Court File #1195

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE

BETWEEN: )

LINDA MARIE ALCORN ) Scott K. Campbell, for the ) appellant Municipalityof Bayham Plaintiff ) (Respondent) )

• and - )

MUNICIPALITY OF BAYHAM ) The respondent, Ms. Linda Marie ) Alcorn, pro se. Defendant ) (Appellant) ) HEARD: June 4, 2002, at ) St. Thomas

On appeal from the judgment of the Honourable Walter Bell, delivered on November 29, 2000, in the Small Claims Courtat St. Thomas

KilleenJ.:

[1] The Municipality of Bayham appeals a judgment of Deputy Judge Bell, sitting in the Small Claims Court at St. Thomas, in which he held that the Municipality should repay to the plaintiff, Linda Marie Alcorn, the sum of $1005 which it had overcharged her in municipal taxes during the period from 1989 to 1996. In so holding, the learned judge purported to rely on the principle of unjust enrichment.

The Background Facts

[2] The plaintiff purchased a parcel of lake-front property beside Lake Erie in Bayham (then the Township of Bayham) in 1989.

[3] After the plaintiff acquired this property, she received Notices of Assessment from Bayham in the usual way under the Assessment Act, R.S.O. 1990, c.A.31, and it seems clear that she did not complain about or appeal her annual assessments until 1998.

[4] Ms. Alcorn, in her evidence, stated that it was not until 1998 that she discovered that she was being assessed and taxed during the prior years on a portion of lands which were under water in Lake Erie. It seems that, in 1998, the regional assessment office removed the underwater lands from the assessment but this left outstanding the issue of a possible rebate claim for the earlier years.

[5] The full flavour of Ms. Alcorn's case is captured in a portion of her Claim reading as follows:

The Plaintiff purchased property in 1989 in the Municipality of Bayham as Part Lots 3 & 4, and all Lots C & D, Plan 217, lying south of County Road 42. Taxation and assessment notices from 1989 to 1997 described the property as 67.17 acres zoned agricultural, including 36+/- acres of eroded class 6 farmland under Lake Erie valued at $7172. The proportion of annual property taxes charged on land under Lake Erie was as follows: 1989 ($145); 1990 ($125); 1991 ($121); 1992 ($153); 1993 ($108); 1994 ($116); 1995 ($116); 1996 ($121); 1997 ($123). When the Plaintiff was advised in 1998 by the Ministry of Natural Resources that eroded land under Lake Erie was crown land, the Regional Assessment Office reduced the site area to 30+/- acres, claiming an error of judgment in previous assessments and making no recommendations for a tax adjustment under Section 443 of the Municipal Act. In 1999 the Plaintiff learned that Map 83 of the Municipality of Bayham Zoning Bylaw 2387 indicated that the Municipality of Bayham was aware in 1988 that 36+/- acres of land had eroded on the above property and was crown land no longer liable for taxation. The Plaintiff claims that the Municipality of Bayham acted improperly under Section 375 of the Municipal Act in taxing this land as rateable residential/farm assessment from 1989 to 1997, and claims $1128 in damages plus prejudgement interest from the date of taxation.

[6] In a later portion of the Claim she provides a very careful calculation, year-by-year, of the portions of her annual tax bills which she says are attributable to the alleged improper taxes on the submerged land.

[7] At the end of the Claim, Ms. Alcorn provides details of the basis for her cause of action against the Municipality:

The plaintiff claims that the Municipality of Bayham acted improperly by failing to grant tax relief under Section 442 of the Municipal Act in a situation of financial hardships and disability, and claims damages of $1255 as compensation for tax relief denied in 1999.

[8] While Ms. Alcorn also mentions in her Claim certain tax sale proceedings which were taken against her by the municipality in 1999, it seems that her cause of action is limited to the claim for $1255 as specified in the above passage of the Claim.

[9] Ms. Suzanna Mantal, the Treasurer of the municipality, also testified during the trial. She provided the trial judge with a review of some of the relevant statutory provisions of both the Municipal Act and the Assessment Act and also attempted to provide some background information with respect to Ms. Alcorn's property and how it was assessed and taxed over the years.

[10] Ms. Mantal acknowledged that the Alcorn property had been assessed for many years as having 67.17 acres and, as well, that approximately 36 of such acres were under water as a result of long-standing soil erosion. Her position was that it was permissible under the Municipal Act to assess the submerged lands and that, in any event, Ms. Alcorn had the right to appeal the assessments over the years and failed to do so.

[11] Ms. Mantal acknowledged that in 1998 and subsequently, the Regional Assessment Commission finally removed the submerged lands from the assessment roll after an official of the Ontario Ministry of Natural Resources wrote a letter to the Regional Assessment Commissioner in London, dated March 12, 1998, advising that the submerged lands had become part of the bed of Lake Erie with the legal result that they had reverted to the provincial Crown (Ex. 9). After the letter was received, it seems that assessment roll for the Alcorn property was adjusted or amended so that, thereafter, the property was shown as having only about 31 acres of assessable lands.

The Legal Issues

[12] In his judgment at trial, Judge Bell ruled in favour of the plaintiff on the basis of the principle of unjust enrichment. He said this at p. 1:

I find the receipt by the defendant of taxes on submerged land to fall within the applicable principal (sic) of unjust enrichment. There are many judicial definitions of 'unjust enrichment' in Canadian jurisprudence. Examples are found in, among others, two modern cases. In James Moore and Sons Ltd. v. The Universityof Ottawa,[1974], O.R., second edition, the following statement is made:

"Unjust enrichment involves three things: 1) That the defendant as been enriched by the receipt of the benefit; 2) That the defendant has been so enriched at the Plaintiff's expense and, 3) That it would be unjust to allow the defendant to retain the benefit.

[13] He went on to add this later in his judgement at pp. 2-3:

In the result, the Plaintiff will have judgment for return of $1005.00. I do not know whether they have a right to a declaratory judgment, but they may have at their peril a declaration the defendant is not entitled to payment of $123 in respect of 1997, and is not entitled to payment of $1000.00 in respect of interest and penalty. Those amounts are likewise stigmatised as constituting 'unjust enrichment'.

[14] Mr. Campbell, for the Municipality, argued that Judge Bell erred in law in attempting to apply the principle of unjust enrichment in a case involving the interplay of the Assessment Act and the Municipal Act.

[15] His position is that the Assessment Act contains an exclusive and self-contained code for all land assessment issues and that any remedies that the appellant may have must come from within four corners of the Act and not elsewhere. In order words, he submits that the trial judge had no right to apply the equitable rule of unjust enrichment to override the statutory code contained in the Act.

[16] Ms. Alcorn, on her own behalf in a very able and spirited submission, supported the trial judge's decision. She said that the municipality had no power to assess or tax the submerged lands and that it was only just that she should recover the illegally imposed taxes.

Conclusions

[17] This is an unfortunate case because it seems fairly clear from the evidence that the 36-acre submerged portion of the appellant's lands probably should have been deleted for assessment purposes long before 1998 when that in fact happened. As already noted, in that year, Mr. Rick Thompson of the Ministry of Natural Resources wrote to the Regional Assessment Commissioner to point out that the submerged lands had undoubtedly reverted to the Crown and the assessment roll was apparently quietly corrected by the Commissioner to reflect that fact.

[18] Having said that, it must also be said that the Assessment Act is a self-contained code for assessment issues and if an aggrieved landowner is unhappy with his or her assessment and consequential taxes, that landowner must seek a remedy under the Act and not elsewhere. The general complaint or appeal power contained in the Act is found in s. 40 which allows an aggrieved owner to appeal any aspect of the annual Notice of Assessment to the Assessment Review Board.

[19] Section 40 itself and subsequent sections, including s. 44(1), give very broad powers to correct an assessment roll. For example, s. 44(1) provides this rather sweeping power to the Assessment Review Board and other appeal levels above it:

Upon an appeal on any ground against an assessment, the Assessment Review Board, Ontario Municipal Board or court, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefore may be placed upon the roll, and if necessary the roll of the municipality, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

[20] There is evidence in the record that Ms. Alcorn sought relief from her taxes in 1999 under s. 442(1) of the Municipal Act which empowers the council of a given municipality to cancel, reduce or refund municipal taxes in specified circumstances. At that time, Ms. Alcorn had allowed her taxes to fall into substantial arrears and she was apparently being threatened with a tax sale of her property. Her husband was ill at this time and had applied for a CPP disability pension although it had not yet been granted.

[21] Her application seems to have grounded on s. 442(1)(e) reading as follows:

442-(1) An application to the council for the cancellation, reduction or refund of taxes levied in the year in respect of which the application is made may be made by any person,

(e) who is unable to pay taxes because of sickness or extreme poverty.

It seems that the municipality turned down her application although the record is not too clear on this issue.

[22] In my view, Judge Bell was plainly wrong in applying the equitable doctrine of unjust enrichment to the facts of this case in an effort to grant relief to Ms. Alcorn for the eight or nine year period from 1989 to 1997 when she was being assessed on her 67.17 acre parcel of lands, including the submerged portion.

[23] Any rights she had to correct her assessment were exclusively set out in s. 40 and related sections of the Assessment Act and the courts have no power outside the framework of the Act to grant any sort of remedy to her or anyone else similarly situated.

[24] The doctrine or principle of unjust enrichment has been developed in contexts largely untrammelled by legislative controls. So far as I am aware, no court which has applied the principle has ever suggested it could be used to oust or override a plain statutory regime such as, for example, the federal Income Tax Act or, as here, the Assessment Act.

[25] In the now-famous case of Pettkus v.Becker, 1980 22 (SCC), [1980] 2 S.C.R. 834 at 847, Dickson J. defined the principle in this way:

How then does one approach the question of unjust enrichment in matrimonial causes? In Rathwell I ventured to suggest there are three requirements to be satisfied before an unjust enrichment can be said to exist: an enrichment, a corresponding deprivation and absence of any juristic reason for the enrichment. This approach, it seems to me, is supported by general principles of equity that have been fashioned by the Courts for centuries, though, admittedly, not in the context of matrimonial property controversies. [Emphasis added.]

[26] As it seems to me, it is abundantly clear that this principle, which is tantamount to an equitable cause of action, cannot derogate from a clear-cut statutory code like that contained in the Assessment Act. The appellant had the opportunity over an eight-year period to exercise remedial rights which were open to her under the Act and failed to do so. That opportunity provides a "juristic reason" why the principle cannot be satisfied - even assuming that the principle could be said to apply in the circumstances of this case.

[27] In the result, the appeal must be allowed and the action is dismissed.

[28] The appellant will be entitled to its costs, if demanded. I would respectfully express the view that this might be a case where costs should be forgone.

DATED this 3rd day of October, 2002

"Justice Gordon Killeen"

Justice Gordon Killeen