Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
March 28, 2025
FILE NO.:
DM 187696A
AMENDED MOTION DECISION ISSUED: April 7, 2025
Assessed Person(s):
Courthouse Hospitality Inc.
Appellant(s):
Courthouse Hospitality Inc.
Respondent(s):
Municipal Property Assessment Corporation Region 32
Respondent(s):
City of Thunder Bay
Property Location(s):
277 Camelot Street
Municipality(ies):
City of Thunder Bay
Roll Number(s):
5804-010-001-15800-0000
Appeal Number(s):
3524297
Taxation Year(s):
2024
Hearing Event No.:
786491
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
Parties
Counsel/Representative
Courthouse Hospitality Inc.
Damian Bernacik Robert Brazzell
Municipal Property Assessment Corporation
Frank Shea Sarah Moll
City of Thunder Bay
Submissions not received
REQUEST FOR:
An Order for Disclosure
HEARD:
March 20, 2025 in writing
ADJUDICATOR(S):
Christopher Voutsinas, Vice-Chair
AMENDED MOTION DECISION
AMENDED MOTION DECISION
In accordance with Rule 99 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1 2021, related to the correction of minor errors and in accordance with section 21.1 of the Statutory Powers and Procedure Act regarding the correction of errors, this Amended Motion Decision is issued to correct error(s) in the Motion Decision regarding the addition of Sarah Moll as representative for the Municipal Property Assessment Corporation on page 1. The amendments have been underlined for ease of reference. There are no other changes in this Amended Motion Decision.
OVERVIEW
1The Municipal Property Assessment Corporation (“MPAC”) is responding to an appeal filed with the Assessment Review Board (the “Board”) by Courthouse Hospitality Inc. (“Courthouse”). The appeal was brought pursuant to s.40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) and relate to the property assessment of 277 Camelot Street (the “Subject Property”) in the City of Thunder Bay (“City”) for the 2024 taxation year.
2The Subject Property is a 40-room limited-service hotel known as the Courthouse Hotel. The property was purchased from the Crown in 2017 as a court house and renovated to a hotel. The hotel opened in 2019.
3MPAC has brought this motion seeking disclosure. Specifically, MPAC seeks the items listed at Appendix A to this decision (the “Disclosure Request(s)”).
4Courthouse opposes the motion and seeks to have the Board deny MPAC’s Disclosure Requests.
5The City did not provide submissions on this motion to the Board.
Result
6For the reasons that follow, the Board grants MPAC’s Disclosure Request Nos. 1 and 4. The Board denies Disclosure Request Nos. 2 and 3.
ANALYSIS
Applicable Law
7Rule 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….”.
8In 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.
9The 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.”
10In 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.
11In addition, the Board considers Rule 4 of the Board’s Rules which provides that “[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.”
12Therefore, the requirement to disclose relevant documents must also be applied in a proportionate manner. As noted by the Board in Toyota 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”.
13Although 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; see 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.
14For each Disclosure Request made by MPAC, the Board will apply the above-noted tests for relevance and proportionality.
15MPAC submits that its Disclosure Requests are standard documents regularly reviewed by experts in determining the current value of a hotel property, and necessary to develop a reasonable and accurate pro forma for the Subject Property.
16The Appellant submits that Disclosure Request Nos. 1, 2, and 4 should be denied as MPAC has not established that the requested disclosure satisfies the criteria of relevance and proportionality, and Disclosure Request 4 was not properly brought before the Board. In addition, the Appellant submits that Disclosure Request No. 3 should be denied as these are not in the Appellant's power, possession, or control.
MPAC Submission on Proportionality
17MPAC argues that its Disclosure Requests meet the following criteria in connection with proportionality:
(i) the time to satisfy the disclosure request is reasonable,
(ii) the expense is justified,
(iii) there is no prejudice to the Appellant in disclosing the requested disclosure,
(iv) the information is not readily available to MPAC, and
(v) the document request is not excessive.
18The Board will address relevance (in the case of MPAC, see proportionality above) and relevance and proportionality (in the case of the Appellant) for each of the Disclosure Requests in turn.
Disclosure Request No. 1: Financial Information - From the opening of the hotel (2019) to present, a copy of the full financial statements for the operation of the subject property, including the balance sheet, income statement, statement of cash flows, changes in equity, and notes to the financial statements.
MPAC Submissions on Relevance
19MPAC submits that Disclosure Request No. 1 is relevant to the issues raised by the Appellant in the Subject Appeal.
20MPAC argues that as the Subject Property was renovated and started operating as a hotel in 2019 and that financial records specific to the statutory valuation date of January 1, 2016 are unavailable, and in their absence financial data from 2019 to the present are a reliable alternative. Further, MPAC argues that the heritage status of the Subject Property may impact operating expenses and that understanding the nature and character of the Subject Property will allow MPAC to consider inferior, superior and similar properties for valuation comparison purposes.
Appellant Submissions
Relevance
21The Appellant submits that Disclosure Request No. 1 lacks relevance as the dates are far removed from the statutory valuation date of January 1, 2016, and refers to time periods having very different circumstances to those of January 1, 2016 (e.g., pandemic lockdown, high-inflation, post-pandemic economic conditions, current market).
22The Appellant further submits that the financial documents requested are not relevant to the issue of equity which requires reference to the assessments of similar lands (i.e. 2016 assessments).
23The Appellant asserts that financial information becomes increasingly less relevant the further it is from the valuation date and that financial data beyond four or five years from the valuation date is presumptively irrelevant.
Proportionality
24The Appellant submits that Disclosure Request No. 1 is overly broad in seeking detailed financial information, totaling 35 financial records, and extending well into 2025 and fulfilling of this request would cost the Appellant a substantial amount of time and expense.
Finding
25The Board finds that Disclosure Request No. 1 is relevant and proportionate to the issues in dispute. Financial statements related to the operation of the Subject Property as a hotel are by their nature fundamental in determining the current value of the Subject Property. Under the circumstances, the length of time lapsed from the statutory valuation date does not make Disclosure Request No. 1 irrelevant.
26Further, 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.
27The Board does not accept the Appellant’s arguments concerning the timeframe of the request, the lapse of time from the statutory valuation date, and the varied market and economic circumstance over that timeframe relative to the circumstances at the statutory valuation date. While the Board agrees that the farther removed from the statutory valuation date, the less reliable the data - the circumstances herein are atypical. In particular, the renovation and conversion, and timing thereof, of the Subject Property into an entirely new use (2019/2020), the extraordinary occurrence of the COVID-19 pandemic and associated impact on market conditions, the time to recovery from the COVID-19 pandemic, and the heritage status of the Subject Property. In this atypical context, an extended timeframe is deemed relevant by the Board.
28Further, in terms of the extended timeframe, the Board leaves the weighting of the evidence and associated time adjustments and other considerations, if any, to the discretion of the adjudicator at a hearing.
29As it relates to proportionality and the number of documents requested, the Board notes as submitted by MPAC that financial statements typically include a balance sheet, income statement, statement of cash flows, changes in equity, and notes to the financial statements.
30As a result, the Board grants MPAC’s Disclosure Request No. 1.
Disclosure Request No. 2: All documents relating to the Subject Property’s sale/share transfer of May 2022, as noted in the Colliers Canada Hotel Report for $6,000,000 (Sale Details)
MPAC Submissions on Relevance
31MPAC submits that this information is relevant to the issues raised by the Appellant in the Subject Appeal.
32MPAC submits that the Subject Property was sold as a courthouse in June 2017 for $500,000 and that it sold again as a hotel in May 2022 for $6,000,000 per Colliers Hotel INNvestment Report (Q2 2022). MPAC states that it confirmed with the owner and developer of the Courthouse Hotel that he sold his interest in May 2022 but that he declined to confirm the price. MPAC confirmed the price with a Senior Director at Colliers Canada.
33MPAC takes the position that while the $6,000,000 transaction took place six years after the valuation date, it is still relevant as the Subject Property did not exist at the time of the valuation date, and that the sale reflects the property in its current state and condition as a hotel.
Appellant Submissions
Relevance
34The Appellant submits that there was no transfer of the Subject Property in 2022 rather a corporate share transfer and amalgamation occurred involving elements beyond just the Subject Property. It asserts that a share transfer does not involve the transfer of real estate, and that the transaction price does not reflect the value of the real estate as a share sale is influenced by a number of items that do not reflect fair market value.
35Further, the Appellant submits that the transaction took place nearly six and a half years after the valuation date and as such the requested information is not relevant to the valuation of the Subject Property as of January 1, 2016.
Proportionality
36The Appellant submits that MPAC did not request specific documents relating to the May 2022 share transaction or the amalgamation. MPAC’s request is overly broad seeking “all documents relating to the” share transaction which is not time specific in terms of a date range, is ambiguous, and may include privileged and confidential documents.
Finding
37The Board finds that this request lacks relevance in that it does not sufficiently establish nor distinguish the differences between a property sale and a share sale and related documents. Further, the request is overbroad, lacks specificity in terms of the documents requested, and is not limited to a particular timeframe – therefore, it is not proportionate to the issues in dispute.
38The Board does not grant MPAC’s Disclosure Request No. 2.
Disclosure Request No. 3: For the years 2017 to 2020, a detailed breakdown including the costs of all renovations, additions, or other modification made to the Subject Property (Capital Expenditure Report)
MPAC Submissions on Relevance
39MPAC submits that the Capital Expenditure Report is relevant to the issue of the correct current value of the Subject Property.
40MPAC submits that the City’s website states that the owner at the time of renovations between 2017-2019 invested $5,000,000 to renovate the Subject Property from a courthouse to a hotel.
41MPAC asserts that it is unlikely that a prudent business owner would invest $5,000,000 into the Subject Property if its current value assessment is $609,000 as suggested in the Appellant’s statement of issues.
42The Capital Expenditure Report is required to review the investment made in the Subject Property to renovate it from a courthouse to a hotel.
Appellant Submissions on Relevance and Proportionality
43The Appellant submits that the requested documents are not in their power, possession or control and provides affidavit evidence of the same.
Finding
44In the disposition dated January 22, 2025 to the EBDF relating to disclosure submitted by MPAC, the Board directed the Appellant to produce evidence in support of its assertion that the requested information is publicly available to MPAC. The Appellant did not do so.
45The Board finds that the requested documents are relevant to the issues in dispute and specifically, the correct current value. However, the Board accepts the Appellant’s affidavit evidence that the requested documents are not in the power, possession or control of the Appellant.
46The Board does not grant MPAC’s Disclosure Request No. 3.
47Given that the Board finds Disclosure Request No.3 relevant, the Appellant is reminded of its ongoing obligation (see Board’s Rule 45) to make disclosure of capital expenditure reports and related information should the documents come into the Appellant’s power, possession or control. Further, the Appellant is directed to guide MPAC to publicly available sources of the requested information, should they exist.
Disclosure Request No. 4: For 2017 to present, Franchise, Management or Licensing Agreement (Franchise, Management or Licensing Agreement)
MPAC Submissions on Relevance
48MPAC takes the position that this information is relevant to the issue of the correct current value of the Subject Property.
49MPAC submits that for valuation purposes the franchise fee (reflected in the Franchise Agreement) is an undistributed expense in a hotel valuation pro forma, and that the Franchise Agreement may also include a contracted reserve for replacement which is an income parameter within a hotel valuation pro forma, and that these items vary by hotel brand.
50Further, MPAC submits that its Disclosure Requests are proportionate to the importance and complexity of the issues in this proceeding and with a view to resolving the Subject Appeals within the assessment cycle. MPAC takes the position that as the hotel did not exist on the January 1, 2016 valuation date that information available after that date is proportionate.
Appellant Submissions
Relevance
51The Appellant submits that Disclosure Request No. 4 was not included in MPAC’s Expedited Board Directions Form (“EBDF”) filed with the Board. The Board issued a decision setting down Disclosure Request Nos. 1 to 3 to this motion.
52The Appellant asserts that Franchise Agreements from 2017, 2018, and 2019 “would have some relevance” but considers agreements signed five years or more from the valuation date to not be relevant.
Proportionality
53The Appellant takes the view that a request for agreements extending more than nine years out from the valuation date is not proportionate.
Finding
54The Board finds that Disclosure Request No. 4 is relevant to the issue of current value. While a request spanning up to nine years beyond the statutory valuation date is atypical, the specific circumstances herein are also atypical, i.e. the renovation and conversion, and timing thereof, of the Subject Property into an entirely new use (2019/2020), the extraordinary occurrence of the COVID-19 pandemic and associated impact on hotel market conditions, the time to recovery from the COVID-19 pandemic, and the heritage status of the Subject Property.
55While Disclosure Request No. 4 may not have been included in MPAC’s EBDF for disclosure, the Board’s determination at that time did not specifically restrict or preclude a further request nor this request in particular. The Board notes its finding that Disclosure Request No. 4 is relevant and the Board’s Rule 45 regarding the disclosure of “all relevant documents”.
56The Board also finds that the request is proportionate to the issues in dispute. This is a targeted request for a specific document. The Appellant has not established that this request would result in an undue volume of documents, that providing the document would require significant time and resources, that it is available from another source, or that requiring its disclosure would cause undue prejudice.
57Further, in terms of the extended timeframe, the Board leaves the weighting of the evidence and associated time adjustments and other considerations, if any, to the discretion of the adjudicator at a hearing.
58As a result, the Board grants MPAC’s Disclosure Request No. 4.
CONCLUSION
59The Board finds Disclosure Request Nos. 1 and 4 are relevant and proportionate to the issues in dispute.
60The Board denies Disclosure Request No. 2 as it lacks relevance and MPAC has not made a proportionate request.
61The Board denies Disclosure Request No. 3 as it is not in the power, possession, or control of the Appellant.
ORDER
62The Board orders that Disclosure Request No. 1 and Disclosure Request No. 4 must be disclosed by the Appellant to MPAC no later than 30 days from the issuance date of this decision.
63Further MPAC, in their motion, requested and the Board hereby orders the extension of the time in the Schedule of Events for the service of MPAC’s Statement of Response to a date 60 days after MPAC receives the documents ordered to be produced, with all subsequent dates in the Schedule of Events adjusted accordingly.
"Christopher Voutsinas"
CHRISTOPHER VOUTSINAS
VICE-CHAIR
Assessment Review Board
Website: www.tribunalsontario.ca/arb
APPENDIX A
REQUEST NO.
DOCUMENT TITLE AND DESCRIPTION
ISSUE IN DISPUTE
DOCUMENT TO BE PROVIDED BY
Financial Information: From the opening of the hotel (2019) to present, a copy of the full financial statements for the operation of the subject property, including the balance sheet, income statement, statement of cash flows, changes in equity, and notes to the financial statements.
Current Value and Equity
Appellant
Sale Details: All documents relating to the subject property’s sale/share transfer of May 2022, as noted in the Colliers Canada Hotel Report for $6,000,000.
Current Value
Appellant
Capital Expenditure Report: For the years 2017 to 2020, a detailed breakdown of any renovations, additions, or other modifications made to the subject property.
Current Value
Appellant
Franchise, Management or Licensing Agreement – from 2017 to present.
Current Value
Appellant