City of Mississauga v. Municipal Property Assessment Corporation Region 15, 2024 CanLII 75921

Tribunals Ontario / Tribunaux décisionnels Ontario

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: August 06, 2024 FILE NO.: DM 186393

Assessed Person(s): Desjardins Financial Security Assurance Company Appellant(s): City of Mississauga Respondent(s): Municipal Property Assessment Corporation Region 15 Respondent(s): Desjardins Financial Security Assurance Company

Property Location(s): 6150-6200 Dixie Road Municipality(ies): City of Mississauga Roll Number(s): 2105-050-116-45440-0000 Appeal Number(s): 3511132 and 3525676 Taxation Year(s): 2023 and 2024 Hearing Event No.: 783706

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

Parties and Representatives

• Desjardins Financial Security Assurance Company: Submissions not received
• City of Mississauga: Simran Grewal
• Municipal Property Assessment Corporation: Lauren Mazzuchin

REQUEST FOR: An order dismissing the appeals due to issue estoppel or abuse of process HEARD: May 23, 2024 in writing ADJUDICATOR(S): Christopher Voutsinas, Vice-Chair; Anita Lovrich, Member

MOTION DECISION

OVERVIEW

1The City of Mississauga (the “City”) has appealed the assessment of 6150-6200 Dixie Road in the City of Mississauga (the “Subject Property”) for the 2023 taxation year before the Assessment Review Board (the “Board”) pursuant to s. 40 of the Assessment Act R.S.O. 1990, c. A.31 (the “Act”), on the basis that the classification of a portion of the Subject Property is incorrect. An appeal was deemed for the 2024 taxation year pursuant to s. 40(26) of the Act. The 2023 and 2024 appeals, together, are the “Current Appeal Proceeding”.

2The Subject Property, owned by Desjardins Financial Security Assurance Company (the “Owner”), is an industrial mall comprised of several rental units. As noted above, the classification of two units, 9 and 10 (the “Two Units”) is under appeal in the Current Appeal Proceeding.

3In 2017 the Owner appealed the Municipal Property Assessment Corporation’s (“MPAC's”) assessment of the Subject Property (the “Prior Appeal Proceeding”) on the basis that MPAC's assessed value was incorrect. In response to this appeal, MPAC took the position that the classification of some units, namely Units 107, 227, and 229, was incorrect.

4The Prior Appeal Proceeding was resolved on consent. In 2020, the Board issued decisions for the 2017 taxation year and subsequent deemed taxation years (the “Prior Decisions”).

5In the Current Appeal Proceeding the City argues that the classification of the Two Units is incorrect and should be changed to the Industrial class because the tenant that occupies these units uses this leased space to manufacture customized signs. The tenant commenced occupation of the Two Units before the Prior Appeal Proceeding was resolved in 2020 and continues to use the Two Units to manufacture signs for the taxation years currently under appeal.

6MPAC's position is that the classification of the Two Units has been determined by the Board in the Prior Appeal Proceeding, because a property’s current value assessment (“CVA”) incorporates current value, equity, and classification, and, for this reason, the City cannot raise this issue for redetermination in the Current Appeal Proceeding. For this reason, MPAC has brought this Motion asking the Board to dismiss the subject appeals on the basis of issue estoppel. MPAC argues, in the alternative, that relitigating the 2016 CVA absent a change to the Subject Property constitutes an abuse of process.

7In overview, issue estoppel applies where: (a) the same question being raised in the Current Appeal Proceeding has been decided in the Prior Appeal Proceeding; (b) the Board’s decision in the Prior Appeal Proceeding was final; and (c) the parties are the same in both Proceedings.

8In this Motion, the City does not dispute that the Prior Appeal Proceeding is a final decision, nor does the City dispute that the parties are the same in both the Prior Appeal Proceeding and Current Appeal Proceeding. However, the City maintains that the classification of the Two Units was not decided in the Prior Decisions, whereas MPAC submits that it was.

9In its pleadings in the Current Appeal Proceeding, the Owner also takes the position that the classification of the Subject Property was decided in the Prior Appeal Proceeding. However, the Owner made no submissions and takes no position with respect to MPAC’s Motion. However, in its Statement of Response the Owner takes the position that: (i) issue estoppel applies as the Appellant is attempting to re-litigate issues that have already been decided, and (ii) the correct classification of the units in question is Industrial-Full (IT).

10In its submissions the City also alleges a change in the reported square footage of the Two Units in the Subject Property. However, as this was not raised in the City’s pleadings in the Current Appeal Proceeding, the Board finds that it is not necessary to consider it in this Motion Decision. The Board notes the Two Units represent only 3% of the total square footage of the Subject Property.

Result

11For the reasons that follow, the Motion is dismissed.

ISSUES

12In its Motion, MPAC requests that:

1. the Board dismiss the Current Appeal Proceeding on the basis of issue estoppel or abuse of process;
2. the 2016 CVA be confirmed for the 2023 taxation year at the amount determined in the Prior Decisions;
3. the 2023 appeal be dismissed; and
4. the Schedule of Events (“SOE”) be suspended for the Current Appeal Proceeding for the Subject Property until 45 days after the Board issues its decision on MPAC’s request.

13MPAC's Motion raises the following issues:

1. Has the same issue been decided in the Prior Decisions?
2. If the requirements to establish issue estoppel are met, should the Board exercise its discretion to order that issue estoppel applies?
3. If issue estoppel does not apply, should the Board dismiss the Current Appeal Proceeding on the ground that it is an abuse of process?
4. Should the SOE be amended?

ANALYSIS

Issue 1 – Has the same issue been decided in the Prior Decisions?

Applicable Law

14The leading decision pertaining to the doctrine of issue estoppel is the decision of the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 SCR 460 (“Danyluk”) which outlines the three criteria which must be met in order for issue estoppel to apply:

i. the same question has been decided; ii. the decision said to create the estoppel was final; and iii. the parties to that decision were the same as the proceedings in which the estoppel is raised.

15The test with respect to the first part of the test regarding issue estoppel was enumerated by the Supreme Court of Canada, which stated that “[issue] estoppel extends to the material facts and the conclusions of law or of mixed fact and law (‘the questions’) that were necessarily (even if not explicitly) determined in the earlier proceedings”: Danyluk at paragraph 24. See also First Capital Holdings (Ontario) Corporation v Municipal Property Assessment Corporation, Region 09, 2022 CanLII 58354 (ON ARB) at paragraph 41.

16Issue estoppel encompasses “issues which, although not expressly raised in the previous case, are necessarily assumed in it or negatived by it” (emphasis added) (Allen v. Morrison, 2006 CanLII 7281 (ON SC) at paragraph 21, citing Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 2nd ed. (Toronto: Butterworths, 1999), at p. 1084-85.

17Administrative tribunals have the jurisdiction to apply the doctrine of issue estoppel and issue estoppel applies with equal effect to consent judgements (see Spadacini-Kelava v. Kelava, [2020] OJ No 5728 (QL), 2020 ONSC 7907 (“Spadacini-Kelava”).

18In paragraph 102 of Spadacini-Kelava the Court set out the scope of the principle of res judicata which was adopted into Canadian law by the Supreme Court in Grandview v. Doering, 1975 CanLII 16 (SCC), [1976] 2 S.C.R. 621):

The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

(as cited in Grandview v. Doering, at p. 634)

19In paragraph 103 of Spadacini-Kelava the Court went on to explain the distinction between res judicata and issue estoppel as set out by Laskin J.A., writing for the Court of Appeal for Ontario in Minott v. O'Shanter Development Company Ltd., 1999 CanLII 3686 (ON CA), 42 O.R. (3d) 321:

Issue estoppel prevents the relitigation of an issue that a court or tribunal has decided in a previous proceeding. In this sense issue estoppel forms part of the broader principle of res judicata. … Res judicata itself is a form of estoppel and embraces both cause of action estoppel and issue estoppel. Cause of action estoppel prevents a party from relitigating a claim that was decided or could have been raised in an earlier proceeding. … Issue estoppel is narrower than cause of action estoppel. It prevents a party from relitigating an issue already decided in an earlier proceeding, even if the causes of action in the two proceedings differ.

[Footnotes omitted]

Evidence of the Parties

20MPAC states that there has been no change to the Subject Property since the Prior Decisions.

21The City states that MPAC raised property classification as an issue in its pleadings in the Prior Appeal Proceeding, but only with respect to Units 107, 227, and 229, and neither party raised a classification issue with respect to the Two Units. The City submits that the classification of the Two Units was not determined in the Prior Appeal Proceeding.

22The City states that the parties did not inspect the Subject Property for the purpose of the Prior Appeal Proceeding due to the COVID-19 pandemic. The City provided evidence that on August 23, 2023, the Owner’s representative advised that an inspection of the Subject Property was not necessary as the tenant occupying the Two Units was manufacturing signs.

23MPAC did not dispute the fact that neither party raised a classification issue specifically with respect to the Two Units in the Prior Appeal Proceeding.

Submissions of the Parties

24MPAC submits that the same issue has been determined in the Prior Appeal Proceeding. Specifically, MPAC submits that the issue in the Current Appeal Proceeding, the 2016 CVA, which includes current value, equity, and classification of the Subject Property, was already decided by the Board in the Prior Decisions and that this satisfies the first requirement of issue estoppel.

25MPAC submits that issue estoppel applies to rights, questions or facts that were proved or admitted, or that could have been proved (emphasis added) or admitted in a prior proceeding, citing Spadacini-Kelava at paragraph 102. It argues that if a party fails to raise any point relevant to the issue in dispute, the party cannot later attempt to relitigate the issue.

26The City states that the classification of the Two Units was not determined in the Prior Appeal Proceeding. The City argues that there is a material change of facts in the Current Appeal Proceeding as the issue of property classification had not been previously raised with respect to the Two Units that are in question in the Current Appeal Proceeding. The City maintains that the Current Appeal Proceeding and the Prior Appeal Proceeding are differentiated by the fact that the Current Appeal Proceeding relates to a different portion of the Subject Property and that classification of the Two Units was not dealt with in the Prior Appeal Proceeding.

27The City argues that the Owner has admitted that the property classification for Units 9 and 10 should be changed to the Industrial class based on the use of the business on the premises. The City submits that the use is a factual issue, and it is uncontested that Units 9 and 10 are used for industrial purposes.

28In its Statement of Responses, MPAC submits that there is an industrial activity occurring at Unit 9 and that the same tenant has occupied said space since at least 2013. Further, MPAC states that its opinion on the classification may change pending an inspection of the Subject Property.

29The City argues that MPAC is attempting to use issue estoppel to uphold a factually incorrect classification, and an error that it created and has recreated on roll returns.

Findings on Issue 1

30The Board notes that although the City states that there has been a material change of facts in the Current Appeal Proceeding relative to the Prior Appeal Proceeding, there is no evidence before the Board that there has been a change in the use of the Two Units since the Prior Appeal Proceeding. The parties did not dispute that the Two Units were being used to manufacture signs prior to the resolution of the Prior Appeal Proceeding and this use has continued for the taxation years under appeal in the Current Appeal Proceeding.

31The specific question raised in this Motion is whether the use of the Two Units was “necessarily (even if not explicitly) determined in the earlier proceedings” as stated in Danyluk at paragraph 24.

32MPAC’s position is that it raised classification of some units in its Statement of Response and that a current value assessment incorporates current value, equity, and classification such that classification was necessarily dealt with in the Prior Appeal Proceeding.

33Regarding MPAC's submission, it is first important to note that, under the Act, the determination of current value and the determination of classification are separate and distinct determinations. As current value is determined based on a property appraisal, all factors considered in a property appraisal are necessarily, even if not explicitly, considered in determining current value. Equitable adjustment, pursuant to s. 44(3)(b) of the Act is also necessarily considered, as it is mandatory for the Board to consider whether an equitable adjustment is required when making a determination of current value.

34It is salient to note that s. 40(1) of the Act outlines various grounds for appeal to the Board and enumerates incorrect current value and incorrect classification as separate bases upon which an appeal can be based such that they may or may not be appealed separately.

35The Board also notes that since the Prior Appeal Proceeding was based on current value, pursuant to s. 40(1)(a), it is not clear on what legal basis MPAC could raise classification when responding to the appeal, as classification is a separate basis of appeal under s. 40(1)(d) and the Statement of Issues did not raise classification. Nonetheless, the parties in the Prior Appeal Proceeding proceeded to determine the classification of a small number of units.

36The Subject Property is an industrial mall where the boundaries are predetermined by the rental unit boundaries. Apportionment, therefore, is fixed. The classification for each unit is determined by the use(s) of the unit. The only issue that could be raised is the classification of each unit.

37In the Prior Appeal Proceeding, the Appellant’s Statement of Issues did not raise an issue respecting the classification of the Two Units. Although MPAC’s Statement of Response did raise an issue respecting classification respecting other units, it did not raise this issue in respect of the Two Units. Furthermore, there was no other evidence adduced to the contrary. Thus, MPAC did not raise an issue respecting the classification of the Two Units. As such, the Board finds that the determination of the classification of the Two Units was not in dispute and was not necessarily determined in the Prior Appeal Proceeding.

38The Board finds that MPAC’s argument that issue estoppel applies to rights, questions or facts that were proved or admitted, or that could have been proved or admitted in a prior proceeding, relates to the broader principle of res judicata. However, the issue in this Motion Decision is whether issue estoppel applies. The Board refers to the distinction between res judicata and issue estoppel, as set out in paragraphs 18 and 19. The fact that the Board determined the current value of the Subject Property and the classification of several units within the Subject Property does not mean that the specific issue of classification of each independent unit was necessarily or implicitly determined at the time. Accordingly, the Board finds that the same question was not decided in the Prior Appeal Proceeding.

39Since all three criteria for issue estoppel have not been met, issue estoppel cannot apply.

Issue 2 - If the preconditions of issue estoppel are met, should the Board exercise its discretion and decline to apply issue estoppel?

Findings on Issue 2

40Since the Board has found that issue estoppel has not been established, it is unnecessary for the Board to address this issue.

Issue 3 - If estoppel does not apply, should the Board dismiss the Current Appeal Proceeding on the grounds that it is an abuse of process?

Applicable Law

41Section 23(1) of the Statutory Powers Procedure Act provides broad powers to the Board to prevent an abuse of its process:

23(1) A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

42The Supreme Court of Canada recently confirmed that “[t]he doctrine of abuse of process is rooted in a court’s inherent and residual discretion to prevent abuse of its process” (citations omitted): Law Society of Saskatchewan v. Abrametz, 2022 SCC 29 (“Abrametz”) at paragraph 33.

43Abuse of process has been recognized as a broad concept that applies in a wide-range of contexts: Abrametz at paragraph 34; Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 [2003] 3 SCR 77, (“CUPE”) at paragraph 36. The doctrine is characterized by its flexibility. In Behn v. Moulton Contracting Ltd., 2013 SCC 26, [2013] 2 SCR 227 at paragraph 40, LeBel J. referred with approval to Goudge J.A., dissenting, in Canam Enterprises Inc. v. Coles (2000), 2000 CanLII 8514 (ON CA), 51 O.R. (3d) 481 (C.A.), rev’d 2002 SCC 63, [2022] 3 SCR. 307, where Goudge J.A. described at paragraph 55 that the doctrine of abuse of process:

engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel.

Submissions

44MPAC submits that the abuse of process doctrine has been applied in circumstances where allowing a hearing to proceed would violate such principles as judicial economy, consistency, finality, and the integrity of the administration of justice. It argues that the Prior Appeal Proceeding involves the same issue as the Current Appeal Proceeding, the same parties, and a final decision by the Board on the issue. It asserts that finality is a main policy goal of the abuse of process doctrine and its application to the Current Appeal Proceeding would promote this goal.

45The City did not make any submissions relating to abuse of process.

Findings on Issue 3

46MPAC did not provide evidence of unfairness or a failure of natural justice. It cannot be an abuse of process for a party to advance an issue that has not been previously determined by the Board. The application does not bring the integrity of the Board into disrepute.

47The Board finds no evidence of abuse of process in this case.

Issue 4 - Should the SOE be amended?

Findings on Issue 4

48The Schedule of Events should be amended, such that the due date for filing pleadings, all documents to be relied on at the hearing, and settlement conference briefs is six (6) weeks from the date this Motion Decision is issued.

CONCLUSION

49The Board finds that the first part of the test for issue estoppel is not met. As such, issue estoppel does not apply and MPAC’s Motion is dismissed.

ORDER

50The Board orders that the Motion be dismissed, and the Schedule of Events be amended, such that the due date for filing pleadings, all documents to be relied on at the hearing, and settlement conference briefs is six (6) weeks from the date this Motion Decision is issued.