Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: May 16, 2024
Assessed Person(s): Vale Canada Limited; Glencore Canada Corporation; Xstrata Canada Corporation
Appellant(s): City of Greater Sudbury
Respondent(s): Municipal Property Assessment Corporation Region 30
Respondent(s): City of Greater Sudbury
Property Location(s): See Schedule A
Municipality(ies): City of Greater Sudbury
Roll Number(s): See Schedule A
Appeal Number(s): See Schedule A
Taxation Year(s): 2017 to 2024
Hearing Event No.: 783471
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
Parties
Counsel
Glencore Canada Corporation; Xstrata Canada Corporation
Kathleen Poole and Karina Wong
Vale Canada Limited
Phillip Sanford and Belinda Schubert
Municipal Property Assessment Corporation
Sarah W. Corman and Michelle Stephenson
City of Greater Sudbury
Richard Minster and Dan Rosman
REQUEST FOR: An order excluding expert evidence
HEARD: April 11, 2024 in writing
ADJUDICATOR(S): Carly Stringer, Member
MOTION DECISION
OVERVIEW
1The City of Greater Sudbury (the “City”) is asking the Assessment Review Board (the “Board”) to make an order excluding expert evidence provided by Glencore Canada Corporation (“Glencore”) in appeals relating to the assessments of eight mining properties.
2Glencore, along with the Municipal Property Assessment Corporation (“MPAC”) and Vale Canada Corporation (“Vale”), is responding to the City’s appeals. Glencore owns four of the mining properties at issue in these appeals, while Vale owns the other four.
3Glencore, MPAC and Vale oppose the City’s request to exclude Glencore’s expert evidence.
4The Board will focus these reasons on the particulars of the City’s request, rather than revisiting the extensive factual and procedural background to these appeals.
Result
5For the reasons that follow, the Board denies the City’s request to exclude expert evidence.
Background
6Glencore and Vale’s eight mining properties are improved with specialized heavy industrial buildings. The parties agree that the Cost Approach valuation methodology should be used to value these properties.
7The Schedule of Events (“SOE”) in these proceedings required the parties to file an Acknowledgment of Expert Duty (“AED”) signed by each of the parties’ experts within ten days of filing the Mandatory Meeting Form with the Board, which worked out to be June 29, 2023. Glencore filed AEDs signed by five different experts in accordance with this deadline.
8The parties exchanged expert reports on November 6, 2023. The City served a report prepared by its expert Mathias Hintikka (the “Hintikka Report”).
9The parties agreed to exchange supplementary reports by December 20, 2023. On that day, Glencore served a “Review Report” prepared by Malcolm Stadig (the “Stadig Report”). Glencore also served and filed an AED signed by Mr. Stadig. December 20, 2023 was the first time Glencore delivered an AED signed by Mr. Stadig – Glencore had not served or filed it in June 2023.
The City’s Motion to Exclude
10The City has brought this motion asking the Board to exclude the Stadig Report from evidence for the hearing, and exclude Mr. Stadig as a witness at the hearing of these appeals. The City has made extensive submissions in support of its request, and its reasons for excluding the evidence can be summarized as follows:
a. Glencore breached the Board’s Rules of Practice and Procedure (the “Rules”) and the Schedule of Events in these proceedings when it failed to file an AED for Mr. Stadig by June 29, 2023; and
b. The Stadig Report is not proper reply evidence.
ISSUES
11The following issues will be addressed in this Motion Decision:
a. Should the expert evidence be excluded because Glencore did not file an AED signed by Mr. Stadig by June 29, 2023?
b. Should the expert evidence be excluded because it is not proper reply?
ANALYSIS
Issue 1 – Should the expert evidence be excluded because Glencore did not file an AED signed by Mr. Stadig by June 29, 2023?
Evidence and Submissions of the Parties
12The City states that an AED for Mr. Stadig was due by June 29, 2023, and it was not served and filed until December 20, 2023. The City submits that Rule 40 of the Board’s Rules provides that the Board will not alter any due date set out in the SOE other than in exceptional circumstances, and that there are no exceptional circumstances in this case as Glencore has been aware of the issues in dispute since the pleadings. Further, the City submits, even if there were exceptional circumstances, the City has been prejudiced and Glencore has not. The City does not have a chance to respond to Mr. Stadig’s evidence, while Glencore has three other expert witnesses, in addition to MPAC’s two expert witnesses that Glencore supports. The City relies on 2155110 Ontario Inc. v Municipal Property Assessment Corporation, Region 23, 2022 CanLII 7580 (ON ARB) (“Old Oak”), where the Board excluded expert evidence where the AED was filed outside of the timeline prescribed by the SOE.
13Glencore disagrees with the City’s interpretation of the Rules. Glencore argues that it was only required to provide one AED to satisfy the Rules because the direction was that “all parties must serve and file a completed and signed [AED]” and that the Rules do not state that an AED for a specific expert is required in order to file that expert’s report. Glencore submits that it is in substantial compliance with the Rules because it filed AEDs on June 28, 2023 and it complied with the December 20, 2023 deadline for exchange of supplementary expert reports. Glencore further submits that the Hintikka Report introduced new issues and valuation methodology not set forth in the City’s Statement of Issues (“SOI”), which required Glencore to provide specific reply evidence.
14Vale submits that the Rules do not preclude a party from calling evidence from a reply witness where an AED was not earlier filed. In the alternative, Vale further submits that there are exceptional circumstances to permit late filing of the AED.
15MPAC submits that the Rules do not bar the parties from changing or adding experts after the AED filing date and that Glencore did not breach the Rules or the timeline in the SOE. MPAC also submits that the relief sought by the City is not appropriate to the circumstances, would severely prejudice Glencore, and there is no prejudice to the City of allowing the expert evidence. MPAC submits, in the alternative, that if exceptional circumstances are required, they are present in this case as the City’s substantially revised position was set out for the first time in the Hintikka Report.
Findings on Issue 1
16The SOE provides that “each party shall file with the Board an Acknowledgement of Expert Duty signed by each of their experts” (emphasis added) no later than ten days from the due date for filing the Mandatory Meeting Form. While there is no explicit bar to filing an AED after that date, the Board finds that the clear wording of the SOE required Glencore to file an AED signed by each of its experts – including Mr. Stadig – by June 29, 2023. Accordingly, the Board finds that Glencore failed to comply with the SOE when it filed the AED on December 20, 2023.
17Rule 7 provides that the Board “will determine the appropriate consequences of non-compliance with these Rules”. When determining the appropriate consequence for failure to comply with the Rules, the Board will consider i) the circumstances surrounding the non-compliance; and ii) prejudice to the parties: see Orlando Corporation v Municipal Property Assessment Corporation, Region 15, 2021 CanLII 8253 (ON ARB) at paragraph 23, leave to appeal denied in Amazon.com v. The City of Brampton, 2022 ONSC 297.
18The Board does not accept the City’s argument that the appropriate consequence for Glencore’s non-compliance is to exclude Mr. Stadig’s expert evidence, for the following reasons:
a. With respect to circumstances surrounding Glencore’s non-compliance with the SOE, the Board finds that Glencore could not have anticipated the information in the Hintikka Report by the filing deadline to file the Stadig AED. The Board finds that the information in the Hintikka Report both differs from, and is more specific than, what is contained in the City’s Amended SOI. For instance:
i. In the Amended SOI, the City challenges MPAC’s costing of improvements using the Automated Costing System (“ACS”). The City pleads that ACS rates are undercosted and references that MPAC derived ACS rates from the third-party agency Hanscomb. Specifically, the City pleads that i) ACS undercosts major building elements by at least 33% compared to the Marshall and Swift Estimator; and ii) ACS undercosts compared to the RS Means costing manual. For this reason, the City argues that costing rates should adjusted upward by 33%. The Hintikka Report takes a different approach, stating that i) MPAC did not actually use the costing rates provided by Hanscomb, and ii) MPAC misapplied ACS which resulted in undercosting by 2.6% to 6.7%.
ii. In the Amended SOI, the City takes the position that there should not be an adjustment for External Operating Costs because the buildings are operating exactly as intended and as it has been since construction: see paragraph 39, for instance. While the Hintikka Report takes the same general approach, it provides much more specific evidence. The Board finds that this could not have been anticipated in advance by Glencore.
b. To put it simply, the City’s Amended SOI presents the same general issues as the Hintikka Report (for instance, that ACS undercosts building components), but the evidence in the Hintikka Report could not have been known from the pleadings. In these circumstances, the Board does not accept the City’s submissions that Glencore ought to have known of the need for the Stadig expert evidence by the June 29, 2023 deadline to file the AED. Further, the Board does not accept the City’s submission that there is no need for the Stadig expert evidence because all the issues were known to Glencore and raised in the parties’ pleadings.
19The Board finds that Glencore would be prejudiced from excluding the Stadig expert evidence. While Glencore has other experts to provide a reply critique of the Hintikka Report, the Board finds, based on the evidence provided, that Mr. Stadig has directly relevant knowledge and experience relating to the 2016 valuation model for mining properties. He has provided his own expert report for information within his knowledge and expertise. In this regard, the situation is different than Old Oak relied on by the City. In that case, MPAC already had an expert providing evidence regarding a valuation report and an equity report. MPAC sought to have a new expert provide evidence on the same equity report for which it already had a witness. MPAC did not propose to tender new evidence from its new expert. For that reason, the Board found in Old Oak that there was no prejudice to MPAC because it already had an expert testifying to the exact same evidence. This is not the same as a situation where Glencore has a new expert witness seeking to provide new expert evidence.
20With respect to prejudice to the City, the Board accepts that the timing of the Stadig AED could be prejudicial to the City in that there is no opportunity for the City to reply to the information in the Stadig Report. That said, the City has not identified the specific information in the Stadig Report which requires it to retain an expert with similar background to Mr. Stadig. The City has not named a proposed expert, or provided any further particulars regarding witnesses it would have contacted or discoveries it would have requested - despite the Board having asked the City to identify “the nature of the information contained in the Stadig Report which the City says is specific to his knowledge as a former employee and director at MPAC that requires the City to retain an expert with similar background”: see EBDF Disposition dated January 14, 2023. Overall, the City appears to be in the same situation as all other parties in not being permitted further reply to a supplementary report given there is simultaneous exchange of information. The Board finds there is insufficient evidence of prejudice to the City that outweighs the prejudice to Glencore if the expert evidence were excluded.
21In all of the circumstances outline above, the Board does not accept the City’s request to exclude the Stadig expert evidence as an appropriate consequence for Glencore’s non-compliance with the SOE deadline to file Mr. Stadig’s AED.
Issue 2 – Should the expert evidence be excluded because it is not proper reply?
Evidence and Submissions of the Parties
22The City submits that the Stadig Report is an expert opinion report disguised as a reply report. The City submits that it addresses issues that were known from the pleadings, and so it ought to have been served at the initial exchange of expert reports.
Findings on Issue 2
23The Board does not accept the City’s submissions in this regard. The Board finds that the Stadig Report is proper reply. First, the City’s own affiant on this motion states “the Stadig Report comments on how I presented my findings. It does not supply its own valuation analysis or evidence.” The Board has reviewed the Stadig Report, and is satisfied that it is focused on responding to the specific information and analysis raised for the first time in the Hintikka Report. The Stadig Report does not provide its own valuation analysis or evidence that should have otherwise been provided in the initial expert reports due on November 6, 2023.
24As noted above in relation to Issue 1, the Board finds that the items addressed in the Stadig Report could not have been anticipated by the pleadings alone. Therefore, the Board does not accept the City’s argument that the Stadig Report should have been produced at the initial expert report deadline of November 6, 2023. The Board finds that this expert evidence is proper reply.
ORDER
25The Board orders that this motion is denied.
"Carly Stringer"
CARLY STRINGER
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
SCHEDULE A
Roll Number: 5307-110-002-12300-0000
Address: Copper Cliff (Waters Con. 6, Lot 1)
Appeal
Assessed
Section
Tax Date
3242169
Vale Canada Limited
40
JAN 01, 2017
3278755
Vale Canada Limited
34
JAN 01, 2017
3278756
Vale Canada Limited
34
JAN 01, 2017
3314501
Vale Canada Limited
40
JAN 01, 2018
3314629
Vale Canada Limited
40
JAN 01, 2018
3314684
Vale Canada Limited
40
JAN 01, 2018
3367824
Vale Canada Limited
40
JAN 01, 2019
3367885
Vale Canada Limited
40
JAN 01, 2019
3367963
Vale Canada Limited
40
JAN 01, 2019
3410975
Vale Canada Limited
40
JAN 01, 2020
3411131
Vale Canada Limited
40
JAN 01, 2020
3411045
Vale Canada Limited
40
JAN 01, 2020
3449052
Vale Canada Limited
40
JAN 01, 2021
3449080
Vale Canada Limited
40
JAN 01, 2021
3449089
Vale Canada Limited
40
JAN 01, 2021
3490634
Vale Canada Limited
40
JAN 01, 2022
3490635
Vale Canada Limited
40
JAN 01, 2022
3490676
Vale Canada Limited
40
JAN 01, 2022
Roll Number: 5307-120-001-01000
Address: 6 Totten Mine Road
Appeal
Assessed
Section
Tax Date
3242170
Vale Canada Limited
40
JAN 01, 2017
3314706
Vale Canada Limited
40
JAN 01, 2018
3367959
Vale Canada Limited
40
JAN 01, 2019
3411136
Vale Canada Limited
40
JAN 01, 2020
3449092
Vale Canada Limited
40
JAN 01, 2021
3490672
Vale Canada Limited
40
JAN 01, 2022
Roll Number: 5307-140-002-03900-0000
Address: Levack Con 1 Lot 6 PCL 8144
Appeal
Assessed
Section
Tax Date
3241739
Xstrata Canada Corporation
40
JAN 01, 2017
3431958
Glencore Canada Corporation
33
JAN 01, 2018
3431962
Glencore Canada Corporation
33
JAN 01, 2018
3431963
Glencore Canada Corporation
33
AUG 01, 2018
3314677
Xstrata Canada Corporation
40
JAN 01, 2018
3431964
Glencore Canada Corporation
33
JAN 01, 2019
3431960
Glencore Canada Corporation
33
JUN 01, 2019
3431965
Glencore Canada Corporation
33
FEB 01, 2019
3431959
Glencore Canada Corporation
33
JAN 01, 2019
3367792
Xstrata Canada Corporation
40
JAN 01, 2019
3411062
Glencore Canada Corporation
40
JAN 01, 2020
3431961
Glencore Canada Corporation
33
JAN 01, 2020
3431966
Glencore Canada Corporation
33
JAN 01, 2020
3449058
Glencore Canada Corporation
40
JAN 01, 2021
3490700
Glencore Canada Corporation
40
JAN 01, 2022
3514194
Glencore Canada Corporation
40
JAN 01, 2023
3526501
Glencore Canada Corporation
40
JAN 01, 2024
Roll Number: 5307-140-002-05800-0000
Address: Fraser Mine Road
Appeal
Assessed
Section
Tax Date
3241740
Xstrata Canada Corporation
40
JAN 01, 2017
3314450
Xstrata Canada Corporation
40
JAN 01, 2018
3367918
Xstrata Canada Corporation
40
JAN 01, 2019
3411014
Glencore Canada Corporation
40
JAN 01, 2020
3449088
Glencore Canada Corporation
40
JAN 01, 2021
3490658
Glencore Canada Corporation
40
JAN 01, 2022
Roll Number: 5307-150-003-25100-0000
Address: Levack Mine Mill
Appeal
Assessed
Section
Tax Date
3242172
Vale Canada Limited
40
JAN 01, 2017
3314504
Vale Canada Limited
40
JAN 01, 2018
3367960
Vale Canada Limited
40
JAN 01, 2019
3411067
Vale Canada Limited
40
JAN 01, 2020
3449108
Vale Canada Limited
40
JAN 01, 2021
3490663
Vale Canada Limited
40
JAN 01, 2022
Roll Number: 5307-150-004-05400-0000
Address: Coleman Mine Road
Appeal
Assessed
Section
Tax Date
3242173
Vale Canada Limited
40
JAN 01, 2017
3314678
Vale Canada Limited
40
JAN 01, 2018
3367860
Vale Canada Limited
40
JAN 01, 2019
3411118
Vale Canada Limited
40
JAN 01, 2020
3506357
Vale Canada Limited
33
JAN 01, 2020
3449100
Vale Canada Limited
40
JAN 01, 2021
3506357
Vale Canada Limited
33
JAN 01, 2021
3490704
Vale Canada Limited
40
JAN 01, 2022
Roll Number: 5307-150-004-05600-0000
Address: Levack Con. 4 Lot 4 PCL 1613
Appeal
Assessed
Section
Tax Date
3241741
Xstrata Canada Corporation
40
JAN 01, 2017
3314712
Xstrata Canada Corporation
40
JAN 01, 2018
3367861
Xstrata Canada Corporation
40
JAN 01, 2019
3411030
Glencore Canada Corporation
40
JAN 01, 2020
3449056
Glencore Canada Corporation
40
JAN 01, 2021
3490671
Glencore Canada Corporation
40
JAN 01, 2022
Roll Number: 5307-210-015-03304-0000
Address: MacLennan Con 2 Lots 9 and
Appeal
Assessed
Section
Tax Date
3241742
Glencore Canada Corporation
40
JAN 01, 2017
3314615
Glencore Canada Corporation
40
JAN 01, 2018
3367917
Glencore Canada Corporation
40
JAN 01, 2019
3410994
Glencore Canada Corporation
40
JAN 01, 2020
3449032
Glencore Canada Corporation
40
JAN 01, 2021
3490638
Glencore Canada Corporation
40
JAN 01, 2022
3514186
Glencore Canada Corporation
40
JAN 01, 2023
3526503
Glencore Canada Corporation
40
JAN 01, 2024