Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 30, 2024

FILE NO.:

DM 185696

Assessed Person(s):

Greycan 8 Properties Inc.; 11035380 Canada Inc.

Appellant(s):

11035380 Canada Inc; Amazon

Respondent(s):

Municipal Property Assessment Corporation Region 19

Respondent(s):

City of Hamilton

Property Location(s):

110 Aeropark Boulevard

Municipality(ies):

City of Hamilton

Roll Number(s):

2518-902-310-16602-0000

Appeal Number(s):

3510097, 3510098, 3510112, 3510157, 3510158, 3510159, 3510626, 3513409, 3513420

Taxation Year(s):

2022 and 2023

Hearing Event No.:

783083

Legislative Authority:

Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

Parties

Counsel*/Representative

Greycan 8 Properties Inc; 11035380 Canada Inc

Submissions not received

Amazon

Peter Tam

Municipal Property Assessment Corporation

Curtis Nielsen

City of Hamilton

Patrick Kraemer*

REQUEST FOR:

An Order for Disclosure

HEARD:

January 5, 2024 in writing

ADJUDICATOR(S):

Carly Stringer, Member

MOTION DECISION

OVERVIEW

1The City of Hamilton (the “City”) is responding to appeals filed with the Assessment Review Board (the “Board”) by Amazon (“Amazon”), 11035380 Canada Inc., and Greycan 8 Properties Inc. The appeals were brought pursuant to ss. 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) and relate to the property assessments of 110 Aeropark Boulevard (the “Subject Property”) for the 2022 and 2023 taxation years.

2The Subject Property is improved with a distribution centre, of which Amazon is the tenant.

3The City has brought this motion seeking disclosure. Specifically, the City seeks the items listed at Appendix A to this decision (the “Disclosure Requests”).

4The Municipal Property Assessment Corporation (“MPAC”) is also responding to these appeals. MPAC supports the City’s motion.

5Amazon asks the Board to deny the City’s Disclosure Requests on the basis that the information is not relevant.

6Neither 11035380 Canada Inc. nor Greycan 8 Properties Inc. have provided submissions on this motion.

Result

7For the reasons that follow, the Board grants Disclosure Request Nos. 1 to 6 and 9 to 10. The Board denies Disclosure Request Nos. 7 and 8.

ANALYSIS

Applicable Law

8Rule 45 of the Board’s Rules of Practice and Procedure (“Rules”) requires that all parties provide a copy of “…all relevant documents in their possession, control, or power to all other parties in the proceeding, except for privileged documents….”

9In determining whether to order disclosure in accordance with Rule 45, the Board applies a two-part test. First, the Board considers whether the information sought is relevant to the issues in dispute. Second, the Board considers whether ordering disclosure is proportionate to the issues in dispute: see Metro Ontario Inc. v Municipal Property Assessment Corporation, Region 13, 2019 CanLII 47974 (ON ARB), supra at paragraph 11.

10The Board confirmed in Toyota Motor Manufacturing Canada Inc. v Municipal Property Assessment Corporation, 2020 CanLII 77938 (ON ARB) (“Toyota”) at paragraph 13 that “…the test for relevance really comes down to whether or not the production of documents requested relates to the issues in dispute. If so, they are relevant.”

11In consultation with stakeholder representatives, the Board has developed and issued a Guideline entitled Disclosure Requirements for General and Summary Proceedings (“Disclosure Guideline”). This Disclosure Guideline includes a Disclosure Schedule Appendix A and B (“Disclosure Schedule”) which sets out a non-exhaustive list of the types of disclosure that are generally accepted as relevant to the various issues that get raised in appeals before the Board.

12Relevance is not the only criteria that the Board will consider when determining whether a document should be disclosed. Rule 4 of the Board’s Rules provides “[t]hese 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.”

13Therefore, the requirement to disclose relevant documents must also be applied in a proportionate manner. As noted by the Board in Toyota, supra at paragraph 15, “[i]n making this determination it is necessary for the Board to consider the competing interests of non-disclosure and, excessive disclosure which may unreasonably increase the cost in a particular case and delay the final resolution of the matter on its merits”.

14Although the Rules do not include specific criteria to assess proportionality, the Board has previously applied the criteria enumerated in Rule 29.2.03(1) and (2) of Ontario’s Rules of Civil Procedure: Walmart Canada Corporation and Target Canada Corporation v Municipal Property Assessment Corporation, Region 01, 2018 CanLII 67789 (ON ARB) at paragraph 18. This is considered a non-exhaustive list and other criteria may be considered on a case-by-case basis.

15For each Disclosure Request made by the City, the Board will apply the above-noted test for relevance and proportionality.

Disclosure Request No. 1: Final Certificate in Construction: a certificate issued by the architect at the end of a construction contract to show the amount of the final payment due to the contractor and to certify that the works have been completed in accordance with the contract.

Submissions

16The City submits Disclosure Request No. 1 is relevant to issues raised in the City’s Statement of Response regarding actual construction costs. The City submits it has provided evidence from its expert that this information would allow him to determine the actual cost to construct the property, and use that information to inform a cost valuation using the Marshall and Swift cost valuation program. The City submits that no party has disputed the proportionality of this request, and the request satisfies the proportionality criteria outlined in Rules 29.2.03(1) and (2) of the Rules of Civil Procedure.

17Amazon submits that this information is outside the scope of the sole issue identified in its Statement of Issues, which is whether a racking system can be included as part of the assessed value for the Subject Property. Amazon argues that the City is essentially consolidating the issues raised by 11035380 Canada Inc. and Amazon. Amazon also submits that this information is outside the scope of the Disclosure Guideline which speaks to construction costs preceding the valuation date. Amazon submits that actual construction costs are of limited probative value given they occurred roughly six (6) years after the valuation date, citing 610 South Service Road Inc v Municipal Property Assessment Corporation Region 19, 2022 CanLII 122320 (ON ARB) (“610 South Service Road”) at paragraph 76.

Findings

18The Board finds that Disclosure Request No. 1 is relevant to the issues in dispute. The Board bases this finding on the pleadings: the City states in its Statement of Response that the actual cost to construct improvements at the Subject Property would present the most dependable indicator of cost as of the valuation date. The City also provided evidence from its expert explaining how this construction information would assist in his costing using the Marshall and Swift valuation service. The Board accepts this uncontradicted evidence.

19With respect to Amazon’s submission that actual construction costs are of limited probative value given that they occurred roughly six (6) years after the valuation date, this does not make Disclosure Request No. 1 irrelevant. First, the probative value of the documents requested would be weighed if Amazon had provided evidence or submissions relating to the proportionality of the Disclosure Request. Amazon did not. Second, relevance is given broad interpretation at the disclosure stage. Disclosure of a document is not an admission of relevance or admissibility for the purpose of a hearing: see Rule 46. Third, the Board does not accept that 610 South Service Road applies to preclude the City from disclosure of actual construction costs. 610 South Service Road was not a decision in relation to a disclosure request. Further, the decision does not state that actual construction costs are irrelevant, only that the current value analysis should include “… an objective analysis of the costs to construct the improvement, not a subjective analysis based solely on the actual costs incurred to construct the existing improvement.” (emphasis added): see 610 South Service Road at paragraph 75.

20The Board finds that the request is proportionate to the issues in dispute. This is a targeted request for a specific document. Amazon has not provided evidence that this request would result in an undue volume of documents, or that it is available from another source, or that requiring its disclosure would cause undue prejudice. Ultimately, there is insufficient evidence that Amazon would be required to expend disproportionately significant time and resources to locate and deliver Disclosure Request No. 1.

Disclosure Request No. 2: Final contract amount document by division and detailed division contract breakdowns.

Submissions

21The parties made the same submissions as Disclosure Request No. 1.

Findings

22The Board repeats and relies on its reasoning in relation to Disclosure Request No. 1, and finds that it applies equally to Disclosure Request No. 2.

Disclosure Request No. 3: Construction specifications document: A construction specification is a well-structured, detailed description of the quality, standards, workmanship, materials, and completion of work, which evolves across a project. Specifications are usually prepared by architects, engineers, designers and specifiers.

Submissions

23The parties made the same submissions as Disclosure Request No. 1.

Findings

24The Board repeats and relies on its reasoning in relation to Disclosure Request No. 1, and finds that it applies equally to Disclosure Request No. 3.

Disclosure Request No. 4: All hard costs, land, all soft costs, leasing commissions, and development fees, all of which are considered part of the total project construction costs.

Submissions

25The parties made the same submissions as Disclosure Request No. 1.

Findings

26The Board repeats and relies on its reasoning in relation to Disclosure Request No. 1, and finds that it applies equally to Disclosure Request No. 4.

Disclosure Request No. 5: Actual construction costs of the storage racking system.

Submissions

27The parties made the same submissions as Disclosure Request No. 1.

Findings

28The Board repeats and relies on its reasoning in relation to Disclosure Request No. 1 and finds that it applies equally to Disclosure Request No. 5 with the addition that the Board finds that Disclosure Request No. 5 is relevant in light of Amazon’s Statement of Issues which directly challenges MPAC’s assessment of the storage racking system.

Disclosure Request No. 6: Agreement of Purchase and Sale, along with any amendments associated with October 25, 2018 sale of the Subject Property. (Reg. Num. WE1317102).

Submissions

29The City submits that Disclosure Request No. 6 is relevant to land value component of the valuation. The City submits that the land value has been contested by 11035380 Canada Inc. and the City. The City submits that its Statement of Response states that the land value of the Subject Property can be established by using the sale of the Subject Property in October 2018, and therefore this information is relevant.

30This request is directed solely at 11035380 Canada Inc. and Greycan 8 Properties Inc. Neither party made submissions on this motion.

Findings

31The Board accepts the City’s uncontested submissions, and finds that Disclosure Request No. 6 is relevant and proportionate to the issues in dispute.

Disclosure Request No. 7: A list of all operating expenses.

Submissions

32The City submits that its Statement of Response confirms its intent to value the Subject Property using the income approach to value. The City submits this information is required for the income approach valuation methodology.

33This request is directed solely at 11035380 Canada Inc. and Greycan 8 Properties Inc. Neither party made submissions on this motion.

Findings

34The Board does not grant Disclosure Request No. 7. The City has not limited its request to information within a particular timeframe. The Board finds this request is overbroad and therefore not proportionate to the issues in dispute. It is not the Board’s responsibility to narrow an otherwise disproportionate request.

Disclosure Request No. 8: A summary of recoverable charges.

Submissions

35The City submits that its Statement of Response confirms its intent to value the Subject Property using the income approach to value. The City submits this information is required for the income approach valuation methodology.

36This request is directed solely at 11035380 Canada Inc. and Greycan 8 Properties Inc. Neither party made submissions on this motion.

Findings

37The Board does not grant Disclosure Request No. 8. The City has not limited its request to information within a particular timeframe. This Disclosure Request is overbroad and therefore not proportionate to the issues in dispute. It is not the Board’s responsibility to narrow an otherwise disproportionate request.

Disclosure Request No. 9: A copy of all leases signed after 2016 for any portion of the Subject Property, including the lease signed by Amazon.

Submissions

38The City submits that its Statement of Response confirms its intent to value the Subject Property using the income approach to value. The City submits this information is required for the income approach valuation methodology. In particular, the City states that its expert confirms that the lease will facilitate his ability to value the Subject Property using the income approach.

39This request is directed solely at 11035380 Canada Inc. and Greycan 8 Properties Inc. Neither party made submissions on this motion.

Findings

40The Board accepts the City’s uncontested submissions, and finds that Disclosure Request No. 9 is relevant and proportionate to the issues in dispute.

Disclosure Request No. 10: Photographs of the Subject Property taken at the October 4, 2023 inspection.

Submissions

41The City submits that the inspection provided critical information to its expert witness, and that photos will be used as evidence to aid the expert witness and the Board in determining the current value of the Subject Property.

42MPAC states that all parties received inspection photographs on November 13, 2023 from Amazon.

43Amazon submits that it has already consented to Disclosure Request No. 10, subject to the photographs being approved following an internal review and vetting process.

Findings

44The Board finds that photographs taken at the inspection on October 4, 2023 are relevant and their disclosure is proportionate to the issues in dispute. To the extent that Amazon has not otherwise provided the photographs to the City, the Board orders it to do so.

CONCLUSION

45The Board finds Disclosure Request Nos. 1 to 6 and 9 to 10 are relevant and proportionate to the issues in dispute.

46The Board denies Disclosure Request Nos. 7 and 8 on the basis that the City has not formulated a proportionate request.

ORDER

47The Board orders that the following items must be disclosed by the following parties, to the extent such information is in the party’s possession, power and control, to all other parties by no later than 15 days from the issuance date of this decision:

a. Disclosure Request Nos. 1 to 6 to be provided by Amazon, 11035380 Canada Inc. and Greycan 8 Properties Inc.

b. Disclosure Request No. 9 to be provided by 11035380 Canada Inc. and Greycan 8 Properties Inc.

c. Disclosure Request No. 10 to be provided by Amazon.

"Carly Stringer"

CARLY STRINGER

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb

Appendix A

REQUEST NO

DOCUMENT TITLE AND DESCRIPTION

ISSUE IN DISPUTE

DOCUMENT TO BE PROVIDED BY

Final Certificate in Construction: a certificate issued by the architect at the end of a construction contract to show the amount of the final payment due to the contractor and to certify that the works have been completed in accordance with the contract.

Current Value - Cost to Construct the Subject Property

11035380 Canada Inc., Greycan 8 Properties Inc., and/ or Amazon

Final contract amount document by division and detailed division contract breakdowns

Current Value - Cost to Construct the Subject Property

11035380 Canada Inc., Greycan 8 Properties Inc., and/ or Amazon

Construction specifications document: A construction specification is a well-structured, detailed description of the quality, standards, workmanship, materials, and completion of work, which evolves across a project. Specifications are usually prepared by architects, engineers, designers and specifiers.

Current Value - Cost to Construct the Subject Property

11035380 Canada Inc., Greycan 8 Properties Inc., and/ or Amazon

All hard costs, land, all soft costs, leasing commissions, and development fees, all of which are considered part of the total project construction costs.

Current Value - Cost to Construct the Subject Property

11035380 Canada Inc., Greycan 8 Properties Inc., and/ or Amazon

Actual construction costs of the storage racking system.

Current Value – Cost to Construct the Subject Property

11035380 Canada Inc., Greycan 8 Properties Inc., and/ or Amazon

Agreement of Purchase and Sale, along with any amendments associated with October 25, 2018 sale of the Subject Property. (Reg. Num. WE1317102)

Current Value – Development Cost – Subject Property Land Sale

11035380 Canada Inc. and/ or Greycan 8 Properties Inc.

A list of all operating expenses.

Current Value – Income Valuation

11035380 Canada Inc. and/ or Greycan 8 Properties Inc.

A summary of recoverable charges.

Current Value – Income Valuation

11035380 Canada Inc. and/ or Greycan 8 Properties Inc.

A copy of all leases signed after 2016 for any portion of the Subject Property, including the lease signed by Amazon.

Current Value – Income Valuation

11035380 Canada Inc. and/ or Greycan 8 Properties Inc.

Photographs of the Subject Property taken at the October 4, 2023 inspection.

Current Value – Current Physical Property Information

11035380 Canada Inc., Greycan 8 Properties Inc., and/ or Amazon