Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 12, 2024

FILE NO.: DM 185642

Assessed Person(s): 2676916 Ontario Inc; 2699380 Ontario Inc.

Appellant(s): 2676916 Ontario Inc; 2699380 Ontario Inc.

Respondent(s): Municipal Property Assessment Corporation Region No. 13 Municipal Property Assessment Corporation Region No. 21

Respondent(s): City of Oshawa; City of Cambridge

Property Location(s): 506 Ritson Road South; 490 Ritson Road South; 484 Ritson Road South; 480 Ritson Road South; 61-69 Ainslie Street South

Municipality(ies): City of Oshawa; City of Cambridge

Roll Number(s): 1813-040-009-06600-0000; 1813-040-009-06700-0000; 1813-040-009-06800-0000; 1813-040-009-06900-0000 3006-040-028-00600-0000

Appeal Number(s): 3511333; 3511334; 3511335; 3511336; 3511332

Taxation Year(s): 2023

Hearing Event No.: 781964

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

Parties

Representative

2676916 Ontario Inc; 2699380 Ontario Inc.

Ashleigh Searles

Municipal Property Assessment Corporation

Stephanie Yates

City of Ottawa

Submissions not received

City of Cambridge

Submissions not received

REQUEST FOR: Disclosure

HEARD: October 3, 2023 in writing

ADJUDICATOR(S): Dirk VanderBent, Vice-Chair

MOTION DECISION

OVERVIEW

12676916 Ontario Inc. is the owner of four properties with municipal addresses 480, 484, 490 and 506 Ritson Road South (the “Four Properties”) in the City of Oshawa, which are described as vacant commercial land. 2699380 Ontario Inc. is the owner of the property with municipal addresses 61-69 Ainslie Street South (the “Ainslie Street Property”) in the City of Cambridge, which is described as a vacant shopping centre. These two property owners have filed appeals for the 2023 taxation year, pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). For purposes of this Motion Decision, the Assessment Review Board (the “Board”) refers to each owner as the Appellant in its respective appeal proceeding.

2Although it appears that the Municipal Property Assessment Corporation (“MPAC”) has provided initial disclosure in these two appeal proceedings, the Appellants have filed a motion requesting that the Board order MPAC to provide additional initial disclosure, asserting that this disclosure is necessary for the Appellants to adequately draft their Statements of Issues. MPAC's position is that each Appellant’s request should be denied. The Municipalities have not participated in this Motion Hearing.

RESULT

3The Board denies all disclosure requests made by each Appellant, and, therefore, the Motion is dismissed. Due to the delay occasioned by this Motion Hearing in proceeding with the Appellants’ appeals, the Board assigns a new Commencement Day for each appeal proceeding.

ISSUES

4The issue is whether the Board should grant the disclosure requests advanced by both Appellants.

5While the Board has reviewed all the parties’ submissions in detail, for purposes of this Motion Decision, the Board provides a synopsis of only the most salient submissions.

ANALYSIS

The Test to be Applied

6The Board’s Rules of Practice and Procedure:

Proportionality

5. 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.

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.

7The test to be applied regarding disclosure has been set out in Walmart Canada Corporation and Target Canada Corporation v Municipal Property Assessment Corporation, Region 01, 2018 CanLII 67789 (ON ARB).

18Relevance 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.

19In 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.

20In 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.

Introduction

8For the Four Properties, the Appellant has made the same disclosure requests. For the Ainslie Street Property, the Appellant has advanced its own disclosure requests. The Board will address each appeal proceeding in turn.

Disclosure Requests for the Four Properties

Disclosure Request No. 1

A proper map defining the boundaries of the homogeneous area in which the Subject Property is located and a pointer locating each of the properties that MPAC claims to be comparable and identifying each.

9The Appellant submits that the issue is whether MPAC has failed to provide a defined specification for the term “vicinity” for the purpose of determining whether an equitable adjustment is required pursuant to s. 44(3)(b) of the Act. The Appellant asserts that MPAC has not provided a defined vicinity specification although MPAC has used this term in its Equity Analysis report. The Appellant submits that its request is relevant because the Appellant would have extended the search for similar properties if the information had been provided.

10MPAC submits that its Appeal Valuation Report sent via email on August 25, 2023, contains a vicinity map with location markers of comparable property sales. MPAC maintains that the Appellant can also utilize MPAC's AboutMyProperty website, which provides property owners the ability to access and retrieve property information within their requested parameters.

11In addressing the Appellant’s submission, the Board emphasizes that a party is required to disclose relevant information in its power, possession, or control. The term “vicinity” as it is used in s. 44(3)(b) of the Act, is not defined. The Appellant has not disputed that MPAC provided the property location information for the properties on which MPAC has relied. Consequently, the Board finds that MPAC has satisfied its obligation to disclose the documents that are relevant to the term “vicinity” as interpreted by MPAC. For this reason, the Board denies this request. In further support of this conclusion, the Board observes that the Appellant may advance its own position regarding the geographical area that constitutes “vicinity” in this particular case, can further choose the properties within this area which the Appellant asserts are similar to the Subject Property.

Disclosure Request No. 2

A list of all assessments classified as ‘property code 105: vacant commercial land’ in the homogeneous area.

12The Appellant states the issue is “A lack of disclosure relates to the preparation of the SOI [Statement of Issues] and the ability to reply fully to MPAC's Statement of Response (SOR).”

13The Appellant states that MPAC, in its property valuation, has used properties situated in several different cities, whereas the Four Properties are located in Oshawa. The Appellant maintains that it would have extended the search for similar properties if the requested disclosure had been provided. The Appellant asserts that the information on MPAC's AboutMyProperty online data system is no longer up to date. In this regard, the Appellant states that the earliest information available is for 2018, whereas the valuation day for determining current value is January 1, 2016. The Appellant argues that without access to this sales data, it becomes impossible for the Appellant to compare properties that it considers to be similar to the Four Properties.

14MPAC states that there was a sale of the Four Properties in March 2019. MPAC further asserts that it has provided an “Equity Report” containing a large sample of vacant commercial land assessments and respective sale amounts as part of its initial disclosure process. MPAC submits that the number of properties supplied is sufficient to draw a comparison for the purpose of s. 44(3)(b) of the Act.

15The Board finds that the Appellant has not identified an issue to be addressed in the hearing. MPAC is only required to provide initial disclosure to describe its assessment of the Four Properties. The Appellant is then required to state its issues and provide its evidence in support of these issues. This is a procedural requirement. It is not an issue to be determined in the appeal proceeding.

16Furthermore, it is difficult to ascertain whether the Appellant is arguing that MPAC has failed to provide information relevant to the issue of correct current value, or, instead to the issue of whether there should be an equitable adjustment pursuant to s. 44(3)(b) of the Act.

17In further support of this conclusion, the Board observes that “homogenous area” is a concept used MPAC's statistical mass appraisal of a property’s value. However, the submissions indicate that MPAC is not relying on the mass appraisal approach in this appeal proceeding. Instead, it appears that MPAC is relying on a comparable sales analysis. Therefore, the Appellant has not established how reference to the homogenous area is a relevant consideration.

18As the request, as advanced by the Appellant, is not specific, the Board cannot determine relevancy. The Appellant’s request is in respect of a class of properties, and, consequently is a general request, not a specific request. The Board finds that the Appellant has not explained whether all or any of the properties that may fall within this class would necessarily be relevant to an issue in dispute.

19Furthermore, the Appellant has not established that the requested list is a document in MPAC's possession, control, or power. In responding to a disclosure request, a party is not required to create new documents to aid other parties in the preparation of their case.

20In summary, given this lack of clarity respecting the issue in dispute, and the lack of specificity in the request, the Board denies the Appellant’s request.

Disclosure Request No. 3

A copy of all the Property Assessment Detail (“PAD”) sheets for each of the properties referenced in Disclosure Request No. 2

21The Appellant submits that MPAC, in its response materials, relies on properties located in multiple cities away from the Four Properties that are situated in Oshawa, mostly Whitby, Ajax and Pickering. For this reason the Appellant argues that it is relevant for it to receive a list of properties that are classified as ‘property code 105: vacant commercial land’ defined in the homogeneous area for the Four Properties. The Appellant argues that the relevance of PAD data is crucial, and that it is unable to exercise its fundamental rights in the assessment appeal process due to the lack of access to this information. The Appellant maintains that, without access to the PAD data, it becomes impossible to compare properties that the Appellant considers to be similar.

22In response MPAC submits that it has provided the Property Assessment Details for the Four Properties as an appendix to its Valuation Report.

23In addressing Disclosure Request No. 3, the Board relies on its analysis in its findings respecting Disclosure Request No. 2. Again, it is incumbent on the Appellant to identify the property valuation evidence on which it will rely. This will provide the necessary sufficient specificity for the Board to adjudicate any disputed requests for disclosure.

24For these reasons, the request is denied.

Disclosure Request No. 4

A copy of MPAC’s Inspection report of “the Subject Property”

25The Appellant asserts that the only way to obtain the inspection report is for MPAC to provide it. The Board assumes that “the Subject Property” refers to each of the Four Properties.

26MPAC states that, as all of the Four Properties are vacant land, there are no inspection reports available.

27In addressing the Appellant’s disclosure request, it is trite to observe that, since MPAC has no such documents, there is nothing to disclose. The Appellant has not argued that MPAC's statement is untrue. As such, there was no basis for advancing this disclosure request in this Motion Hearing.

28For this reason, the request is denied.

Disclosure Request No. 5

A copy of MPAC’s inspection reports for any and all other properties listed in the excel spreadsheet in the homogeneous area.

29The Appellant states that the issue is “A lack of disclosure relates to the preparation of the SOI.” and the ability to reply fully to MPAC's Statement of Response (“SOR”).

30The Appellant asserts that the only way to obtain the inspection report is for MPAC to provide it.

31MPAC submits that this request is framed too broadly, and such a wide swath of data is not proportionate at this stage in the proceeding. MPAC asserts that searching inspection details on all properties in the homogeneous neighbourhood would be very time consuming and tedious. MPAC states that it has included information for the comparable properties relied upon in its Statement of Response.

32In addressing this disclosure request, the Board again relies on its finding made in the previous disclosure requests. The Board has already identified that the Appellant’s description of the issue is not an issue in the proceeding. To this, the Board adds that it simply refers to a request for assistance in preparing the Appellant’s case.

33The request also lacks the required specificity, as it does not indicate whether the requested inspection data would be relevant to an issue in dispute. In light of this ambiguity, the Board accepts MPAC's submission that the request is not proportionate.

34For these reasons the request is denied.

Disclosure Request No. 6

A list of all properties classified as property code ‘105: Vacant Commercial Land’ in the homogeneous area that received reductions by the Request for Reconsideration process, minutes of settlement or orders of the Board as a result of 2016 appeals and the reasons for the reductions.

35The Appellant states that the issue is “A lack of disclosure relates to the preparation of the SOI.” and the ability to reply fully to MPAC's Statement of Response (“SOR”).

36The Appellant refers to the fact that MPAC has submitted its Statement of Response, asserting that MPAC has providing a list of a few highly selective properties that MPAC believes are similar. However, if the Appellant has not yet served its Statement of Issues, the Appellant has not explained how MPAC could have submitted a Statement of Response. In any event, the Appellant submits that, to carry out a comprehensive valuation analysis and equity analysis, it is imperative to determine which properties received reductions from MPAC and the reasons behind these reductions. The Appellant further asserts that this information will aid in facilitating a resolution to this matter and minimizing the need for a hearing.

37In response, MPAC submits that this request is not relevant to the determination of the current value of the Four Properties. MPAC asserts that properties that have assessment values that have been adjusted through the Request for Reconsideration process or on appeal, are property specific in nature, based on individual appraisal/valuation review.

38In addressing this disclosure request, the Board again relies on its findings respecting the previous disclosure requests. The Board further finds that the Appellant has not established that this information is relevant. The Board’s jurisprudence is well-established in finding that, when determining current value, it is actual sale values on which the Board must rely, not assessed values. Furthermore, to the extent that another property’s assessed value is relevant, it would be the assessed value, itself, that would be relevant, not whether the assessed value resulted from a Request For Reconsideration, or a disposition in an appeal proceeding under s. 40 of the Act. Therefore, the Board finds that this disclosure request is not relevant.

39For these reasons, the request is denied.

Disclosure Requests for the Ainslie Street Property

Disclosure Request No. 1

A proper map defining the boundaries of the homogeneous area in which the Subject Property is located and a pointer locating each of the properties that MPAC claims to be comparable and identifying each.

40The Appellant states that the issue is: “According to Section 44(3)(b) of the Assessment Act, MPAC failed to provide a defined vicinity specification.”

41The Appellant submits that, prior to submitting its Statement of Issues, the Appellant must possess a comprehensive comprehension of the evidence, specifically similar properties, that MPAC is utilizing to ascertain fair market rents since they are relying on the income approach.

42The Appellant further states that the neighbourhood where the Ainslie Street Property is situated is an extremely distinctive area, and it is crucial to ascertain the neighbourhoods in which MPAC has identified comparable properties to the Ainslie Street Property.

43MPAC states that it did not use comparable properties to establish the rent applied to the Ainslie Street Property. MPAC used the actual rent supplied “through the 2014 TIP program” to adjust market rents for the bowling alley and office/storage units as the property is underperforming. MPAC further states that it will be providing a ‘vicinity’ in its Statement of Response. However, MPAC argues that the Appellant’s request is premature since the parties have not exchanged issues and responses. MPAC further asserts that the Appellant can utilize its AboutMyProperty website which provides property owners the ability to access and retrieve property information within their requested parameters.

44In addressing this request, the Board finds that it lacks sufficient specificity for the Board to determine relevance. In this regard, the Board notes that the Appellant has not disputed MPAC's statement that it did not use comparable properties to establish fair market rents. The Appellant’s submission is also unclear, in that, the issue cited is whether there should be an equitable adjustment under s. 44(3)(b) of the Act. The Appellant has not explained how the method of determining fair market rents would serve to delineate “vicinity” under s. 44(3)(b). Finally, the Board accepts that this disclosure request is premature. As the Board has stated earlier in this Motion Decision, the Appellant is required to prepare its case in support of its position on current value and equitable reduction. Once MPAC provides its evidence in response, which presumably will refer to evidence respecting other properties, the Appellant may request specific disclosure from MPAC respecting these other properties.

45For these reasons, the Board denies this request.

Disclosure Request No. 2

A copy of the list or excel spreadsheet of all assessments classified as ‘425 Neighbourhood shopping centre – a minimum of two stores (under one ownership) and with one anchor, generally less than 150,000 square feet’, ‘426 Small box shopping centre – a minimum of three box stores usually with one anchor, generally less than 100,000 square feet’ and ‘105: Vacant Commercial Property in the homogeneous area.

46The Appellant states that the issue is: “A lack of disclosure relates to the preparation of the SOI. Evaluation of the ‘MVR Addendum – Summary of Reported Rents per Sq. Ft. Used in Retail FMR Analysis’”

47The Appellant asserts that the AboutMyProperty website does not provide rents. The Appellant states that it needs to know which properties are being used for comparison purposes, their location, usage, and whether rents are being used for comparable properties.

48MPAC reiterates that it will not be relying on rental data of retail properties for this appeal as the property is now considered development land.

49In addressing this request, the Board relies on its findings on the previous request. The Appellant is again making a general request which lacks sufficient specificity to enable the Board to determine relevance. The Board reiterates that the Appellant is required to prepare its case in support of its position on current value and equitable reduction. Once MPAC provides its evidence in response, which presumably will refer to evidence respecting other properties, the Appellant may request disclosure from MPAC respecting these other properties.

Disclosure Request No. 3

The Appellant requests a Statement of Net Operating Income (“NOI”) for each property MPAC considered in its analysis to form its base valuation, including a statement documenting sales investigation results and a list of properties with sales representing reliable indicators of current value of all assessments classified as ‘425 Neighbourhood shopping centre –a minimum of three box stores usually with one anchor, generally less than 100,000 square feet’ in the homogeneous area.

50The Appellant states that the issue is: A lack of disclosure relates to the preparation of the SOI. Evaluation of the ‘MVR Addendum - Summary of Reported Rents per Sq. Ft. Used in Retail FMR Analysis’”

51The Appellant makes the same submissions as it did in Disclosure Request No. 2. In addition, the Appellant explains its reason for requesting this disclosure, asserting that, without the requested information “it feels like shooting an arrow without a target”. The Appellant asserts that it is MPAC's responsibility to defend its assessment and, therefore, MPAC should provide, in advance, its evidence respecting “the calculation of the properties being used”. The Appellant submits that not receiving this information until after it delivers its Statement of Issues, seems counter-productive, and, in this case, goes against the principles of natural justice, which the Appellant asserts is the right to know and defend its position.

52In response, MPAC states that, because Property Assessment Details (PADs) only exist for residential properties valued using the mass appraisal model, no PAD exists for the subject property. MPAC submits that a party is only required to disclose “relevant documents in their possession, control or power,” they are not required to create documents. MPAC states that these documents do not exist, so they cannot be disclosed.

53MPAC also submits that the request for net operating income for each property is overbroad, further stating that MPAC may consent to releasing information around particular properties, but noting that s. 53 of the Act may limit its ability to provide certain information.

54In addressing this request, the Board observes that the Appellant’s submission misapprehends the scope of Rule 45. The Board has earlier observed that the Appellant is required to prepare its own case in support of its position on current value and equitable reduction. Rule 45 does not provide for prospective disclosure of general information. In an appeal proceeding, an appellant is required to identify its issues and serve its evidence in support of its position. Where an appellant disagrees with MPAC's response, the appellant may request disclosure of relevant documents, and then serve its reply. Consequently, as the Appellant is provided with full opportunity to respond to MPAC's evidence, there is no denial of natural justice or the right to be heard.

55In conclusion, the Board finds this request to be premature and non-specific, and for these reasons, denies the request.

Disclosure Request No. 4

A copy of MPAC’s inspection report of the Subject Property.

56In response to this request, MPAC states that no interior inspection has taken place as the subject property is boarded up. The Appellant does not dispute this statement.

57As the requested document does not exist, there is nothing to disclose. For this reason, the Board denies the Appellant’s request.

Disclosure Request No. 5

A copy of MPAC’s inspection reports for any and all other properties listed in the excel spreadsheet in the homogeneous area.

58This request raises the same issues as Disclosure Request No. 5 in respect of the Four Properties. Therefore, the Board relies on its earlier analysis, and for the reasons set out in that analysis, dismisses this request.

Disclosure Request No. 6

A list of all properties classified as ‘425 Neighbourhood shopping centre –a minimum of two stores (under one ownership) and with one anchor, generally less than 150,000 square feet’, ‘426 Small box shopping centre – a minimum of three box stores usually with one anchor, generally less than100,000 square feet’ and ‘105: Vacant Commercial Property’ in the homogeneous area that received reductions by the Request for Reconsideration process, minutes of settlement or orders of the Board as a result of 2016 appeals and the reasons for the reductions.

59This request raises the same issues as Disclosure Request No. 6 in respect of the Four Properties. Therefore, the Board relies on its earlier analysis, and for the reasons set out in that analysis, dismisses this request.

Disclosure Request No. 7

A Statement of Capitalization Rate, including market income and sales information for each property and sales information, as well as a list of all sales that were considered in preparation of the capitalization rate study and capitalization rate analyses listed in the excel spreadsheet in the homogeneous area.

60The Appellant submits that the purpose of this request is to determine if the capitalization rate, as applied by MPAC is correct.

61In response, MPAC states it will not be utilizing a capitalization rate in its valuation of the subject property because it is now mixed-use development land. MPAC submits that, as the subject property will not be valued using a capitalization rate going forward, the calculation of this rate is not necessary for the current state and condition of the property.

62In addressing the Appellant’s request, MPAC's response indicates that capitalization rates will not be an issue in this appeal proceeding, and, therefore, this request is not relevant to an issue in dispute. For this reason, the Board denies this request.

Amendment of the Schedule of Events

63Due to the delay occasioned by this Motion Hearing, the Board will amend the Schedule of Events for each of the appeal proceedings.

64As the disputes raised in this Motion Hearing relate to initial disclosure to be provided by MPAC, neither the appeal proceeding respecting the Four Properties, nor the appeal proceeding respecting the Ainslie Street Property, has progressed beyond the assigned Commencement Day set out in their Schedules of Events. For this reason, the Board amends both Schedules of Event to provide for a new Commencement Day of January 15, 2024.

ORDER

65The Motion is dismissed.

66The Schedule of Events for each of the appeal proceedings is amended to provide for a new Commencement Day of January 15, 2024.