Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 23, 2024

FILE NO.:

DM 186694

Assessed Person(s):

Columbia Sportswear Canada GP

Appellant(s):

Glen Corr Management Inc.

Respondent(s):

Municipal Property Assessment Corporation Region 23

Respondent(s):

City of London

Property Location(s):

1425 Max Brose Drive

Municipality(ies):

City of London

Roll Number(s):

3936-080-030-01905-0000

Appeal Number(s):

3517270, 3523497 and 3526386

Taxation Year(s):

2023 and 2024

Hearing Event No.:

783711

Legislative Authority:

Sections 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

Parties

Representative

Glen Corr Management Inc.; Columbia Sportswear Canada GP

Drew Samuels

Municipal Property Assessment Corporation

Michael Radan

City of London

Submissions not received

REQUEST FOR:

Dismissal of Appeal(s)

HEARD:

June 25, 2024 in writing

ADJUDICATOR(S):

Anita Lovrich, Member Dirk VanderBent, Vice-Chair

MOTION DECISION

OVERVIEW

1Glen Corr Management Inc. (the “Appellant”) filed an appeal pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) respecting the property located at 1425 Max Brose Drive in the City of London (the “Subject Property”) for the 2023 taxation year (the “Current Appeal Proceeding”). Glen Corr Management Inc. is a property manager acting on behalf of the property owner Columbia Sportswear Canada GP Limited (the “Owner”). Pursuant to the deeming provision under s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal for the 2024 taxation year.

2The basis for this appeal is that the current value of the Subject Property assessed by the Municipal Property Assessment Corporation (“MPAC”), is too high, and, therefore, is incorrect.

3The Subject Property has been the subject of a prior appeal for the 2019 taxation year (the “Prior Appeal Proceeding”) on the basis that MPAC's assessed value was incorrect. The Prior Appeal Proceeding was resolved in 2020 by agreement of the parties. At their request, the Assessment Review Board (the “Board”) issued decisions for the 2019 taxation year and subsequent deemed taxation years based on Minutes of Settlement that were filed with the Board. The agreed total current value was $28,126,000. In arriving at this quantum, it is not disputed that it includes a 15 per cent discount because some of the units were in an unfinished state, described as an Unfinished Allowance.

4For the 2023 taxation year, MPAC reassessed the current value of the Subject Property pursuant to s. 32 of the Act, increasing this value from the Prior Appeal Proceeding settlement value of $28,126,000 to $31,290,000. MPAC asserts that it has the authority to reassess the Subject Property, because there has been an improvement made to the Subject Property which was completed in accordance with a building permit issued in 2021 (the “Building Permit”). The improvement included the construction of a demising wall (i.e. a wall constructed between Units 7 and 8 of the Subject Property) (“Demising Wall”), a new washroom, mechanical upgrades and a retail store.

5The Appellant opposes the increase in assessed value, and has brought a motion (“Estoppel Motion”) requesting that:

1. The Board issue an order that MPAC be estopped from making market assessment changes that contradict the settlement in February 2020 and limiting it to only making valuation changes that are physical in nature;

2. As necessary, re-setting the procedural dates for the conduct of the Current Appeal Proceeding.

6MPAC opposes this Estoppel Motion, arguing that the Subject Property’s value can be reassessed as there has been a change in the state and condition of the Subject Property.

7The City of London has not made submissions in this Estoppel Motion.

8The purpose of this Decision is to adjudicate this Estoppel Motion.

Further Background

9In order to fully understand the issues raised in the Estoppel Motion, it is necessary to provide some additional background information.

10In response to a question from the Board, MPAC has indicated the increase in current value is attributable to three individual matters in dispute:

1. Construction of the Demising Wall, where MPAC states that the cost of construction associated with the Building Permit is $450,000;

2. Discontinuance of the deduction for the Unfinished Allowance – the total amount of this Allowance being $3,218,040; and

3. Correction to reflect an increase in the Subject Property’s Gross Leasable Area (“GLA”) as compared to the GLA determined in the Prior Appeal Proceeding, resulting in an increase in value of $3,163,000.

11While the Appellant agrees that the current value of the Subject Property can be reassessed as a result of any improvements made to the Subject Property that increase its value, which includes the Demising Wall, the Appellant submits that:

1. There has been no change in the unfinished state of the Subject Property, and, therefore, the deduction for the Unfinished Allowance should continue to apply; and

2. The parties addressed the size of the GLA in the Prior Appeal Proceeding, and, for this reason, MPAC should be estopped from raising the issue of GLA in the Current Appeal Proceeding.

12There is some confusion regarding the nature of the Unfinished Allowance. In support of its Estoppel Motion, the Appellant filed affidavit evidence which includes MPAC's Statement of Response (“SOR”) filed in the Current Appeal Proceeding. Paragraph 11(a) MPAC's SOR states in part:

. . . MPAC also reviewed the most recent Property Income and Expense Report submitted in 2021, which stated all units are occupied. As a result, MPAC removed the -15% unfinished allowance as the units were not longer vacant. This physical change to the Subject Property’s state and condition warranted the removal of the adjustment. . . .

Regarding the Unfinished Area, the Appellant’s affidavit evidence filed in support of its Estoppel Motion states at paragraph 18:

The -15% unfinished allowance applied to the Subject Property should remain. This area has not undergone any changes and the quality of the finished area had not changed. As the adjustment is for the lack of finishes and this fact remains, the adjustment is still warranted as agreed by the parties.

Therefore, there appears to be a dispute whether the 15 per cent deduction is based on the unfinished condition of the Subject Property, or tenant vacancy.

13Turning to the Appellant’s issue estoppel request, issue estoppel applies where: (1) the same question being raised in the Current Appeal Proceeding has been decided in the Prior Appeal Proceeding; (2) the Board’s decision in the Prior Appeal Proceeding was final; and (3) the parties are the same in both Proceedings.

14Regarding the third requirement, MPAC points out that the appellants in these two appeal proceedings are not the same. It is not disputed that, in the Prior Appeal Proceeding, the appellant was COLUMBIA SPORTSWEAR CANADA GP LIMITED c/o ICORR PROPERTIES INTERNATIONAL, whereas, in the Current Appeal Proceeding, the Appellant is Glen Corr Management Inc. Therefore, MPAC argues that issue estoppel cannot apply. In response, the Appellant points out that Glen Corr Management Inc. is the Owner’s property management firm.

RESULT

15The Board will not adjudicate the Appellant’s Estoppel Motion. Instead, the Board directs that all disputes regarding the application of issue estoppel be addressed at the main hearing of the Current Appeal Proceeding, if the appeals are not otherwise resolved by the parties.

ISSUES

16Despite the specific disputes raised in this Estoppel Motion, the determinative issue is: Should the Board adjudicate the Appellant’s Estoppel Motion?

17While the Board has reviewed all the parties’ submissions in detail, for the purposes of this Estoppel Motion, the Board provides a synopsis of only the most salient submissions.

ANALYSIS

Ambiguities in the evidence adduced in this Estoppel Motion

18As noted above, it is not disputed that there have been some improvements to the Subject Property. However, the evidence regarding these improvements is sparse. MPAC refers to the Building Permit, stating only that it was completed. There is no evidence to indicate when it was completed, or precisely what improvements were made, and where they were made. The Board, as an administrative tribunal with specialized expertise, can take notice that an application for a building permit typically contains only estimates of the value of the construction. Furthermore, issuance of a building permit to the Owner does not necessarily indicate that the Owner proceeded with all the construction shown in the permit, or that the actual costs of construction are the same as estimated costs shown the building permit application. In this case, neither party chose to provide any evidence regard the specific construction undertaken, or the actual costs of construction.

19This has resulted in the following ambiguities:

1. There is reference to mechanical upgrades and the addition of a washroom, but there is no indication as to where these upgrades were made, leaving open the question of whether these improvements, if they did occur, could be relevant to the Unfinished Allowance issue.

2. The Appellant asserts that the construction of the Demising Wall does not add any value to an income producing property, whereas MPAC claims that it has increased current value by $450,000.

3. There is a suggestion that a retail store has been constructed, but there is no indication as to whether this could change the Subject Property’s GLA.

4. There is no clarification of how the rental of previously vacant units would result in a physical change to the Subject Property, and, if so, whether the change would justify revocation of the Unfinished Allowance.

Separate Assessments

20MPAC has stated that it issued its assessment pursuant to s. 32 of the Act, which provides that MPAC may make a correction in the assessment roll (in this case for the 2023 taxation year). MPAC further acknowledges that the valuation day for the assessment is January 1, 2016. However, MPAC does not address the fact that the Property’s Current Value for the General Reassessment was finally determined by the Board Decisions issued in the Prior Appeal Proceeding. However, in its submissions, MPAC confirms that its assessment for the 2023 taxation year is based on the improvements referenced in the Building Permit, and, therefore, MPAC's has the authority to issue its assessment pursuant to s. 34(1)(a) of the Act, which states:

Supplementary assessments to be added to tax roll

34 (1) If, after notices of assessment have been given under section 31 and before the last day of the taxation year for which taxes are levied on the assessment referred to in the notices,

(a) an increase in value occurs which results from the erection, alteration, enlargement or improvement of any building, structure, machinery, equipment or fixture or any portion thereof that commences to be used for any purpose;

21The parties did not dispute that a s. 34 supplementary assessment is a new assessment that is distinct from the General Reassessment, and that the valuation day for determining the increase in current value due to the improvements is the date the improvements commenced to be used (see General Motors of Canada Company v Municipal Property Assessment Corporation Region 23, 2024 CanLII 55068 (ON ARB) (“General Motors”), paragraphs 42 to 64).

22However, MPAC points out that, on the facts, in General Motors, a supplementary assessment had been made, based on a property appraisal of the increase in value. MPAC submits that, in this case, there has been no such appraisal of value. Therefore, MPAC submits that the Board cannot determine whether there has been an increase in the current value as a result of the improvements made to the Subject Property. However, the Board observes that this submission does not align with the fact that MPAC has confirmed values for the improvements, as described above.

23Because the valuation day for determining current value in the Current Appeal Proceeding is not the same as the valuation day for the Prior Appeal Proceeding, the Appellant does not advance a claim for estoppel in respect of any improvements to the Subject Property. However, as noted above, there is some ambiguity as to whether any of the improvements could result in a change to the GLA or Unfinished Allowance as previously determined in the Prior Proceeding Appeal Proceeding.

The scope of the doctrine of Issue Estoppel and whether it applies in these circumstances

24The Board begins by citing the leading decision on issue estoppel issued by the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 SCR 460, more specifically, paragraphs 18, 20 and 24 which states:

18 The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. . . . An issue, once decided, should not generally be re-litigated to the benefit of the losing party and the harassment of the winner. A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided.

20 The law has developed a number of techniques to prevent abuse of the decision-making process. One of the oldest is the doctrine estoppel per rem judicatem with its roots in Roman law, the idea that a dispute once judged with finality is not subject to relitigation. . . The bar extends both to the cause of action thus adjudicated (variously referred to as claim or cause of action or action estoppel), as well as precluding relitigation of the constituent issues or material facts necessarily embraced therein (usually called issue estoppel . . .

24 Issue estoppel was more particularly defined by Middleton J.A. of the Ontario Court of Appeal in McIntosh v. Parent, 1924 CanLII 401 (ON SCAD), [1924] 4 D.L.R. 420, at p. 422:

When a question is litigated, the judgment of the Court is a final determination as between the parties and their privies. Any right, question, or fact distinctly put in issue and directly determined by a Court of competent jurisdiction as a ground of recovery, or as an answer to a claim set up, cannot be re-tried in a subsequent suit between the same parties or their privies, though for a different cause of action. The right, question, or fact, once determined, must, as between them, be taken to be conclusively established so long as the judgment remains. [Emphasis added.]

25In the context of the appeal proceeding before the Board, it is important to observe that the Act authorizes MPAC, as the assessment corporation, to conduct property appraisals and issue assessments which impose the legal obligation to pay municipal taxes. If a property owner or any other person disagrees with MPAC’s assessment, they may appeal MPAC’s assessment. Here, it is the Appellant who is raising the issues in the Current Appeal Proceeding. MPAC is simply responding to the issues raised by the Appellant. MPAC has not sought to request to higher assessment wherein it raises its own issues. Thus, the Appellant needs to proceed with its issues in order to challenge MPAC’s assessed current value. MPAC, in turn, is free to provide its response to those issues. Issue estoppel may apply to MPAC’s response to the Appellant’s issues, but only in the sense that the Appellant, in reply, may argue that a “right, question, or fact” has been determined in the Prior Appeal Proceeding.

Should the Board proceed with the Appellant’s Estoppel Motion at this interim stage in the Current Appeal Proceeding

26The above analysis leads to the question whether the Board should proceed to adjudicate the Appellant’s Estoppel Motion prior to the main hearing. Typically, such motions are addressed at the main hearing. Recently the Board has adjudicated issue estoppel motions at the interim stage of the appeal proceeding, but in circumstances that are different from the circumstances in this case.

27There have been a number of motions where a responding party has requested dismissal of an appeal proceeding based on issue estoppel. In each cases, the determination of the motion turned on the same jurisdictional issue, and would be dispositive of whether there would be any issue that could proceed to a hearing. If there were no issue to proceed to hearing, then there would be no point in the parties preparing for a hearing that would not proceed. (for example, see ARI STC GP INC. v. MPAC, 2024 ONSC 3663 ). Thus, the most efficient approach was to adjudicate the estoppel issue prior to the main hearing.

28In this case, a hearing is required to address the issues respecting the s. 34 Supplementary Assessment. Furthermore, as the Board has already observed, there is ambiguity in the evidence adduced in this Estoppel Motion, such that the Board is not satisfied that it can accurately and fairly adjudicate this Estoppel Motion at this interim stage in the proceeding.

29In further support of this conclusion, the Board refers to the dispute as to whether the parties are the same in both appeal proceedings. As noted above, issue estoppel applies not only to a party, but also to its privies. The only evidence adduced by the Appellant on this issue is that Glen Corr Management Inc. is a property manager acting for the Owner. However, neither party has provided evidence or submissions to indicate whether Glen Corr Management Inc. qualifies as a privy, or, alternatively, that the nature of its contractual relationship with the Owner is such that Glen Corr Management Inc. has filed the appeal as a representative on behalf of the Owner. Consequently, the Board, again, is not satisfied that it has sufficient evidence to accurately and fairly adjudicate this aspect of the Appellant’s Estoppel Motion.

30For these reasons, the Board will not adjudicate the Appellant’s Estoppel Motion. Instead, the Board directs that all disputes regarding the application of issue estoppel be addressed at the main hearing of the Current Appeal Proceeding.

ORDER

31The Board orders that:

1. The Board will not adjudicate the Appellant’s Estoppel Motion. Instead, the Board directs that all disputes regarding the application of issue estoppel be addressed at the main hearing of the Current Appeal Proceeding, if the appeals are not otherwise resolved by the parties.

2. The Schedule of Events for the Current Appeal Proceeding will resume. The next unexpired due date will be amended to a date within three weeks of the date this Estoppel Motion Decision is issued, and all other subsequent due dates shall be adjusted accordingly.