COURT FILE NO.: DV.529-02

DATE: 20050207

ONTARIO

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE

(CUNNINGHAM, A.C.J., PARDU J., and HENNESSY J.)

IN THE MATTER OF Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended;

AND IN THE MATTER OF a complaint by Wabi Iron & Steel Corporation in relation to an assessment returned for the 2000 taxation year regarding property municipally known as 330 Broadwood Avenue, in the Town of New Liskeard which property is reflected on assessment roll number 54 18 000 007 024 00 0000

B E T W E E N:

WABI IRON & STEEL CORPORATION

Jackie E. McGaughey-Ward, for the Appellant

Appellant

• and -

MUNICIPAL PROPERTY ASSESSMENT CORPORATION, REGION NO. 29 and THE CORPORATION OF THE TOWN OF NEW LISKEARD

Christian G. Schulze, Q.C. for the Respondent M.P.A.C.

Respondents

HEARD: December 14, 2004

HENNESSY J.

1This is an appeal by Wabi Iron & Steel Corporation from a decision of the Assessment Review Board dated February 18, 2002, with respect to an assessment returned for the 2000 taxation year regarding property municipally known as 330 Broadwood Avenue in the Town of New Liskeard, estopping the Appellant from raising the June 30, 1996, current value as an issue in the proceedings on the basis that such issue was res judicata.

2An Appeal lies to this Court with leave on a question of law (s. 43 Assessment Act R.S.O. 1990, c. A. 31 as amended).

3Leave to appeal was granted by Trainor J. on August 15, 2002.

4Both parties agree that the standard of review is correctness.

Issue

5The issue in this appeal is whether the Assessment Review Board erred by finding that it was bound by the principle of res judicata as enunciated in Rasanen v Rosemount Instruments Ltd. (1994), 1994 608 (ON CA), 17 O.R. (3d) 267 (Ont .C.A.).

The Facts

6The Assessment Act ( s. 19.2(1) ) states that the value of a particular property to be shown on the assessment roll returned for taxation in the years 1998, 1999 and 2000 shall be the deemed to be value of the property as of June 30, 1996.

7Section 40(1) of the Act allows any person to complain to the Assessment Review Board that the assessed value of the land is incorrect. The Board is required to hear evidence and submissions before making a determination of the amount of the value. This section also sets out the notice requirements for hearing and the requirement for the parties to explain their positions.

8The Appellant filed complaints with respect to its assessment for the taxation years 1998 and 1999. The property had been assessed as of June 30, 1996, at $1,664,000. The issue raised by the complainant was the correctness of the assessment.

9The Assessment Review Board, (the Board) heard the complaints on their merits October 8, 1999, and issued a decision on April 20, 2000, confirming the assessment. In the decision, the Board specifically determined that the June 30, 1996, value of $1,644,000 was correct. The Board refused a request to review its decision and the decision was not appealed.

10The Appellant then filed a complaint regarding its assessment of the property for the 2000 taxation year. In the course of this matter, the Appellant again sought to challenge the June 30, 1996, assessed value of $1,644,000 although it acknowledged that no change had occurred in the property.

11The Respondent, M.P.A.C. brought a motion before the Board for an order that Wabi not be permitted to raise the June 30, 1996 value as an issue in the proceeding regarding the assessment for the 2000 taxation year on the basis of issue estoppel and abuse of process. On February 18, 2002, the Board granted the motion and ruled that the Appellant could not relitigate the issue of the correctness of the June 30, 1996 value of the property. The Board found that the question was res judicata and declared that the three requirements of issue estoppel were met. The Board further declared that the Appellant was estopped from raising the same issue on the complaint regarding the 2000 taxation year. This is the decision that is under appeal.

The Law

12In Rasanen, the Court of Appeal clearly stated that issue estoppel applies to proceedings before administrative tribunals.

“As long as the hearing process in the tribunal provides parties with an opportunity to know and meet the case against them, and so long as the decision is within the tribunal’s jurisdiction, then regardless of how closely the process mirrors a trial or its procedural antecedents, I can see no principled basis for exempting issues adjudicated by tribunals from the operation of issue estoppel in a subsequent action….On the contrary, the policy objective underlying issue estoppel, such as avoiding duplicative litigation, inconsistent results, undue costs, and inconclusive proceedings, are enhanced in appropriate circumstances by acknowledging as binding the integrity of tribunal decisions.

Rasanen, supra, at p. 280.

13The Court of Appeal went on to set out the three requirements, which must be met for the application of the doctrine of issue estoppel:

1. The same issue was decided by a competent tribunal in previous proceedings

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

3. The parties to the prior decision were the same parties.

Discussion

14In its decision of Feb 18, 2002, the Board decided it was bound by the decision in Rasanen with respect to the application of issue estoppel to administrative proceedings and to assessment cases. The Board then found that the matter before them met the three criteria required for the application of the doctrine of issue estoppel: the same question, ie the value as of June 30, 1996, for the same property, had been previously decided, the decision was final and the parties to the decision were the same parties as those to the current proceeding.

15The Appellant does not challenge these findings with respect to the three criteria. The Appellant takes the position that the Board was correct when it previously determined that it was not bound by previous findings made by other panels of the Board on the evidence of current value. In Gregory v Ontario Property Assessment Corp., Region No 28, [2001] O.A.R.B.D. No 645, at p. 4, the Board held that “Each panel must hear and consider the evidence presented to it and make its own determination.” It specifically rejected the notion that it would be bound by a previous finding on the value of the subject property.

16The Board issued the Gregory decision in 2001 without reference to Rasanen. In Gregory, the Board relied on cases that had been decided prior to Rasanen and which dealt with action estoppel as opposed to issue estoppel.

17It is important to note here that M.P.A.C. concedes that a new liability arises each year and that taxpayers have corresponding litigation rights every year. M.P.A.C. limits it’s objection to the raising of the issue of June 30, 1996 value.

Conclusion

18The application of issue estoppel in this case does not negate the right of the taxpayer to litigate the assessment. The right to complain of assessments in each year is provided for by the Assessment Act. The Board is required to hold a hearing when a complaint is filed. There is continuing right to challenge the current value on the basis of evidence of a change in the property.

19The Court in Rasanen articulated cogent policy reasons for the application of the doctrine of issue estoppel by administrative tribunals. The policy objectives which provide the rationale for the application of issue estoppel, avoiding duplicative litigation, inconsistent results, undue costs, and inconclusive proceedings are important to all participants in tax assessment litigation. Litigants benefit from a system which is efficient and which produces predictable and final results.

20The Board carefully considered each of the three criteria and it was reasonable to find that they were met. Consequently the Board reasonably determined that the question of June 30, 1996 value was res judicata and that the appellant should be estopped from raising it on the present complaint.

21There is no principled basis to exclude assessment proceedings from the doctrine of issue estoppel where the decision is within the jurisdiction of the tribunal and there has previously been a full and fair hearing on the merits. The appellant in this case does not challenge the jurisdiction or the fairness of the earlier hearings.

22The Board has the discretionary power to issue such orders as it considers appropriate in the proceedings as will prevent the abuse of its processes. The standard in any review of the exercise of a discretionary power by a tribunal is reasonableness.

23I find that all of the elements necessary for the application of the principle of issue estoppel exist regarding the issue of the June 30, 1996 value. The Board’s order was a reasonable exercise of its discretion. The Board did not err in applying the principle of res judicata to the issue of June 30, 1996 value. The appeal is denied.

HENNESSY J.

CUNNINGHAM A.C.J.

PARDU J.

Released : February 7, 2005

COURT FILE NO.: DV.529-02

DATE: 20050207

ONTARIO

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE

(CUNNINGHAM, A.C.J., PARDU J., and HENNESSY J.)