the Board noted in 0 Centre Street, it is unclear what the scope of the term “fundamental nature” of a property would be: see 0 Centre Street at paragraph 78. Moreover, the long-standing definition of a palpable error is that it is “a factual error of conspicuous magnitude; plain, evident, obvious and easy to understand.” This is the sole test.
25Applying this sole test that the error be “a factual error of conspicuous magnitude; plain; evident, obvious and easy to understand”, and noting that the Board may consider evidence behind the face of the roll, the Board finds that MPAC’s assessment of the feed mill as fully operational, when portions of it could not be used, is a factual error that is conspicuous, plain, evident, obvious, and easy to understand.
Eight Extra Silos
26The parties agree that 27 silos were assessed on the Subject Property when there were only 19, representing assessment of eight extra silos. The Board is satisfied this is a factual error.
27The Board does not accept MPAC’s submissions that this is not an error of conspicuous magnitude and therefore not a palpable error. MPAC assessed 27 silos. There were 19. The Board finds that eight extra grain silos are of conspicuous magnitude. This is a plain and obvious factual error that is easy to understand.
28On the facts of this case, the Board finds that both alleged errors are palpable errors.
Issue 2 - Should the Board extend time for bringing appeals for the applicable taxation years?
Applicable Law
29Section 40.1(b) of the Act provides that the Board “may” extend the time for bringing appeals where it appears that there are palpable errors in the assessment roll. Accordingly, the power to extend the time for bringing appeals to correct a palpable error is ultimately discretionary.
30In O Centre Street at paragraph 132, the Review Member confirmed that in deciding whether to exercise discretion, the Board should consider the following:
a. “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.”
b. “Timing, finality, and fairness must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the legislation.”
c. “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.” The Board confirmed the following considerations:
i. evidence of prejudice;
ii. the prejudicial consequences for the parties, if an error in the assessment roll is, or is not, corrected;
iii. whether any of the parties have been prejudiced by the delay in correcting the palpable error;
iv. the financial consequences to the parties;
v. 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;
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.”
Submissions
31The Property Owner submits that the operative consideration to the exercise of discretion is prejudice. The Property Owner submits that it will be prejudiced if relief is not granted, and there is no prejudice to the Municipality or MPAC.
32MPAC submits that the Board should not exercise its discretion to extend time to bring appeals. MPAC submits that the Board should not create palpable error appeals unless it would be “unreasonable, unfair and highly prejudicial” to penalize a party for not meeting its statutory obligation to file an appeal on time. MPAC submits that the Property Owner has not entered any evidence to explain why it did not file a Request for Review or an appeal of the Subject Property’s assessment for the 2016 to 2019 taxation years. MPAC submits that the Property Owner should not be permitted to rely on its own carelessness in failing to review or avail itself of its appeal rights pursuant to s. 40 of the Act.
33Further, MPAC submits that while there may be some prejudice to the taxpayer in the form of higher property taxes, it would not be fair or reasonable for the Board to exercise discretion when there is no evidence to explain why the Property Owner failed to bring assessment appeals for the relevant taxation years.
Findings on Issue 2
34The Board carefully weighs prejudice to each party, as well as systemic prejudice to the administration of the municipal taxation system, if the error is, or is not, corrected: see 0 Centre Street at paragraph 132. Contrary to MPAC’s submission, 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 deadline, for the reasons extensively outlined in 0 Centre Street.
35The Board does not accept MPAC’s submission that the Property Owner’s “carelessness” should preclude the creation of palpable error appeals. For one thing, the Board finds that the evidence does not establish that the Property Owner was careless. The evidence shows that the Property Owner was unaware of the error until MPAC discovered it during the 2020-2022 Appeals. Second, careless conduct should causally contribute to the palpable error being made: see 0 Centre Street at paragraph 132. That is not the case here.
36In this case, there is no evidence of prejudice to the Municipality of Central Huron, nor is there evidence of prejudice to MPAC. There is no evidence before the Board regarding prejudice to the administration of the municipal taxation system. This favours exercising the discretion to correct the palpable error: see 0 Centre Street at paragraph 129.
37The Property Owner provided affidavit evidence that denial of relief in this proceeding “would significantly prejudice” it. This statement is uncontested, and the Board accepts it. These circumstances also favour exercising the discretion to correct the palpable error: see 0 Centre Street at paragraph 130.
38The Board has considered the relevant factors; accepts there is prejudice to the Property Owner; and decides that it will exercise its discretion to extend time for these appeals.
CONCLUSION
39The Board finds that there are palpable errors in the assessment roll for the 2016 to 2019 taxation years. Balancing the appropriate factors, the Board exercises its discretion to grant an extension of time to bring appeals.
ORDER
40The Board orders as follows:
a. The Board extends the time for bringing appeals of the assessments of the Subject Property for the 2016 to 2019 taxation years.
b. The Board directs that MPAC be the Appellant.
c. The appeals shall be filed within 30 days of this decision being issued.
d. The appeals may only address valuation issues resulting from the correction of the palpable errors.