Tribunals Ontario

Assessment Review Board

ISSUE DATE: December 18, 2024

FILE NO.: DM 187192

Assessed Person(s): OBEC Ltd

Appellant(s): OBEC Ltd

Respondent(s): Municipal Property Assessment Corporation Region 03

Respondent(s): City of Ottawa

Property Location(s): 1885 Carling Avenue; 1927 Carling Avenue

Municipality(ies): City of Ottawa

Roll Number(s): 0614-094-901-85300-0000; 0614-094-901-85700-0000

Appeal Number(s): 3523085, 3524625; 3523086, 3524641

Taxation Year(s): 2023 and 2024

Hearing Event No.: 785464

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

Parties	Counsel/Representative
OBEC Ltd	Jonas Perov
Municipal Property Assessment Corporation	Veronica Wellman
City of Ottawa	Shen Bai

REQUEST FOR: An Order for Disclosure

HEARD: December 5, 2024 in writing

ADJUDICATOR(S): Christopher Voutsinas, Vice-Chair

MOTION DECISION

OVERVIEW

1The City of Ottawa (the "City") is responding to appeals by OBEC Ltd (the "Appellant" or the "Property Owner") relating to 1885 Carling Avenue and 1927 Carling Avenue (together the "Subject Properties"), both being multi-residential properties located in the City of Ottawa.

2The City has brought this motion seeking disclosure of certain information from the Parties. Specifically, the City is requesting the following information (the "Disclosure Request(s)"):

From the Property Owner

• Rent rolls for the Subject Properties for the period 2018-2022
• Income and expenses document for the Subject Properties for the period 2018-2022

From the Municipal Property Assessment Corporation ("MPAC")

• Property Income and Expense Return ("PIER") information for the Subject Properties for the period 2015-2017

3The City is requesting that the Assessment Review Board (the "Board") order the Property Owner and MPAC to disclose the respective Disclosure Request(s) on the basis that the information is both relevant and proportionate to the issues in dispute.

4The Property Owner opposes the motion. MPAC supports the motion.

5The Board has received submission materials to this motion from all three Parties the City, MPAC, and the Property Owner.

Result

6For the reasons that follow, the Board grants the City's request for disclosure.

ISSUE

7There is one issues to be decided on this motion.

8Should the Board order the requested disclosure? This issue has two parts: is the information sought relevant to the issues in dispute; and if the information sought is relevant, is the disclosure proportionate to the importance and complexity of the issues in dispute with a view to resolving the appeals?

9The Board notes that MPAC supports the City's request for information, including the request that MPAC provide the PIER information for 2015–2017 related to the Subject Property, provided that the Board orders the same and orders that the City's legal counsel and expert consultants sign an Undertaking of Confidentiality and Non-Disclosure agreement regarding the information to be disclosed by MPAC (a copy of which is included in MPAC's motion materials). As such, this part of the motion is not in dispute.

ANALYSIS

Issue 1 – Should the Board order the requested disclosure - is the information sought relevant and proportionate to the issues in dispute?

Applicable Rules and Law

The Board's Rules of Practice and Procedures (the "Rules")

10Rule 4 states:

Proportionality

4. These Rules shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding and with a view to resolving appeals within the assessment cycle.

11Rule 43(a) states:

Statement of Issues and Responses

43. Statements of issues and responses must contain:

(a) If the issue is current value:

i. the current value requested and how it is calculated;

ii. a full statement of every issue that the party intends to raise, including identification of comparable property(ies) to be referred to, if any; and

iii. a list of all facts, legal grounds and documents that the party relies on in support of its position.

12Rule 45 states:

Disclosure

45. All parties must serve an electronic copy of all relevant documents in their possession, control or power to all other parties in the proceeding, except for privileged documents, or documents that cannot be disclosed by law.

13Walmart Canada Corporation and Target Canada Corporation v Municipal Property Assessment Corporation, Region 01, 2018 CanLII 67789 (ON ARB) ("Walmart") sets out the test to be applied when determining whether a document should be disclosed pursuant to Rule 45 as follows.

[17] However, under Rule 45 of the new Rules, effective April 1, 2017, parties have an obligation to provide a copy of "all relevant documents in their possession, control or power to all other parties in the proceeding, except for privileged documents." As noted in the aforementioned Board decision, "the standard is now "relevance" and not a "semblance of relevance see Champlain at p. 2.

[18] Relevance is determined in relation to whether a document is relevant to an issue in dispute. However, this is not the only criteria that the Board will consider when determining whether a document, which may be relevant, should be disclosed. Rule 45, itself, provides an exception for privileged documents. In addition, Rule 5 provides that "These Rules shall be applied in a manner proportionate to the importance and complexity of the issues in a proceeding and with a view to resolving appeals within the four year cycle'. Therefore, the requirement to disclose relevant documents must also be applied in a proportionate manner. Rule 45 does not include specific criteria to assess proportionality. However, the Board finds that the criteria in Rule 29.2.03(1) and (2) of the Rules of Civil Procedure (Ontario) are applicable, namely:

1. the time required for the party or other person to answer the question or produce the document would be unreasonable;

2. the expense associated with answering the question or producing the document would be unjustified;

3. requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;

4. requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and

5. the information or the document is readily available to the party requesting it from another source.

6. whether an order for disclosure would result in an excessive volume of documents required to be produced by the party or other person.

The Board observes that this is a non-exhaustive list. There may be other criteria identified on a case by case basis.

[19] In applying the above criteria, the Board must balance these considerations against relevancy, i.e. the degree to which it appears that the document is relevant to an issue in dispute, and, if so, how probative this evidence may be. The onus to establish that a document should be disclosed pursuant to Rule 45 rests with the party who requests the disclosure.

[20] In addition to the above, it should also be noted that Rule 45 only requires disclosure of documents in a party's possession, control, or power. A party is not required to produce new information, or obtain documents that are not within its possession, control, or power.

Submissions of the Parties

The City

14The City submits that when the Property Owner informed them that it only has property records from 2018 onward, the City requested that the Property Owner provide the rent rolls, and income and expenses document for the Subject Properties from 2018-2022.

15The City asserts that its request for rent rolls for the Subject Properties is a standard request for a multi-residential property typically valued using the income approach, as is the case here. Further, the City asserts that rent rolls provide the best evidence of income.

16The City also maintains that the Subject Properties' expenses are necessary in the income approach to valuation, and critical to ensuring the correct valuation.

17The City takes the position that its request for certain disclosure is neither onerous or unusual, and that these are important and necessary documents for appraisal and assessment purposes.

MPAC

18MPAC submits that while it (and the City) made an initial request for the Subject Properties' 2015-2017 rent rolls and income and expense information, it was advised by the Property Owner's representative via affidavit that the Property Owner no longer possessed financial data from 2015-2017 due to a policy not to maintain financial records for more than seven years. As a result, MPAC amended its disclosure request to reflect 2018-2020.

19MPAC submits that the Property Owner's representative responded to the amended request by indicating that it would not be providing the 2018-2020 rent rolls as these are not in their possession nor relevant to the 2016 current value assessment (the "CVA").

20MPAC submits that the City' request for disclosure satisfies the test as set out in Walmart. Specifically, that:

1. "... the Owner of the Subject Properties can be reasonably expected to be in possession, control, or power of the Subject Properties' rent rolls and income and expense statements.";

2. "... the rent rolls and PIER documents are directly relevant to resolving the correct current value using the income approach, which was raised by the Owner."; and

3. "... the rent rolls and PIER information are probative to the issue in proportion to the importance and complexity of the proceed[ing]. In consideration of the criteria set out in the test..." MPAC does not believe that:

a. "... there is an unreasonable amount of time required for the Owner to produce the rent rolls, as these should be documents that already exist for the requested taxation years and MPAC has not been informed otherwise."

b. "... there is any expense associated with producing the rent rolls, because the rent rolls should already exist for those requested taxation years and MPAC has not been informed otherwise."

c. "... requiring the Owner to produce the rent rolls ... would cause the Owner undue prejudice, as the documents are intended to support the Owner's position that the 2016 CVA should be reduced."

d. "... requiring the Owner to produce the rent rolls would unduly interfere with the orderly progress of the appeal proceedings"

e. "... the rent rolls are available/accessible only by the Owner and no other source."

f. "... an order for disclosure would result in an excessive volume of documents required to be produced by the Owner."

Property Owner

21The Property Owner submits that: (i) it is the requesting party's responsibility to establish relevancy, probity, and proportionality (with reference to Nunno and Municipal Property Assessment Corporation, Region 07, Re,2019 CarswellOnt 7433 (Ont Assess. Review Bd.)); (ii) the Subject Property's 2018-2022 rent rolls and income-expense statements are too far removed from the January 1, 2016 valuation date to provide probative evidence and are not relevant to determining a correct and equitable assessment as of the same date.

22Further, the Property Owner submits that it does not maintain annual income-expense statements specific to the Subject Properties and that the statements it does have reflect combined income and expenses for multiple properties owned by the Property Owner and as such, are of no probative value as it relates to the assessment of the Subject Property. It asserts that it cannot produce annual income-expense statements that are specific to the Subject Property for the 2018-2022 taxation years, as no such documents exist.

23The Property Owner maintains that as the requested rent rolls and income-expense statements are either not relevant or not in the Property Owner's power to provide, the request should be denied.

The Board's Analysis

24In its Practice Direction on How to Interpret the Schedule of Events for General Proceedings, the Board states that:

Under Rule 45, a party is required to disclose a relevant document. The term "relevant" means the document must relate to something. In an appeal proceeding, this means that it must relate to an issue that is in dispute. Those issues are identified through the parties' Statements of Issue, Response and Reply...

25The issue in dispute in this matter is the correct current value of the Subject Property as of the January 1, 2016 statutory valuation day (s. 40 appeals).

26Further, the Board's Rule 45 requires the Property Owner to provide disclosure of "all relevant documents in their possession, control or power" (emphasis added).

27Rent rolls and income-expense statements are fundamental and relevant in determining the value of income producing properties such as multi-residential properties, using the Income Approach to valuation. See The Appraisal of Real Estate, Third Canadian Edition, Chapter 21 – Income and Expense Analysis, and Chapter 20 – The Income Approach.

28Further, in its Practice Direction on Disclosure Requirements for General and Summary Proceedings the Board states: "Where there is a dispute regarding whether a document is relevant, parties are encouraged to provide the document...."

29The Municipality and MPAC initially requested rent rolls and income and expense statements for the years 2015-2017 and were advised by the Property Owner that these could not be provided as the Property Owner did not retain records beyond seven years.

30MPAC then requested the same documents for the next most relevant and available timeframe i.e., 2018–2020, and the City similarly revised its request to the timeframe 2018-2022.

31In its submissions, the Property Owner states that it then advised that it did not maintain property-specific income and expense records. Rather, this information is maintained on a combined basis for multiple owned properties.

32Given that rents rolls and income and expense statements on or about the statutory valuation date are not in the possession nor available to the Property Owner, this is equally applicable for all Parties, including the Property Owner, in establishing value.

Findings on the Issue

33The Board finds that rent rolls and income and expense data are relevant to the issue in dispute – the correct current value of the Subject Properties.

34The Board finds that given the absence of any other available rent rolls and income and expense statements, the 2018–2020 rent rolls and income and expense statements are both relevant and proportionate to the importance and complexity of the issues in dispute, specifically the correct current value of the Subject Properties.

35While income and expense records are not available on a property specific basis, the Property Owner states they are available on a combined basis for multiple owned properties.

36The Board finds that the Property Owner has not provided sufficient information for the Board to determine the format and presentation of the income and expense data that is available. As such, the Board cannot determine that the income and expense data that is available is not relevant or useful.

ORDER

37The Board orders that the Property Owner disclose the following information:

1. the 2018-2020 rent rolls for the Subject Properties.

2. the 2018-2020 income-expense statements for the Subject Properties that are available i.e., on a combined basis with other owned properties.

38Further, as MPAC agrees to provide the PIER information related to the Subject Properties for 2015-2017 subject to the City's legal representative(s) and expert consultant(s) executing their standard Undertaking of Confidentiality and Non-Disclosure Agreement (attached as Appendix A to MPAC's response to Motion), the Board orders MPAC to disclose the same within three business days of the City representatives executing said agreement.

39The Parties have not advised the Board on the impact of this motion on the timing of next steps applicable to these appeals pursuant to their respective Schedule of Events ("SOE"). Accordingly, the Board will make no order in relation to the SOE or scheduled hearing events. The Parties may request changes to the SOE via the Board's Expedited Board Direction Form process.