Access Self Storage Inc. v. Municipal Property Assessment Corporation Region 21, 2024 CanLII 40026

Tribunals Ontario - Assessment Review Board

ISSUE DATE: May 01, 2024 AMENDED MOTION DECISION ISSUED: May 03, 2024 FILE NO.: DM 185992A

Assessed Person(s): Access Self Storage Inc. Appellant(s): Access Self Storage Inc. Respondent(s): Municipal Property Assessment Corporation Region 21 Respondent(s): City of Kitchener Property Location(s): 50 Ottawa Street Municipality(ies): City of Kitchener Roll Number(s): 3012-040-007-21700-0000 Appeal Number(s): 3522937, 3522939 and 3522938 Taxation Year(s): 2018, 2019 and 2020 Hearing Event No.: 783296

Legislative Authority: Section 33 of the Assessment Act, R.S.O. 1990, c. A.31 and Rules 27 to 29 of the Rules of Practice and Procedure.

Parties and Counsel

• Access Self Storage Inc.: Richard Minster and Dan Rosman
• Municipal Property Assessment Corporation: Donald G. Mitchell
• City of Kitchener: Cynthia Kuehl

REQUEST FOR: Withdrawal of Appeal(s) HEARD: March 14, 2024 in writing ADJUDICATOR(S): Carly Stringer, Member

AMENDED MOTION 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 Motion Decision is issued to correct error(s) in the Motion Decision regarding submissions provided by the Municipal Property Assessment Corporation in the Appearances section on page 1 and in paragraphs 3, 22, 23, 27, 36 and 37. The amendments have been underlined for ease of reference. There are no other changes in this Amended Motion Decision.

OVERVIEW

Motion to Withdraw

1Access Self Storage Inc. (“the Appellant”) has filed this motion with the Assessment Review Board (the “Board”) seeking to withdraw appeals relating to the assessment of 50 Ottawa Street in the City of Kitchener (the “Subject Property”). The Appellant argues that:

1. It is permitted to withdraw these appeals “as of right” pursuant to Rule 27 of the Board’s Rules of Practice and Procedure (the “Rules”); or, in the alternative;

2. The Board should grant it leave to withdraw pursuant to Rule 29 of the Rules.

2The City of Kitchener (the “City”) opposes the Appellant’s request. The City says that the Appellant cannot withdraw “as of right” because the City has provided notice that it is seeking a higher assessment. The City also argues that the Board should not grant leave to withdraw.

3The Municipal Property Assessment Corporation (“MPAC”) agrees with the Appellant.

Result

4For the reasons that follow, the Board denies the Appellant’s motion.

BACKGROUND

Assessment History

5The Subject Property is a self-storage facility operated by the Appellant.

6The Subject Property was assessed at a current value of $2,033,000 for the 2017 to 2020 taxation years (the “2017 to 2020 Assessments”). The Appellant did not appeal these assessments.

7On November 13, 2020, further assessments were issued against the Subject Property pursuant to s. 33 of the Assessment Act, R.S.O. 1990, c.A.31 (the “Act”). Section 33 permits MPAC to correct omissions where land liable to assessment has been in whole or in part omitted from the roll. In this case, certain improvements built on the Subject Property were omitted from the roll and were not assessed as part of the 2017 to 2020 Assessments. These s. 33 assessments reflected a value of $2,916,000 effective January 1, 2018, January 1, 2019 and January 1, 2020 (“the s. 33 Assessments”).

8The Subject Property was subsequently assessed for the 2021 taxation year at $7,734,000 (the “2021 Assessment”).

The Appeals

9The Appellant appealed the s. 33 Assessments pursuant to s.40(1) (a) (i) (the “2018 to 2020 s. 33 Appeals”) on the basis that the current value is incorrect. The Appellant appealed the 2021 Assessment on the same basis, and appeals were deemed for the 2022 to 2024 taxation years pursuant to s. 40(26) of the Act (the “2021 to 2024 Appeals”).

10On this motion, the Appellant seeks to withdraw only the 2018 to 2020 s. 33 Appeals.

Rules Regarding Withdrawal

11Rules 27 and 28 of the Board’s Rules of Practice and Procedure (the “Rules”) govern the withdrawal of appeals, as follows:

Withdrawal of an Appeal

27. An appellant may withdraw an appeal unless:

(a) another party has given notice pursuant to these Rules of its intention to request a higher assessment or higher tax rate property class; or

(b) a hearing has commenced.

Notice to Seek a Higher Assessment

28. A party is deemed to have given notice of its intention to seek a higher assessment or higher tax rate property class where:

(a) the party has included its request in its Statement of Issues or Statement of Response; or

(b) the party delivers a separate written notice of its request, which is served on all parties and filed with the Board at any time prior to the due date in the Schedule of Events for serving its Statement of Issues or Response.

12To summarize, the Appellant can unilaterally withdraw the 2018 to 2020 s. 33 Appeals so long as another party has not given notice that they will be seeking a higher assessment value. If a party has given notice that they will be seeking a higher assessment value, then the Appellant needs the Board’s permission to withdraw its appeals.

Parties’ Positions on the Appeals

13The Appellant served a single Amended Statement of Issues (“SOI”) for the 2018 to 2020 s.33 Appeals and the 2021 to 2024 Appeals together. The Appellant argued that the 2016 current value assessment (“CVA”), prior to an equitable reduction, should be $3,130,000.

14MPAC served a single Amended Statement of Response (“SOR”) for the 2018 to 2020 s. 33 Appeals and the 2021 to 2024 Appeals together. MPAC argued the correct 2016 CVA is $7,564,000.

15The City served a single Amended SOR for the 2018 to 2020 s. 33 Appeals and the 2021 to 2024 Appeals together. The City argued that the 2016 CVA should be in the $8,536,000 to $8,815,000 range.

Resolution Discussions

16The 2018 and 2020 s. 33 Appeals and the 2021 to 2024 Appeals were scheduled to a single hearing on November 15 and 16, 2023. In advance of the hearing, the parties engaged in settlement discussions via email.

17On November 6, 2023, the parties cancelled the hearing on the basis that they had settled.

18During the process of preparing Minutes of Settlement, the Appellant took the position that it would withdraw the 2018 to 2020 s. 33 Appeals. The City disagreed, stating that the parties’ settlement required a change to the current value reflected in the s. 33 Assessments.

19The Appellant subsequently sought to withdraw the 2018 to 2020 s. 33 Appeals.

Parties’ Positions on This Motion

20The Appellant argues that it is entitled to withdraw the 2018 to 2020 s. 33 Appeals “as of right” pursuant to Rules 27 and 28 of the Board’s Rules because, it says, the City did not provide notice of its intent to seek an increase to the value reflected in the s. 33 Assessments. The Appellant argues, in the alternative, that the Board should grant it permission to withdraw pursuant to Rule 29.

21The City says that it provided notice of an intent to seek a higher assessment, and therefore the Appellant cannot withdraw “as of right” pursuant to Rule 27. The City further argues that the Board should not permit the Appellant to withdraw the 2018 to 2020 s. 33 Appeals pursuant to Rule 29.

22MPAC agrees with the Appellant.

23The Board notes that the parties devoted submissions to whether their settlement should apply to the 2018 to 2020 s. 33 Appeals. The Board makes no determinations in this regard. This motion will solely address whether the Appellant can withdraw the 2018 to 2020 s. 33 Appeals.

ISSUES

24The issues to be determined on this motion are:

1. Can the Appellant withdraw the 2018 to 2020 s. 33 Appeals “as of right” pursuant to Rule 27?

2. If the answer to Issue 1 is “no”, should the Appellant be granted leave to withdraw the 2018 to 2020 s. 33 Appeals pursuant to Rule 29?

ANALYSIS

Issue 1 – Can the Appellant withdraw the 2018 to 2020 s. 33 Assessment Appeals “as of right” pursuant to Rule 27?

Evidence and Submissions of the Parties

25The Appellant submits that the City did not include a notice of higher assessment in its SOR in relation to the 2018 to 2020 s. 33 Appeals, nor did it provide a separate written notice in accordance with Rule 28. The Appellant states that the City did not provide a figure for an increase to the s. 33 Assessments, nor did it provide a supporting basis, in fact or law, for an increase to the s. 33 Assessments, as required by Rule 28. The Appellant submits that the s. 33 Assessments were not even mentioned in the City’s pleadings or in its expert report.

26The City submits that it did provide notice of seeking a higher assessment in its SOR. The City submits that it satisfied the requirements for notice set out in the Rules, including stating the basis on which it sought this higher assessment value. The City said it provided notice of how it was calculating the increase for the 2018 to 2020 s. 33 Appeals – namely, that the value of the land omitted equals the correct total assessed value less the value of land already returned in the 2017 to 2020 Assessments which were not appealed.

27MPAC states that it returned the value for 2021 at $7,734,000 based on a change in opinion of value and not on land omitted from the roll, therefore the increase could not have been omitted for 2018 to 2020. MPAC states that the only issue in the s. 33 appeals is the correctness of the quantum of the omitted value, and that no one challenged the correctness of the omitted assessments.

Findings on Issue 1

28This issue turns on whether the City provided notice of an intent to seek a higher assessment value in the 2018 to 2020 s. 33 Appeals. If it did, then the Appellant cannot withdraw the 2018 to 2020 s. 33 Appeals “as of right”.

29The Board finds that the City provided notice of an intent to seek a higher assessment in the 2018 to 2020 s. 33 Appeals. The City’s SOR, which applies to both the 2018 to 2020 s. 33 Appeals and the 2021 to 2024 Appeals, states that its determination of current value ranges from $8,536,000 to $8,815,000. This is higher than the value reflected on both the s. 33 Assessments and the 2021 to 2023 Assessments returned by MPAC. While the City did not explicitly apportion its proposed value between the 2018 to 2020 s. 33 Appeals and 2021 to 2024 Appeals, it is clear from the City’s materials that it was seeking a total assessment value higher than what MPAC returned on its assessments, and that the City’s SOR applied to all appeals including the 2018 to 2020 s. 33 Assessment Appeals. The City outlined the facts, inputs, methodologies and grounds it used to determine its proposed value. The City clearly stated its position that the correct current value of the Subject Property should be higher than the values returned on the assessments under appeal.

30The City’s approach, in this regard, is consistent with s. 33(6) of the Act, which provides that “[i]f the assessment corporation makes an assessment or classification under this section [s.33], the appropriate changes shall be made on the assessment roll for the next year, even if the day as of which land is valued for the next year is the same as for the current year.” In this regard, the current value reflected in the 2021 Assessment would have included the value reflected in the s. 33 Assessments. It is not inappropriate, therefore, for the City to have focused on the total assessed value as of January 1, 2016 in its materials.

31The Board finds that the City provided notice of an intent to seek a higher assessment. For this reason, the Board finds that the Appellant cannot withdraw the 2018 to 2020 s. 33 Appeals “as of right” pursuant to Rule 27.

Issue 2 – Should the Appellant be granted leave to withdraw the 2018 to 2020 s. 33 Appeals pursuant to Rule 29?

Applicable Rules and Law

32Rule 29 of the Board’s Rules provides that “[a]n appellant may, by motion, request an order of the Board granting leave to withdraw an appeal”.

33The Rules do not provide any specific factors or criteria that the Board should consider when deciding a Rule 29 request.

Evidence and Submissions of the Parties

34The Appellant submits that the Board should grant it permission to withdraw, for the following reasons:

1. There was no notice of increase served, and no basis on which a higher assessment is sought;

2. There is no legal basis to request an increase in the 2018 to 2020 s. 33 Assessments as they deal with omitted structures only, not the 2017 to 2020 Assessment value;

3. There is no prejudice to the City; and

4. The Appellant is prejudiced by being required to proceed with the 2018 to 2020 s. 33 Appeals when there is no basis to increase the s. 33 Assessments.

35The City submits that the Board should deny the Appellant’s request for leave to withdraw, for the following reasons:

1. The City provided valid notice of its intent to seek a higher assessment.

2. There is no procedural unfairness to the Appellant if leave is refused.

3. Granting leave would be unfair to the City as it has participated fully in these proceedings and intended to participate in the November 2023 hearings that were cancelled based on good faith settlement discussions.

4. Because the hearing did not proceed, the City was denied any opportunity to put forward its evidence.

5. These appeals proceeded through all the steps to hearing without any prior indication by the Appellant that it intended to withdraw. The City is simply attempting to put the parties in the same position they were in as of November 2023 on the eve of hearing.

6. There is no prejudice to the Appellant. Proceeding with an appeal, in and of itself, does not constitute prejudice to a party.

7. The City has been prejudiced by losing hearing dates in November 2023, and will be prejudiced if denied the opportunity to put forward evidence at a hearing.

36MPAC submits that even if the Appellant were not permitted to withdraw the 2018 to 2020 s. 33 Appeals, the value of the omitted assessments cannot be increased to the settled amount, and the City of Kitchener cannot succeed in the appeals as it has failed to raise the value of the omitted assessments as an issue and failed to adduce evidence regarding the value of the omitted assessments.

Findings on Issue 2

37The Board denies the Appellant’s request for leave to withdraw the 2018 to 2020 s. 33 Appeals. The Board rejects the Appellant’s and MPAC’s submissions, and finds as follows:

1. The Board does not accept the Appellant’s argument that the City did not provide a notice of intent to seek a higher assessment. As outlined above, the Board finds that the City did provide notice of an intent to seek a higher assessment.

2. The Board does not accept the Appellant’s argument that it should be granted leave because there is no legal basis to request an increase in the 2018 to 2020 s. 33 Assessments. The Appellant relies on Toronto (City) v. Municipal Property Assessment Corporation, 2013 ONSC 6137 for the proposition that if the total assessment is being challenged, then the City ought to have filed appeals of the 2017 to 2020 Assessments because s. 33 deals with omitted structures only and not the original returned assessment. The Board does not accept the Appellant’s submissions in this regard. First, this issue was not squarely before the Divisional Court in Toronto (City) v. MPAC, and therefore that case has limited application, if any, to this motion. Second, the Appellant used the 2018 to 2020 s. 33 Appeals to challenge the current value reflected in the s. 33 Assessments. The Appellant posited in its SOI that there should be a lower total 2016 CVA, and that the value of the s. 33 Assessments should also be recalculated. It is also clear from the City’s SOR that it sought a higher total 2016 CVA, and that this SOR applied to both the 2018 to 2020 s. 33 Appeals and the 2021 to 2024 Appeals. While neither the City’s SOR nor the City’s expert report explicitly challenge the current value reflected in the s. 33 Assessment, the City challenged the correctness of the 2016 CVA, of which the s. 33 Assessment values are a part. The City has provided evidence that its expert would derive a value for the s. 33 Assessments by subtracting the original 2016 returned value of $2,033,000 from her proposed total value of $8,536,000 to $8,815,000. While it is for a Hearing Member to decide whether that is an appropriate way to derive value of the omitted structures that were assessed pursuant to s. 33, it cannot be said that there is no legal basis to challenge the s. 33 Assessments because there are no appeals of the 2017 to 2020 Assessments. What the Appellant really disputes is the valuation method by which the City challenges the s. 33 Assessment value. That is for a Hearing Member to decide and does not weigh in favour of granting the Appellant’s request to withdraw. Overall, the Board finds that the City has put forward a reasonable case relating to its request for a higher assessment.

3. With respect to prejudice, the Board finds there is insufficient evidence of prejudice from the Appellant. The Appellant did not provide affidavit evidence attesting to the nature of prejudice it would suffer in the event the Board does not grant this request to withdraw. In contrast, the Board accepts the City’s submissions that the Appellant did not indicate an intent to withdraw the 2018 to 2020 s. 33 Appeals at any time prior to the settlement between the parties, and that denying leave at this point would simply put the parties back into the same position they were in prior to canceling the hearing in November 2023, which the Board finds does not prejudice the Appellant. The Board accepts the evidence of prejudice to the City if it is denied a hearing, particularly after the City has participated at every stage of the 2018 to 2020 s. 33 Appeals.

CONCLUSION

38The Board finds that the Appellant may not withdraw the 2018 to 2020 s. 33 Appeals pursuant to Rule 27. The Board denies the Appellant’s request for leave to withdraw the 2018 to 2020 s. 33 Appeals pursuant to Rule 29.

ORDER

39The Board orders that the Appellant’s motion is denied.

40The Appellant is directed to confer with MPAC and the City and file an Expedited Board Direction Form (“EBDF”) outlining proposed next steps in these proceedings within 10 days of this Order. If MPAC and the City do not agree with the Appellant with respect to next steps, MPAC and/or the City are directed to provide their submissions regarding proposed next steps with the Appellant’s EBDF. The parties are directed to include three proposed dates for hearing the appeals in July 2024.