Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 09, 2026

FILE NO.:

DM 2025M02

Assessed Person(s):

1039573 Ontario Limited

Appellant(s):

1039573 Ontario Limited

Respondent(s):

Municipal Property Assessment Corporation Region 30

Respondent(s):

City of Sudbury

Property Location(s):

3R Serpentine Street

Municipality(ies):

City of Sudbury

Roll Number(s):

5307-080-002-00101-0000

Taxation Year(s):

2017 to 2023

Hearing Event No.:

785803

Legislative Authority:

Section 40.1 of the Assessment Act, R.S.O. 1990, c. A.31

Parties

Counsel/Representative

1039573 Ontario Limited;

Jonas Perov

Municipal Property Assessment Corporation

Matthew Kanter and Soussanna Karas

City of Greater Sudbury

Submissions not received

REQUEST FOR:

Correction of Palpable Error

HEARD:

February 25, 2025 in writing

ADJUDICATOR(S):

Dirk VanderBent, Vice-Chair

MOTION DECISION

OVERVIEW

11039573 Ontario Limited, (“the Owner”) is the owner of the property located at 3 Serpentine Street in the City of Greater Sudbury (the “Subject Property”).

2The Owner claims that there is an error on the assessment roll (“the Error”) for each of the 2017 to 2023 taxation years (“the Taxation Years”) which the Owner describes as follows.

3The Subject Property is vacant commercial land. Its topographical land form characteristics includes an elevated area described as Rock Outcrop (“the Rock Outcrop”), which the Owner asserts comprises approximately half of the Subject Property’s total lot area. The current value of the Subject Property was determined using a cost per square foot rate applied to total area of buildable land (“Effective Lot Size”) which was based on the size of the entire lot. However, the Owner claims that the Rock Outcrop is not buildable land. Therefore, the Owner claims that there is an Error on the assessment rolls for the Taxation Years because the assessed current value is based on an overstatement of the Effective Lot Size by approximately 50%.

4The Owner filed a Request For Reconsideration of the assessment for the 2024 taxation year, which resulted in an agreement with MPAC to reduce the assessed current value of the Subject Property from $98,000 to $29,500, a reduction of $68,500 (“the 2024 Request For Reconsideration”). The Owner claims that the agreed reduction in current value was made in recognition that of the Error on the assessment for this taxation year.

5The Owner has now filed an application with the Assessment Review Board (the “Board”) to correct the Error pursuant to s. 40.1 the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) for the Taxation Years (“the Application”). The Municipal Property Assessment Corporation (“MPAC”) and the City of Greater Sudbury are the responding parties to this Application. However, the City of Greater Sudbury (“the Municipality”) has chosen not to participate in this proceeding.

6In response, MPAC asserts that there is no error on the assessment roll for the Taxation Years, stating that the Owner’s claim is not founded in evidence, that a negotiated settlement is not an admission of an error in the assessment, and that the settlement was made based on MPAC assessor’s opinion of value and a negotiated agreement regarding the Subject Property’s marketability and development potential.

7Section 40.1 provides that the Board may correct a palpable error on the assessment roll.

8The Owner asserts that the Error is a palpable error and is self-evident because it is plain, evident, obvious, and easily understood by anyone who visited the Subject Property, that the Rock Outcrop is unbuildable land. In response, MPAC disagrees that it is unbuildable, and that MPAC’s assessor’s change in opinion of value in the 2024 Request For Reconsideration does not indicate that the Error is a palpable error that mischaracterizes the fundamental nature or legal character of the Subject Property.

9Because s. 40.1 says the Board may correct a palpable error, this means that the Board can exercise its discretion to decline to correct a palpable error. In deciding whether to do so, the Board must weigh timing, finality, and fairness with the objective of correctness of the assessment roll, to achieve a balanced approach under the legislation. To achieve this balance, the Board must carefully weigh any form of resulting prejudice to each of the parties, as well as any systemic prejudice to the administration of the municipal taxation system.

10In this case, the Owner claims that it is prejudiced if the error is not corrected because it has overpaid municipal taxes, further asserting that there is no specific evidence of prejudice to MPAC or the Municipality. In response, MPAC asserts that there is no evidence of any prejudice to the Owner, further pointing to the Owner’s conduct in failing take earlier action to pursue any change to the Subject Property’s assessment. MPAC also claims that the Application constitutes an abuse of the Board’s process because the Owner is taking a negotiated settlement, made in good faith during the 2024 Request For Reconsideration, and is, with the benefit of hindsight, attempting to retroactively apply it to previous taxation years which were not appealed.

11The purpose of this Decision is to adjudicate whether the Error is a palpable error within the meaning of s. 40.1, and, if so, whether the Board should decline to exercise its discretion to correct the palpable error.

RESULT

12The Board finds that:

1. The Error is an error on the assessment roll for each of the taxation years in question.

2. The Error is a palpable error, but the Board exercises its discretion to decline to correct the error. Consequently, the Application is dismissed.

ISSUES

13The issues the Board must address are:

1. Is the Error an error on each the assessment rolls?

2. If so, is the Error a palpable error?

3. If the Error is a palpable error, should the Board exercise its discretion to decline to correct it?

4. Is the Application an abuse of the Board’s Process?

5. Should the Board accept MPAC’s submissions on the correct legal test to be applied?

ANALYSIS

Legal Test to be applied

14Section 40.1 of the Act states:

Correction of errors

40.1 If it appears that there are palpable errors in the assessment roll,

(a) if no alteration of assessed values or classification of land is involved, the Board may correct the roll; and

(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for bringing appeals and direct the assessment corporation to be the appellant.

15Thus, if the palpable error involves the assessed value or classification of the property in question, the Board cannot issue an order correcting the assessment roll. Instead, s. 40.1(b) provides that the Board may extend the time for bringing appeals for each taxation year and requires the Board to direct that MPAC be the appellant in such appeals.

16It is important to note s. 40.1 states that the Board may correct the roll or may extend the time for bringing appeals. Therefore, the Board has the discretion to decline to do so.

17388210 Ontario Limited v Municipal Property Assessment Corporation Region 15, 2023 CanLII 64028 (ON ARB) (“0 Centre Street”), a Board Review Decision, confirms that s. 40.1 is a remedial section that provides for an alternate process to correct palpable errors in the assessment roll, which, for whatever reason, have not been corrected under other sections of the Act. The legal criteria to be applied when adjudicating a palpable error application are summarized at paragraph 132 of this Decision (the Legal Test) and are described below.

18Regarding the parties’ positions on the Legal Test as set out in 0 Centre Street, the Owner relies on this Legal Test in its submissions. MPAC challenges the Legal Test, characterizing it as a major departure from a large body of case law on the application and interpretation of s. 40.1. MPAC argues that this departure has disrupted decades of jurisprudence, further asserting that this will significantly increase the number of cases in which the Board will correct errors, thus creating several legal, practical, and policy issues.

19As the Owner adopts the Legal Test of 0 Centre Street, it is unnecessary to describe the Owner’s submissions in detail. The Board will address MPAC’s individual submissions on the Legal Test as separate issue in this Review Decision. In summary, the Board finds that the Legal Test is correct test to be applied.

Issue 1 – Is the Error an error on the assessment roll?

Legal Test to be applied

20There must appear to be an error in the assessment roll:

1. an error can include an omission;

2. an “error” is a matter of fact, and like any other fact, can be proved based on circumstantial evidence; and

3. there is no requirement that an error be unintentional. The Board is not required to determine the reasons for the error.

Evidence

21The Owner provided a document entitled Property Report prepared by TeraNet, which confirms the area of the Subject Property is 9,536.82 square feet (“sq. ft.”). This report contains an aerial photograph of the Subject Property, which includes the Rock Outcrop, but does not delineate the boundary of the Rock Outcrop or provide measurements for to calculate its size.

22MPAC provided an affidavit from the Property Valuation Specialist who conducted a review in response to the Owner’s 2024 Request For Reconsideration. In her affidavit, she stated that, during her review of the 2024 Request For Reconsideration, she determined that the Subject Property had the Rock Outcrop and that it could limit development potential.

23MPAC’s Property Valuation Specialist also confirms that her review of MPAC’s records shows that(i) there were no notes or records exist which would indicate that the issues raised in the 2024 Request For Reconsideration were raised with MPAC previously, and (ii) MPAC first became aware of the issues when the Owner submitted the 2024 Request For Reconsideration.

24Both the Owner and MPAC provided evidence to confirm the Owner’s 2024 Request For Reconsideration expressly stated that MPAC’s assessment reflected that the entirety of the Subject Property is usable. In this Request for Reconsideration the Owner further asserted that this was not case, due to the Rock Outcrop.

Submissions

Owner’s Submissions

25The Owner submits that using the wrong effective lot size of the Subject Property to calculate total land value is a plain and obvious error.

MPAC’s Response Submissions

26MPAC submits that there is no error regarding the lot size (or effective lot size). MPAC asserts that the Subject Property’s current value for the 2024 taxation year was reduced to $29,500 because of a negotiated settlement between the Owner and MPAC. MPAC notes that the lot size remains the same at 9,768 sq. ft. for the 2017 to 2025 taxation years.

27MPAC emphasizes that the Owner made no submission as to the corrected lot size (or effective lot size) and failed to provide exact measurements of the undevelopable portion of the Subject Property.

Findings on Issue 1

28The assessment roll for the Taxation Years do not report a description of the Subject Property’s physical characteristics. However, as noted in the Board’s Review Decision in Hopper v Municipal Property Assessment Corporation, Region 15, 2016 CanLII 24421 (ON ARB), at paragraph14, the Board may look at errors that are not on the face of the roll and may look at factual errors behind the assessment roll. Thus, the Board can consider whether the Error constitutes an error on the assessment roll.

29Whether the Rock Outcrop is buildable is a matter of appraisal opinion. However, the Legal Test to be applied is whether the Error is a factual error. Either the Rock Outcrop exists within the Subject Property’s boundary, or it does not. That is clearly a matter of fact, not opinion. Based on MPAC’s evidence, the existence of the Rock Outcrop was not included in the profile of the Subject Property on which MPAC relied to determine current value for the Taxation Years. This is clearly a factual error behind the assessment roll. MPAC’s evidence that the Rock Outcrop could limit development potential, indicates that the Error is relevant to the current value reported on the assessment rolls for the Taxation Years.

30Based on this evidence and analysis, the Board finds that the Error is an error on the assessment roll for the Taxation Years.

Issue 2 – If there is an error, is the error palpable?

Legal Test to be applied:

31The criteria for determining whether the error is palpable:

1. in determining whether an error is palpable error, the sole test is whether it is a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand;

2. an “error” is a matter of fact, and like any other fact, can be proved based on circumstantial evidence;

3. the standard of proof to establish a palpable error is on a balance of probabilities; and

4. the Board may find that there is a palpable error even though one or more of the parties may argue that there is no palpable error.

Submissions

Owner’s Submissions

32The Owner submits that using an incorrect effective lot size to calculate the Subject Property’s land value is a clear example of a “factual error of conspicuous magnitude;” as it would be “plain, evident, obvious, and easy to understand” to anyone familiar with the Subject Property that approximately 50% of the lot is covered by an “unbuildable mountain”, and MPAC’s use of a 9,768 sq. ft. effective lot size to calculate the Subject Property’s original 2016 current value assessment failed to account for this unbuildable land.

MPAC’s Response Submissions

33MPAC submits that the Error is not a palpable error.

34MPAC asserts that the Owner’s claim, i.e. that the pre-existing error in the lot size was corrected via the settlement of the 2024 Request For Reconsideration, is erroneous and not founded in evidence. MPAC states that the Subject Property’s 2016 current value assessment for the 2024 taxation year was reduced to $29,500 because of a negotiated settlement between the Owner and MPAC, emphasizing that the Subject Property’s lot size remains the same at 9,768 sq. ft. for the 2017 to 2025 taxation years.

35MPAC submits that the Error “is definitely not “an error of conspicuous magnitude; plain, evident, obvious, and easy to understand” or an error that mischaracterizes the fundamental nature or legal character of the Subject Property.”

36MPAC further submits that a negotiated settlement is not an admission of an error in the assessment, asserting that, to hold otherwise, would have a significant chilling effect on settlements in assessment disputes before the Board.

Owner’s Reply Submissions

37The Owner refers to an adjacent property that is also affected by the Rock Outcrop, noting that its assessed value per sq. ft. rate is lower than MPAC’s assessed value of the Subject Property. The Owner submits that, on a balance of probabilities, it is more likely than not MPAC would have assessed the Subject Property at a similar rate to the immediately adjacent property, if not for its oversight in failing to account for the unbuildable land. Thus, the Owner maintains that valuing the Subject Property as though the entire lot were buildable, while applying a significant discount to the neighbouring property, which is also affected by the same unbuildable outcrop, does constitute a clear and palpable error.

38The Owner agrees with MPAC that not all negotiated settlements necessarily reflect a palpable error in the assessment roll. However, the Owner maintains that certain valuation errors can nevertheless constitute palpable errors, which, the Owner submits, is the case for the Subject Property.

Findings on Issue 2

39The criteria for determining whether the error is palpable:

1. in determining whether an error is palpable error, the sole test is whether it is a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand;

2. an “error” is a matter of fact, and like any other fact, can be proved based on circumstantial evidence;

3. the standard of proof to establish a palpable error is on a balance of probabilities; and

4. the Board may find that there is a palpable error even though one or more of the parties may argue that there is no palpable error.

40The Board begins by addressing the relevance of the 2024 Request For Reconsideration when determining whether the Error is palpable. The Board finds that the settlement of for 2024 taxation year, does not address whether there was a palpable error on the assessment roll. Therefore, there can be no assumption that it indicates the Error is a palpable error for the Taxation Years.

41As stated in 0 Centre Street, at paragraph 69, the error, once identified, must be judged on its face as to whether it can be characterized as being plain, evident, obvious, and easy to understand. Simply stated, on its face, the Error possesses all of these characteristics. The Rock Outcrop exists and was not considered by MPAC in determining current value for the Taxation Years.

42The remaining criteria is that a palpable error must be an error of conspicuous magnitude. In addressing this criterium, the Board notes that s.40.1 states: “Where it appears that there are palpable errors in the assessment roll … ” (emphasis added). Thus, the test is whether it appears that there is an error of conspicuous magnitude. As applied to the Error in this case, this determination may require consideration of the size of the Rock Outcrop, because a significant overstatement of the effective building area could affect the determination of current value if such determination was made on the price per square foot basis.

43MPAC has correctly pointed out that the Owner’s evidence does not provide exact measurements of the undevelopable portion of the Subject Property. Instead, the Owner’s has only estimated that the Rock Outcrop occupies half of the Subject Property’s lot area. Absent a survey or equivalent evidence, the Board does not a make a finding that the area is approximately 50%of the total lot area. However, the Board finds that the aerial photographs provided by the Owner indicates that its size is not inconsequential. This finding is supported by the evidence of MPAC’s Property Valuation Specialist that the Rock Outcrop the Rock Outcrop could limit development potential.

44Therefore, the Board finds that the Owner has provided sufficient evidence to find that it appears that the Rock Outcrop area is significant. Consequently, the Board finds that the Error is conspicuous in magnitude.

45In summary, as the Board has found that the Error is a factual error of conspicuous magnitude; plain, evident, obvious, and easy to understand, the Board concludes that the Error is a palpable error.

Issue 3 – If the Error is a palpable error, should the Board exercise its discretion to decline to correct it?

460 Centre Street states the criteria for determining whether the error is palpable:

1. In exercising discretion, there is no requirement that the Board should only exercise its discretion if it would be unreasonable, unfair, and highly prejudicial to enforce the statutory filing due dates under s. 39.1 or s. 40 of the Act. Section 40.1 is not an extraordinary remedy to be exercised sparingly.

2. Timing, finality, and fairness must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the legislation.

3. The Board will achieve the required balance if the Board carefully weighs any form of resulting prejudice to each of the parties, and systemic prejudice to the administration of the municipal taxation system. The exercise of such discretion is case specific. It must be considered in the context of the relevant circumstances, including both the nature of the consequences if the palpable error is, or is not corrected, and the conduct of the parties. In this regard, specific relevant considerations are:

(i) the parties must adduce evidence of prejudice;

(ii) the Board must consider the prejudicial consequences for the parties, if an error on the assessment roll is, or is not, corrected;

(iii) regarding any delay in applying to correct a palpable error, the relevant consideration is not whether the parties failed to file a s. 40 appeal on time. It is whether any of the parties have been prejudiced by the delay in correcting the palpable error;

(iv) the Board must consider the financial consequences to the parties;

(v) The Board must also consider the conduct of the parties - a party who claims prejudice cannot rely on its own carelessness, but such conduct must causally contribute to the palpable error being made. A party’s conduct must be considered in its entirety - the Board must consider the actions or inactions of a party throughout the process of identifying the palpable error as well as the conduct of the other parties. A party’s reasons for its actions or inactions, as well as the party’s efforts to identify and pursue correction of the palpable error, are also relevant considerations;

(vi) If no party claims prejudice, and there is no evidence of systemic prejudice to the administration of the municipal taxation system, then these circumstances would favour exercising the discretion to correct the palpable error, as correcting errors is the primary purpose of s. 40.1; and

(vii) Similarly, if one or more parties claim they will be prejudiced if a palpable error is not corrected, and the other parties do not claim prejudice, then these circumstances would also favour exercising the discretion to correct the palpable error, more so if all parties agree that the palpable error should be corrected.

Evidence

47Regarding the question of whether the Owner notified MPAC of the existence of the Large Rock Outcrop, the Owner filed affidavit evidence provided by its Vice President in which he stated:

I had phone conversations with MPAC representatives when I became the VP of 1039573 Ontario Limited in 2014, in which I attempted to bring to MPAC's attention the error that had been made in assessing the entire property as buildable commercial land. However, I do not have any written records of these verbal conversations due to the length of time that has passed.

48In response, MPAC filed the affidavit of its Property Valuation Specialist who stated:

I have conducted a search of MPAC’s records going back to at least 2006

and can confirm that:

a. No notes or records exist which would indicate that the issues raised in the 2024 RfR were raised to MPAC previously. MPAC first became aware of the issues when the Applicant submitted the 2024 RfR.

b. No RfRs or appeals were filed by the Applicant for the Subject Property for the 2017 to 2023 taxation years.

49The Owner also provided evidence indicating that if the current value of the Subject Property for each of the Taxation Years, as it was for the 2024 taxation year, the total refund for the Taxation Years would be $16,485.

Submissions

Owner’s Submissions

50The Owner claim that it is prejudiced if the Error is not corrected because it would be overpaying municipal taxes for unbuildable land. The Owner further submits that there is no specific evidence of hardship to any other party.

51The Owner submits that the importance of a correct assessment roll, and the balance of prejudice to the parties, weigh in favour of exercising the Board’s discretion to correct the Error.

52The Owner relies on paragraph 126 of 0 Centre Street, where the Reviewing Member expressly addresses and rejects the argument that exercising discretion under s. 40.1 would render s. 40 limitation periods meaningless, observing that “the correction of errors under s. 40.1 provides only for the correction of palpable errors, and, therefore, does not provide the parties with an opportunity to appeal on any of the grounds listed in s. 40(1) of the Act.”

MPAC’s Response Submissions

53MPAC maintains that the Owner knew about the Rock Outcrop since at least 2014 and took no steps to pursue any change to the Subject Property’s assessment via the process prescribed by the Act. In support of this submission, MPAC points out that the condition of the Subject Property remained the same, i.e., the Rock Outcrop, which might affect the buildability of the Subject Property for the Taxation Years. MPAC submits that the Board should consider the Owner’s failure to submit a request for review or file an appeal, and refuse to exercise its discretion to extend the time to bring appeals.

54MPAC further submits that there is no prejudice to the Owner if the Error is not corrected because the Owner did not notify MPAC of the Error. In support of this submission MPAC cites the Board Decision in Mike Dean Butcher Limited v Clarence-Rockland (City), 2023 CanLII 95292 (ON ARB) (“Mike Dean Butcher”). where the Hearing Member exercised her discretion to decline to correct the palpable error.

55MPAC also submits that there is systemic prejudice to the administration of the municipal taxation system. In support of this submission, MPAC asserts that settlement of assessment appeals for a taxation year do not necessarily reflect any error in the assessment.

56MPAC further argues that granting the Application in this case, would systemically prejudice MPAC’s (and municipalities’) ability to negotiate and resolve disputes in good faith, because any settlement for a reduced current value could then be retroactively applied to previous taxation years through a palpable error application, contrary to MPAC’s (or the applicable municipality’s) agreement or intent, and contrary to the scheme of the Act.

Owner’s Reply Submissions

57Regarding MPAC’s submission on systemic prejudice, the Owner refers to paragraph 126 of 0 Centre Street, noting that the Reviewing Member expressly addresses and rejects the argument that exercising discretion under s. 40.1 would render s. 40 limitation periods meaningless, observing that “the correction of errors under s. 40.1 provides only for the correction of palpable errors, and, therefore, does not provide the parties with an opportunity to appeal on any of the grounds listed in s. 40(1) of the Act.”

Findings on Issue 3

Evidentiary Findings

58Regarding the question whether the Owner advised MPAC of the Error, the Board notes that the Owner’s evidence is sparse. No details were provided as to exactly when in 2014 the phone conversations took place, nor the names of MPAC representatives who participated in these conversations. The Board acknowledges that this lack of detail could be due to the passage of time – as the Vice President has stated, he no longer has notes of the conversation. Even so, the evidence adduced does not provide the specific details of what was discussed, particularly whether MPAC’s representatives agreed or disagreed with the Vice President’s position.

59If the matter was of sufficient concern for the Vice President at that time, one would expect, when MPAC did not correct the Error, that the Owner would have taken some steps to address the issue, either by filing an appeal or contacting MPAC further to discuss the matter. It is not disputed that the Owner took no further subsequent steps to address the matter. This raises concern that the nature of the phone conversations, if they did occur, led to any acknowledgment that a redetermination of current value was required. Balanced against this evidence, is MPAC’s evidence that it has no existing records of the alleged 2014 conversations, and that MPAC first became aware of the issues only when the Owner submitted the 2024 Request For Reconsideration.

60In this proceeding, the burden of proof rests with the Owner. The Board finds that the evidence indicates that either the 2014 conversations did not occur, or if they did, there is no indication that MPAC indicated a reassessment was required. Either way, the finds that evidence establishes: (i) the Owner was aware of the Large Rock Outcrop existed and that it could affect the current value of the Subject Property; (ii) the Owner was aware, or believed, that MPAC did not take the Large Rock Outcrop into consideration in its assessment of current value; (iii) the Owner would have been aware that MPAC did not change the current value in 2014 or subsequent years because the current value of the Subject Property did not change; and (v) the Owner took no action until 2024 when it submitted its 2024 Request For Reconsideration.

61Regarding the financial consequences to the Appellant, the Board accepts that the Owner’s evidence as MPAC does not dispute this evidence.

Finding on whether the Board should exercise its discretion to decline to correct the palpable error.

62The Board begins by emphasizing the finding in 0 Centre Street – the need to balance questions of timing and fairness with the need for correction and the integrity of the assessment roll, further indicating that timing and finality must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the Act. This is the guiding principle when considering prejudice to the parties, for the purpose of determining whether the Board should decline to exercise its discretion to correct a palpable error.

63Thus, it is important to note that financial prejudice to a party, in and of itself, is not determinative, because the Board must consider the competing principle of finality of the assessment roll and fairness to all parties.

64Turning first to MPAC’s submissions, the Board accepts MPAC’s submission that a settlement of an assessment upon a request for review does not necessarily reflect any error in the assessment. It is clear, under the Act, that current value is an opinion of value. A settlement may reflect a compromise of conflicting opinions as to current value where there is no error in the property’s profile on which the opinions are based. Furthermore, while a settlement changing current value may be motivated by the existence of an error in the property profile, the error may not be a palpable error. Conversely, the Board accepts the Owner’s submission that a settlement does not indicate that there is no palpable error. Consequently, the existence of a settlement is not determinative of whether there is palpable error.

65At best, if the Board determines that there is a palpable error, and it appears that a settlement respecting current value was based on recognition of a palpable error, the settlement may provide an indication of the potential quantum of an overpayment of taxes resulting from the error. In this case, it appears that the settlement did reflect consideration of the impact of the Rock Outcrop on current value, because the evidence is clear that the Owner’s 2024 Request For Reconsideration expressly stated that this was the basis for the request, and MPAC’s Property Valuation Specialist expressly acknowledged that the Rock Outcrop could limit development potential. Therefore, the Board finds that the settlement supports the Owner’s claim respecting the quantum of financial prejudice to the Owner if the Error is not corrected.

66Based on the above analysis, the Board does not accept MPAC’s submission that a settlement for a reduced value would automatically be retroactively applied to previous years through a palpable error application. A palpable error application sets its own criteria which must be satisfied before a correction to an assessment roll can be made. As stated in 0 Centre Street, at paragraph 29, the remedy provided in s. 40.1 is significantly narrower in scope than the remedy provided by the s. 40 appeal process because of the restrictive conditions imposed by s. 40.1.

67Turning now to merits of this case, the Board first reiterates the finding in 0 Centre Street that the Board must consider the actions or inactions of a party throughout the process of identifying the palpable error as well as the conduct of the other parties. A party’s reasons for its actions or inactions, as well as the party’s efforts to identify and pursue correction of the palpable error, are also relevant considerations.

68The Board observes that the above finding respecting conduct gives due recognition to the principle of finality in the assessment roll. The Act reinforces this principle. While errors can be corrected, either by MPAC under s.32 of the Act, or by the Board in an appeal under s. 40, s. 41 also expressly provides that the assessment roll “binds all parties concerned, despite any defect or error committed in or with regard to the roll” (emphasis added). So, the objective of correctness is not absolute.

69Furthermore, under municipal legislation, municipalities, in part, base their annual budget on the assessment roll. Therefore, while a palpable would cause financial prejudice to the property owner due to a potential over-payment of taxes, the municipality experiences a counter-balancing prejudice in the loss of tax revenues that the municipality otherwise expected to receive when it developed its budget. While the municipality did not provide submissions in this proceeding, MPAC in its submissions, has made reference to this type of prejudice, and, therefore, the Board will consider it in this case.

70Regarding prejudice to MPAC, the Board notes that MPAC has only collaterally referred to prejudice in its submissions challenging the Application of the Legal Test. The Board has rejected MPAC’s argument respecting potential impediments to its ability to negotiate settlements. The remaining prejudice alluded to by MPAC is its reference to the fact that, if a palpable error is corrected, MPAC must file an appeal, and pay the filing fee. The Board further notes that this also includes time and resources expended to conduct the appeal proceeding to correct the palpable error. The Board has considered such prejudice in this case.

71The Board now turns to prejudice to the Owner if the Error is not corrected. The financial prejudice is clear, $16,485, which, as a lump sum, is not insignificant. However, over a period of ten years, it amounts to only $1,649 (rounded) per year. Furthermore, in this case, the Owner’s conduct in failing to take any action since 2014 cannot be ignored. As stated in 0 Centre Street, a party who claims prejudice cannot rely on its own carelessness (see paragraph 121). The decision in 0 Centre Street also addresses timing, stating that the gravamen of the delay is the prejudice the delay may cause (see paragraph 118).

72The evidence is clear that the financial prejudice to the Owner is due to its own inaction. The Owner was aware of the Error but took no action to address it for a prolonged period. Therefore, the Board must attribute much less weight to the financial prejudice claimed by the Owner because of this conduct. Such delay is not consistent with finality of the assessment roll.

73In correcting the error, as discussed above, such delay will cause prejudice to the Municipality in that it significantly increases the lump sum adjustment to be paid from its current annual budget, an adjustment that the Municipality could not have anticipated. Therefore, while there is unfairness to the Owner if the Error is not corrected, there is also unfairness to the Municipality if it is corrected. The requirement for fairness applies to all parties.

74In weighing the prejudice to the parties, it is important to note that delay in correcting an error impairs finality. Therefore, the Board concludes that the prejudice of not correcting the Error (weighed in the context that there has been significant delay due to the Owner’s inaction), is outweighed by the prejudice to the Municipality as described above, and system prejudice as the delay impairs finality.

75Considering the above analysis and findings, the Board finds that, in this case, a balanced approach in weighing timing, finality, and fairness with the objective of correctness of the assessment roll, favours making no correction to the assessment roll for the Taxation Years.

Issue 4 – Is the Application an abuse of the Board’s Process?

76As the Board has exercised it discretion to decline to correct the Error, it is unnecessary to address this issue.

Issue 5 – Should the Board accept MPAC’s submissions on the correct legal test to be applied?

Submissions and findings respecting the correct Legal Test to be applied

77MPAC’s submissions are grouped as five main submissions. The Board will address each in turn.

Submission 1

78MPAC submits that 0 Centre Street improperly expands the definition of “palpable error”. In support of this submission MPAC points to several findings in 0 Centre Street that rejected findings in prior caselaw.

790 Centre Street describes the Legal Test outlined above as “the Balanced Approach”, as opposed to approaches taken in prior Board jurisprudence, described as “the Restrictive Approach”. Regarding the Balanced Approach, MPAC submits:

The Balanced Approach rejected the line of previous decisions in which the Board consistently refused to exercise its discretion if the appellant ought to have, but failed to, file an appeal in a timely manner. This analysis was derived from the Divisional Court’s binding pronouncement that “[a] complainant cannot rely on its own carelessness.”²⁶

Using the Board’s own language, the Balanced Approach “render[s]the time limit for filing an appeal meaningless…”²⁷because any taxpayer who fails, refuses or neglects to file a timely appeal can simply re-open an appeal in respect of taxation years that ought to have been closed years (or even decades) ago, contrary to the Board’s reasoned analysis in York Condominium.

Instead, the Balanced Approach requires the Board to exercise its discretion to grant palpable error motions unless the property owner’s conduct causally contributed to the error being made.⁸

80In addressing this submission, the Board first notes that the decisions cited in the footnotes to MPAC’s submission were all addressed in 0 Centre Street.

81Regarding the first allegation in this submission, it is based on the Divisional Court decision in 217-225 Richmond Street West Ltd. v Ontario (Assessment Review Board), 1997 CanLII 26465 (ON SC), [1998] OJ No 35. As noted in 0 Centre Street, at paragraphs 121 and 122, this decision addressed a late appeal application not a palpable error application. Nevertheless, the Reviewing Member adopted the principle that a party cannot rely on its own carelessness to claim prejudice (see paragraph 132 (4) (v)).

82MPAC’s second allegation (that the Reviewing Member stated “the Balanced Approach renders the time limit for filing an appeal meaningless”) is an incorrect characterization. This statement was made by a municipality. At paragraph 15 of 0 Centre Street, the Reviewing Member simply reported the municipality’s submission. It is not a finding of the Board.

83Regarding MPAC’s assertion (that …”any taxpayer who fails, refuses or neglects to file a timely appeal can simply re-open an appeal in respect of taxation years that ought to have been closed …”) again mischaracterizes the Legal Test in 0 Centre Street, which expressly provides that, when addressing the Board’s discretion whether to decline to correct a palpable error, the Board must consider the conduct of the parties, which includes carelessness.

84The third allegation (that the Board is required to exercise its discretion to grant a palpable error unless the property owner’s conduct causally contributed to the error), is also a mischaracterization of the Legal Test. The criterium referenced by MPAC is found at paragraph 132(4) (iii) (v) which states:

v. The Board must also consider the conduct of the parties - a party who claims prejudice cannot rely on its own carelessness, but such conduct must causally contribute to the palpable error being made. A party’s conduct must be considered in its entirety - the Board must consider the actions or inactions of a party throughout the process of identifying the palpable error as well as the conduct of the other parties. A party’s reasons for its actions or inactions, as well as the party’s efforts to identify and pursue correction of the palpable error, are also relevant considerations.

The intent of this criterium is clear. Any party’s conduct (not just the property’s owner’s conduct) must relate either to the palpable error being made, or any delay in achieving correction of the palpable error (for example, delay in either appealing or applying to correct a palpable error). This conduct will be considered when deciding whether the Board should exercise its discretion to correct the palpable error. Moreover, this criterium must be considered in the context of the general test: The need to balance questions of timing and fairness with the need for correction and the integrity of the assessment roll; timing and finality must be weighed with the objective of correctness of the assessment roll in achieving a balanced approach under the legislation. Therefore, the Board does not accept that this criterium dictates a requirement to correct an error based solely on one party’s conduct.

85For these reasons, the Board does not accept Submission 1.

Submission 2

86MPAC submits:

Moreover, the Balanced Approach’s exclusive focus on prejudice removes all discretion from the Board member hearing the palpable error application, in contravention of section 40.1(b) of the Act. Section 40.1(b) states that, if it appears that there are palpable errors in the assessment roll, the Board “may” (not “shall”) extend the time for bringing appeals. When applying the Balanced Approach, however, the Board has always found prejudice to a taxpayer who provides evidence of overpayment of their taxes and has never found prejudice to MPAC, which must file appeals, pay the filing fee, and correct any alleged errors. The only exception – where the Board did not exercise its discretion to bring late appeals under the Balanced Approach – is the Mike Dean Butcher Limited v Clarence-Rockland (City)²⁹ (“Mike Dean Butcher”) case (discussed below) where the taxpayer did not provide evidence regarding the quantum of taxes it was overtaxed or the prejudice it would suffer if the prejudice were not corrected.

87MPAC’s allegation that the Board has always found prejudice to a taxpayer, may be the case if the claim is financial prejudice. It is axiomatic that overpaying municipal taxes is prejudicial to the taxpayer. However, the existence of such prejudice does not dictate that the Board will automatically correct the error. The Legal Test requires consideration of prejudice to all parties. MPAC’s allegation (that the Board has never found prejudice to MPAC) is unsupported by any information or analysis. In this regard, the Board observes that the Legal Test specifies that a party must adduce evidence of prejudice. MPAC has not referenced any decision where MPAC asserted a claim of prejudice that the Board did not consider.

88In Mike Dean Butcher, MPAC correctly points out that the Hearing Member exercised her discretion to decline to correct the palpable error. However, what MPAC has not pointed out, is that the Hearing Member applied the Legal Test when making her decision. This does not support MPAC’s contention that the Legal Test “removes all discretion from the Board Member hearing the palpable error application.”

89For these reasons the Board does not accept Submission 2.

Submission 3

90MPAC submits:

In cases where the municipality has alleged prejudice, the Board has disregarded uncontested evidence of the negative impact of unbudgeted adjustments on the municipality’s operating budget and cost to deliver services, and extended the time to appeal.

In support of this submission, MPAC cites D F Knechtel Enterprises Corp. v Municipal Property Assessment Corporation Region 20, 2023 CanLII 121517 (ON ARB) at paragraphs 22 and 26.

91The Board finds MPAC’s statement (that “the Board has disregarded uncontested evidence”) is a mischaracterization of the Hearing Member’s finding. At paragraph 22, a paragraph which MPAC has cited to the Board, the Hearing Member detailed the municipality’s evidence regarding financial prejudice. At paragraph 27, in her conclusion regarding the exercise of discretion, the Hearing Member stated “In all of the circumstances, including evidence of prejudice to both the City and the Property Owner, giving due consideration to timing, finality, and fairness balanced with the objective of correctness of the assessment roll …” (emphasis added). This clearly indicates that the Board did consider the municipality’s evidence. Therefore, the Board does not accept MPAC’s submission.

92For these reasons, the Board does not accept Submission 3.

Submission 4

93MPAC submits:

Thus, the Balanced Approach renders the Board’s discretion (and the use of the word “may” in Section 40.1(b) of the Act) meaningless because if there is evidence of overpayment of taxes, the Board will always find (and has always found) that the property owner has suffered the most significant prejudice.

94The Board finds that this submission is a bald assertion that is not supported by any analysis. As earlier described, the Legal Test requires a balanced consideration of the prejudice to all parties. The Legal Test does not include any presumption that evidence of overpayment of taxes must take priority over prejudice to other parties, nor does it obviate consideration of the parties’ conduct.

95For these reasons the Board does not accept Submission 4.

Submission 5

96MPAC submits:

The [0 Centre Street] decision carries several policy consequences that effectively undermine the purpose and the scheme of the Act and the reliability of the assessment dispute framework:

a. Disregarding the property owner’s conduct and their duty to appeal in a timely manner renders appeal deadlines meaningless and will lead to a significant increase of palpable error applications and open appeals going back multiple years, disrupting finality and stability in the assessment roll.

b. By focusing on financial prejudice to the taxpayer, the Board has shifted the balance between the finality and correctness beyond that envisioned by the Divisional Court in Toronto (City) v Wolf and has disregarded the interests of other parties in the assessment system.

c. Equating the changes to the Subject Property’s CVA agreed to via settlement discussions to a palpable error undermines the integrity of the settlement process and erodes parties' freedom to negotiate and compromise without fear of later retroactive disruption.

d. If settlements can be made retroactively by the application of a palpable error, there will be a disincentive for MPAC and municipalities to settle disputes, which would be contrary to the Board’s stated goal of encouraging settlements and could lead to a significant increase in unnecessary hearings before the Board. In recent months, there have been at least three palpable error applications filed under section 40.1 of the Act using settlements reached via RfR or appeals to claim palpable errors for the previous taxation years within the same assessment cycle.

The Board will address each “consequence” in turn.

97Consequence ‘a’ is based on an incorrect premise that the Legal Test disregards the property’s owner conduct. As discussed above, the Legal Test expressly includes consideration of such conduct. As such it does not render appeal deadline meaningless. Regarding the allegation that there will be a significant increase in palpable error applications, MPAC provides no evidence in support of this assertion. In fact, a contrary conclusion is indicated. Pursuant to s. 40.1 of the Act, only the Board can correct a palpable error. Therefore, the Board’s data regarding the number of palpable error applications filed with the Board, confirms the actual volume of palpable error applications requested in any given calendar year. The Board records indicate that the number of such applications received for the calendar years following the issuance of 0 Centre Street on July 14, 2023 are:

Year

Number of Applications

2023 (July to December)

4

2024

13

2025

10

Bearing in mind that there are millions of properties in Ontario, the number of palpable error applications received by the Board can only be described as miniscule.

98Regarding consequence ‘b’, the Board has already stated that the Legal Test does not “focus” on financial prejudice to the taxpayer. The Divisional Court decision cited by MPAC, Toronto (City) v. Wolf, 2008 CanLII 39430 (ON SCDC), is in respect of a late appeal application (not a palpable error application) where the issue was whether a notice of assessment had been received by the property owner. Furthermore, this decision pre-dates the Divisional Court decision in The Kensington Foundation v. Municipal Property Assessment Corporation et al., 2013 ONSC 7694 which sets out the applicable considerations on which the Legal Test is based.

99Regarding consequences ‘c’, and ‘d’, the Legal Test does not require consideration of whether the parties agreed to a settlement, nor does it equate an agreed change to a current value “to a palpable error”.

100For these reasons, the Board does not accept Submission 5.

Summary of findings

101In closing, the Board notes that, in Mike Dean Butcher, MPAC also challenged the correctness of the Legal Test. The Hearing Member rejected MPAC’s submission, stating at paragraph 25:

25With respect to the reasoning in 0 Centre Street, the Board does not accept MPAC’s argument that it should not adopt the analytical framework developed in that decision. The Board strives for consistency in its decision-making. Without justification – such as a good reason to distinguish it on the facts, or a reason to believe that 0 Centre Street contained an error – good practice suggests that it be followed where applicable: see Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 SCR 653 at paragraphs 129 to 132. The Board finds there is no basis to distinguish this case on the facts. The Board further finds that MPAC has not provided a convincing rationale to find that the analysis in 0 Centre Street is incorrect. While 0 Centre Street departs from previous case law in terms of its rejection of the “Restrictive Approach” to the exercise of discretion, this is a well-reasoned and sound departure that is relevant to the request before the Board. For these reasons, the Board will apply the framework developed in 0 Centre Street with respect to the exercise of discretion.

102Based on the above analyses and findings, the Board does not accept MPAC’s submission that the Legal Test is incorrect. Consequently, the Legal Test should be applied when determining the Owner’s Application.

CONCLUSION

103As the Board has found that the Error is a palpable error on the assessment roll for the Taxation Years and has exercised its discretion to decline to correct the Error, the Board dismisses the Application.

ORDER

104The Application is dismissed.