Canadian Leaseback (GP) Inc v. Municipal Property Assessment Corporation Region 03, 2024 CanLII 87540

Tribunals Ontario

Assessment Review Board

ISSUE DATE: September 13, 2024

FILE NO.: DM 186796

Assessed Person(s): Canadian Leaseback (GP) Inc

Appellant(s): Canadian Leaseback (GP) Inc

Respondent(s): Municipal Property Assessment Corporation Region 03

Respondent(s): City of Ottawa

Property Location(s): 90 Sparks Street

Municipality(ies): City of Ottawa

Roll Number(s): 0614-041-701-08600-0000

Appeal Number(s): 3508691, 3511680 and 3524697

Taxation Year(s): 2022, 2023 and 2024

Hearing Event No.: 784569

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

Parties	Counsel/Representative
Canadian Leaseback (GP) Inc	Paul Grosman
Municipal Property Assessment Corporation	Makael Nur
City of Ottawa	Angela Severson

REQUEST FOR: An order to dismiss the appeals based on issue estoppel

HEARD: August 2, 2024 in writing

ADJUDICATOR(S): Carly Stringer, Member

MOTION DECISION

OVERVIEW

1This Motion Decision relates to a request from the Municipal Property Assessment Corporation (“MPAC”) to dismiss Canadian Leaseback (GP) Inc.’s (the “Appellant”) appeals based on issue estoppel.

The Parties and the Appeals

2The Appellant has appealed the assessments of 90 Sparks Street (the “Subject Property”) in the City of Ottawa, pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act” or the “Assessment Act”), for the 2022 taxation year. Appeals were deemed for the 2023 and 2024 taxation years pursuant to s. 40(26) of the Assessment Act (together, the “2022 to 2024 Appeals”). The Subject Property is an office building owned by the Appellant.

3In the 2022 to 2024 Appeals, the Appellant argues that the value stated on each assessment is too high. Specifically, the Appellant argues that the value is inequitable compared to the assessments of similar properties in the vicinity.

4MPAC and the City of Ottawa (the “City”) are responding to the 2022 to 2024 Appeals. They disagree that the value is too high.

The Appellant Appealed the Assessments for 2017 to 2019

5The 2022 to 2024 Appeals are not the first assessment appeals in relation to the Subject Property.

6The Appellant previously filed an assessment appeal for the 2017 taxation year, arguing that the current value was too high. Appeals were deemed for the 2018 to 2019 taxation years pursuant to s. 40(26) of the Act (together, the “2017 to 2019 Appeals”). MPAC and the City were respondents to the 2017 to 2019 Appeals.

7The Appellant, MPAC and the City settled the 2017 to 2019 Appeals at $97,658,000 and executed Minutes of Settlement. The parties filed these Minutes of Settlement with the Board and requested that the Board issue decisions. On June 7, 2019, the Board issued decisions in relation to the 2017 to 2019 Appeals, reflecting a value of $97,658,000 in accordance with the amounts in the Minutes of Settlement (the “2017 to 2019 Decisions”).

The Appellant Appeals the Assessments for 2022 to 2024

8Pursuant to s. 36(1) of the Assessment Act, an annual assessment of the Subject Property was made for 2022. The current value on the 2022 assessment was $97,658,000, reflecting the value from the 2017 to 2019 Decisions.

9The Appellant appealed this 2022 assessment of $97,658,000, and, as noted above, appeals were deemed for 2023 and 2024. These appeals are the 2022 to 2024 Appeals that are the subject of this Motion Decision.

MPAC Brings a Motion for Issue Estoppel

10MPAC has brought this motion to dismiss the 2022 to 2024 Appeals based on issue estoppel and abuse of process. Namely, MPAC argues that the issue in dispute in the 2022 to 2024 Appeals is the current value of the Subject Property as of January 1, 2016, which was already decided in the 2017 to 2019 Decisions. MPAC argues that the Appellant should be estopped from relitigating this issue.

11The City supports MPAC’s request. The Appellant opposes it.

12This Motion Decision reflects the Board’s consideration of MPAC’s request.

Result

13For the reasons that follow, the Board grants MPAC’s motion and dismisses the 2022 to 2024 Appeals.

PRELIMINARY MATTERS

Request for an Administrative Suspension

Appellant’s Submissions

14The Appellant has requested that the Board administratively suspend the 2022 to 2024 Appeals pending the outcome of two matters: first, a leave to appeal application before the Court of Appeal for Ontario relating to the Divisional Court decision in Manulife Ontario Property Inc. v. MPAC and Ottawa (City), 2024 ONSC 1047 (“Manulife”); and second, a Request for Review of the Board’s decision in World Exchange Plaza Holding v Municipal Property Assessment Corporation Region 03, 2024 CanLII 47644 (ON ARB) (“World Exchange Plaza”).

Findings

15The Board denies the Appellant’s request, finding it is moot because the Court of Appeal for Ontario dismissed the motion for leave to appeal in Manulife on September 6, 2024 and the Request for Review of World Exchange has been withdrawn.

ISSUES

16The following issues will be addressed on this motion:

1. Are the preconditions to issue estoppel met in this case?

2. If the preconditions to issue estoppel are met, ought the Board apply issue estoppel, as a matter of discretion?

3. Does abuse of process apply and, if it does, ought the Board apply it?

Issue 1 - Are the preconditions to issue estoppel met in this case?

Applicable Law

17The Board has comprehensively outlined the law that applies to issue estoppel in many recent decisions: see for example ARI STC GP Inc. v Toronto (City), 2023 CanLII 116834 (ON ARB) at paragraphs 31 to 32 (“ARI STC”), leave to appeal to Divisional Court denied ARI STC GP INC. v. MPAC, 2024 ONSC 3663; Manulife Ontario Property Portfolio Inc. v Municipal Property Assessment Corporation, 2023 CanLII 39085 (ON ARB), 2023 CanLII 13877 (ON ARB) at paragraphs 13 to 14, upheld by Divisional Court in Manulife Ontario Property Inc. v. MPAC and Ottawa (City), 2024 ONSC 1047 at paragraphs 17 to 39 (“Manulife Divisional Court”), leave to appeal Manulife Divisional Court to the Court of Appeal for Ontario denied in Manulife Ontario Property Portfolio Inc. v. Municipal Property Assessment Corporation (6 September 2024), Court of Appeal File No. COA-24-OM-0071 (Ont. C.A.).

18The Board adopts and relies on that law in this Motion Decision.

19To summarize, the three criteria that must be met for issue estoppel to apply are:

1. The same question has been decided.

2. The decision said to create the estoppel was final; and

3. The parties to the decision were the same parties as those to the proceedings in which the estoppel is raised.

Evidence and Submissions of the Parties

20MPAC argues, and the City agrees, that the requirements for issue estoppel are met. They submit:

1. That the question in the 2022 to 2024 Appeals is the same question that was decided in the 2017 to 2019 Appeals, namely, what is the 2016 current value assessment for the Subject Property?;

2. That the 2017 to 2019 Decisions were final; and

3. That the parties to the 2017 to 2019 Appeals were the same as the 2022 to 2024 Appeals, namely Canadian Leaseback (GP) Inc., MPAC and the City of Ottawa.

21The Appellant has not provided submissions disputing that the 2017 to 2019 Decisions were final, and that the parties are the same. Rather, the Appellant focuses its argument on the first requirement for issue estoppel. The Appellant submits that the 2017 to 2019 Appeals had completely different issues than the 2022 to 2024 Appeals. The Appellant submits that the 2022 to 2024 Appeals raise a new and novel issue that was not at issue in the 2017 to 2019 Appeals – namely, the Assessment to Sale Ratio in relation to the equity of the assessment for the 2022 to 2024 taxation years.

Findings on Issue 1

22With respect to whether the same question has been decided, the Board does not accept the Appellant’s submissions that the 2022 to 2024 Appeals present a new and novel issue that was not raised in the 2017 to 2019 Appeals and decided in the 2017 to 2019 Decisions. First, the Board does not accept the Appellant’s characterization of the issue in the 2022 to 2024 Appeals – the Appellant has described the evidence it would seek to tender in the 2022 to 2024 Appeals, not the questions to be determined by the Board. Second, the Board finds that the question that was decided in the 2017 to 2019 Appeals was the current value assessment of the Subject Property as of January 1, 2016, which necessarily included a determination of the current value of the land and an adjustment to the assessment of the land for equity, in accordance with s. 44(3) of the Assessment Act: see Manulife Divisional Court at paragraphs 28 to 30. The Appellant clearly raised both of these issues in its Statement of Issues in the 2017 to 2019 Appeals, including the equity of the assessment at paragraph 5. Therefore, the Board finds that the first precondition to the application of issue estoppel is satisfied.

23The Board accepts MPAC’s undisputed submissions and evidence with respect to the remaining two requirements for issue estoppel. In this regard, the Board finds that the 2017 to 2019 Decisions were final, and that the parties to the 2017 to 2019 Appeals are the same as the 2022 to 2024 Appeals.

24Accordingly, the Board finds that the three preconditions to issue estoppel are met.

Issue 2 - If the preconditions to issue estoppel are met, ought the Board apply issue estoppel, as a matter of discretion?

Evidence and Submissions of the Parties

25The Appellant has not made specific submissions regarding the Board’s exercise of discretion, other than to state that applying the doctrine of issue estoppel would create an injustice in the present case. The Appellant has not particularized that injustice. The Appellant generally repeats and relies on arguments that have been made in other recent issue estoppel matters including Manulife and ARI STC:

1. that applying issue estoppel is contrary to a taxpayer’s annual right to appeal the assessment of its property; and

2. that the Board has not heard any evidence relating to the issues raised by the Appellant in the 2017 to 2019 Appeals, or the 2022 to 2024 Appeals.

26MPAC submits, and the City agrees, that there is no reason for the Board to decline to apply issue estoppel in this case. They submit that it should be applied, as there is no new evidence; no change in the law; no change in the Subject Property; and no other special circumstance that would override the public interest in the finality of litigation.

Findings on Issue 2

27Based on the evidence and submissions provided by the parties, the Board is satisfied that no injustice would result from applying issue estoppel in these circumstances. There is no evidence or suggestion that the previous proceeding was improper, unfair, or suffered any failure of natural justice. Conversely, there is a significant public interest in the finality of assessment to achieve a stable and reliable tax base; the finality of settlement agreements; and avoiding duplicative litigation. For these reasons, the Board concludes that it will apply issue estoppel to this case.

Issue 3 - Does abuse of process apply and, if it does, ought the Board apply it?

28Having decided to apply issue estoppel in this case, the Board will not consider the arguments relating to abuse of process.

CONCLUSION

29The Board finds that the three preconditions to issue estoppel are met, and exercises its discretion to apply issue estoppel in this case.

ORDER

30The Board orders that the 2022 to 2024 Appeals are dismissed.